Keeping the lights on during a power outage is usually the selling point of a microgrid. But a new report by Rocky Mountain Institute (RMI) breaks down the 13 value streams that battery storage can provide, and at least ten of them can be delivered by microgrids. It’s a reminder that grid-tied microgrids have much more to offer than resiliency, especially microgrids with battery banks.
These services offer real value, can be stacked, and could flip the economics in favor of microgrids. Below are the potential revenue streams that microgrids can feasibly be compensated for. The services are categorized by which stakeholder receives the most benefit.
ISO / RTO Services[wpsm_numhead num=”1″ style=”3″ heading=”2″]Energy Arbitrage – Buy Low, Sell High[/wpsm_numhead]The wholesale cost of energy is increasingly volatile. Microgrid battery systems can exploit this by loading up on cheap cheap energy at night when only the least expensive baseline generators are operating. During peak periods, around 3-7pm, grid operators pay power generators a large premium to meet increased demand. Barrier: Microgrid needs to be able to participate in wholesale markets. [wpsm_column size=”FULL” position=”last”][wpsm_cons title=”BARRIERS:”]
- Microgrids don’t always have access to wholesale markets.
[wpsm_numhead num=”3″ style=”3″ heading=”2″]Spin/Non-Spin Reserves – Plan for the unexpected[/wpsm_numhead]
[wpsm_column size=”FULL” position=”last”][wpsm_cons title=”BARRIERS:”]
- Participating here could limit the microgrids ability to perform its primary function of maintaining power during a grid failure. Non-spinning reserves may be needed when the microgrid needs to ‘island.’
[wpsm_numhead num=”4″ style=”3″ heading=”2″]Black Start – It takes electricity to make electricity[/wpsm_numhead]
Microgrids can be valuable for helping the bulk grid restore power after a power outage. After shutting down, most large generators need outside electricity to restore their operations. Microgrids can use excess capacity, or temporarily dedicate everything for that purpose.
[wpsm_numhead num=”5″ style=”3″ heading=”2″]Resource Adequacy[/wpsm_numhead]
[wpsm_numhead num=”6″ style=”3″ heading=”2″]Distribution Deferral[/wpsm_numhead]
[wpsm_numhead num=”7″ style=”3″ heading=”2″]Transmission Congestion Relief[/wpsm_numhead]
[wpsm_numhead num=”8″ style=”3″ heading=”2″]Transmission Deferral[/wpsm_numhead]
[wpsm_numhead num=”9″ style=”3″ heading=”2″]Increased PV Self-Consumption[/wpsm_numhead]
[wpsm_numhead num=”10″ style=”3″ heading=”2″]Backup Power[/wpsm_numhead]
Of course, if the primary purpose of a microgrid is to provide uninterruptible power during power blackouts, that may limit the extent they are able to participate in other value streams. For instance, microgrids probably do not want to sell themselves as spinning/non-spinning reserves because that would require them to dedicate a large portion of their capacity if the grid needs it.
Still, many of the value streams do not drain the capacity of the microgrid, and offer potential for microgrids to stack value and significantly impact the economics of a microgrid.
There are many regulatory barriers that could prevent microgrids from providing their potential value. The biggest impediment is that batteries are often not given an equal playing field with large central generators. Additionally, if an asset provides value to multiple stakeholders, regulation currently makes it difficult or impossible for the utility to be compensated.
Regulations often make it difficult or impossible for a utility to collect revenue from a behind-the-meter energy storage asset. Microgrid value is determined on regulation allowing fair access to markets.
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