Roadmap for microgrid development

Currently, an increasing number of microgrid pilot sites can be observed in many parts of the world. It is true, however, that up to now,cost, policy and technology barriers have largely restrained the wide deployment of microgrids in distribution networks owing to their limited commercial appeal or social recognition. However, these three barriers are currently undergoing considerable changes – they are very likely to turn into key enablers in the future, eventually leading to a widespread microgrid adoption worldwide.

Firstly, the cost factor might prove to be the most effective driving force for microgrids in the very near future. This might happen not only because of the reduction of microsource costs, but also because of the relative changes of external opportunity costs due to economic (fluctuating market prices), technical (aging of network infrastructure) and environmental (emission trading) factors.

When microsource penetration at a LV grid becomes significant, participants in the electricity retail business will consider the aggregated power from small generators as a new market opportunity. Unlike in the case of VPP, microgrid stakeholders will eventually recognize a unique feature of aggregated microsource units, namely locality: the microsource units can potentially sell directly to end consumers in an “over-the-grid” manner. In order to turn this potential into reality, however, the second factor – appropriate policy and regulatory environment – is needed to enable the operation of a local market within a microgrid.

Finally, the adoption of favorable selling prices in local retail markets will attract even more microsource units, allowing the microgrid to operate islanded, if beneficial. With the help of smart metering, control and communication technologies, the microgrid operator will eventually be able to coordinate a large consortium of intermittent and controllable microsource units, as well as central and distributed storage devices, to achieve multiple objectives and, at the same time, to cater for the interests of different stakeholders.

MICROGRIDS: Architectures and Control
Nikos Hatziargynou


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