Home Creating Resilient Power Grids With Distributed Energy Systems

What happened in February in Texas, US?

The US state of Texas has experienced some of its coldest weather on record where the state capital Houston recorded a temperature of -10.6℃, which is nearly 20℃ below average. And another city Dallas-Fort Worth recorded the lowest-ever temperature of -18.9℃. This ‘deep freeze’ was caused by the weakening polar vortex — a swirling mass of cold air over a large low-pressure area around the Poles. This winter storm, named ‘Uri’, has killed at least 21 people, left millions without power. This has exposed the vulnerabilities of the Texan power system and infrastructure that was not designed to deal with such extremely low temperatures.

Q

Why did this happen?

Accustomed to mild winters and hot summers, Texas’ oil and natural gas energy infrastructure was not designed with the proper pipe and valve insulation for extremely cold temperatures, which have caused power generators to fail. At the same time, electricity demand reached a new record winter peak of 69 GW, when only 57.7 GW was forecast. Demand for natural gas increased when the power stopped. But there were shortages across the system as oil and gas wells, pipelines and valves froze over. Over 46 GW of power was lost as large power plants tripped off-line.

Q

Energy Security during climate disasters: Distributed Approach

The storm laid bare the deficiencies of a top-down grid reliant on centralized generation and transmission infrastructure vulnerable to disruption across thousands of miles of poles and wires, slow to adapt, and built according to old assumptions. To improve system resilience for extreme conditions – and prepare for future dynamic energy needs – what is needed is smaller, more agile, and more localized systems. Deploying distributed energy resources (DERs), like on-site energy storage and solar is a safe-bet, cost-effective strategy for creating resilience for critical utility infrastructure as well as homeowners, businesses, and communities. DERs provide a plethora of capabilities that benefit the wider grid, increasing flexibility to adapt to immediate conditions and emerging system demands.

Distributed energy assets not only ensure energy available on-demand (including when and where) but also skip the weakest link in our energy network – miles of poles and wires. Distributed assets like microgrids, rooftop PV, and on-site batteries, decouple the risk of one point of grid failure, much less topple the entire system, since the energy generation, storage, consumption, and control management are done at one spot.

Further DERs increase system flexibility and efficiency but also give grid operators new tools to better manage consumer demands changing constantly. DERs can independently manage these like data centers, high-tech manufacturing, electric vehicles, bi-directional power flows, and others which put new strains on a centralized system not designed to handle constantly fluctuating energy-intense demands.

Distributed Energy Solutions

Two weeks after Uri, a software company called Uplight Inc. became a unicorn with a new round of funding valuing the firm at $1.5 billion. It is backed by France’s Schneider Electric SE and U.S. power company AES Corp. It works with more than 80 energy providers and is developing software that “connects the dots” between electric vehicles, renewables, batteries, and other IoT devices. It promises to make the U.S. energy system more resilient.

Investor interest in DERs has been gradually accelerating in start-ups offering grid management platforms where intermittent renewables, distributed solar and storage occupy larger portions of the generation mix. During late 2020 and early 2021, investors committed more than $1 billion for software-controlled clusters of DER, electric vehicles, and others.

In March, a special purpose acquisition company called Beard Energy Transition Acquisition Corp. said it plans to raise $250 million in an initial public offering to fund the purchase of a company focused on renewables integration and energy infrastructure.

A Texas-based Microgrid firm, Enchanted Rock, has approximately 200 microgrids across the state. It reported that 130 of their microgrids supplied energy to the grid during the Texas outages. Commercial stores providing essential food and medical supplies were some of its customers. More microgrids will also help community resilience. When powered by microgrids, critical facilities (hospitals, aged care facilities, pharmacies) take demand off the grid. Not only did microgrids keep the lights on, but they’re also affordable, even when wholesale power prices during Uri surged to over $9,000/MWh.

SimpliPhi Power donated a pallet of PHI batteries to provide critical backup power to aid relief efforts in Texas. A mobile solar-plus-storage system was created that helped first responders and communities in hard-hit parts of Texas as recovery efforts moved on. These assets powered communications equipment, remote charging, and refrigeration for first responders, partner relief organizations, and community mutual aid groups throughout the state.

UK-based Intelligent Power Generation (IPG) developed a ‘Flameless Ceramic Turbine’, a 100kW modular generator to accelerate the decarbonization of fuel-based power. Through its flameless combustion technology and high-temperature ceramic, the turbine delivers pollutant-free power from any renewable fuel, with a levelised cost of energy comparable to a diesel generator.

Way Forward

While providing cost-effective alternatives to grid failure, distributed energy systems can help system costs from soaring. And ultimately, they can ensure enough peak generation along with flexibility – microgrids can connect and disconnect from the grid. Microgrids are growing 15% annually, reaching an $18 billion market in the U.S. by 2022. Community-scale microgrids connect critical infrastructure facilities with nearby residential and commercial loads. They provide uninterrupted power when the grid goes down and reduce grid constraints and energy costs.

Challenges, however, come in the way owing to the intermittency of these renewable sources. Nevertheless, to address this, alternative energy storage technologies like biofuels, e-fuels, and hydrogen-based fuels like ammonia can play a role. These alternative fuels can balance those weekly or seasonal variations more cost-effectively than batteries, and are therefore equally valuable in achieving a sustainable, secure, and affordable energy system for all.

75% of electricity in Texas is generated from fossil fuels and uranium, and about 80% of the power outages were caused by these systems. More emphasis needs to be placed on “demand-side management” and DERs as the price of energy storage is expected to drop to $75/kWh by 2030. By pooling and aggregating small-scale clean energy generation sources and customer-sited storage, 2021 can be the year that “virtual power plants” realize their full potential. These customer-sited resources and microgrids serve as a glimpse into a more resilient grid where individual buildings and communities are increasingly self-reliant when the utilities fail.

Conclusion

Two key points can be discussed in the conclusion. One, a hub-and-spoke system that relies on a limited pool of large, centralized power plants that deliver energy through a network of poles and wires means homes and businesses are inherently vulnerable to outages. This includes utility-scale renewables where large solar and wind farms are connected to the power grid. Two, probably one of the most important lessons for grid operators to take away from the Texas blackouts is that planning based on historical events and demand isn’t sufficient against changing weather patterns.

A resilient solution would be a distributed and customer-sited energy in the form of batteries and on-site generation – for homes, businesses, hospitals, schools, community hubs, etc., – like storing food and water for the next emergency, energy can be generated and stored on-site, empowering people to become energy secure during the next grid failure.

 

Need a thought partner?

Share your focus area or question to engage with our Analysts through the Business Objectives service.

Submit My Business Objective

Our Clients

Our long-standing clients include some of the worlds leading brands and forward-thinking corporations.

New Feature

Login with your mobile number. Update now.