How can microgrids facilitate the energy transition?

21-12-2017 | The Netherlands and the world are facing one of the largest transformations in human history; the energy transition. What does it mean for wind and solar developers exactly? And how can microgrids facilitate the energy transition?

What does ‘the energy transition’ mean exactly? 
In November 2015, almost all countries in this world signed the Climate Agreement in Paris. With this Agreement, we agreed to accept a total warming of the climate of only 2 Celsius on this Earth, but with a maximum of 1,5 Celsius. In order to reach that, we need to secure 95% less CO2-emission compared to the reference year of 1992. The transition from grey ‘fossil’ energy to green energy is an important step to take with this large-scale energy transition process. The Dutch government set the goal for 16% renewable energy being produced in 2023. It is expected that the amount of renewable energy in 2017 will be around 7%. Within 6 years we will need to double our efforts to reach this ambitious goal. 

What do these goals exactly mean in reality? 
One of the tangible measures in the Dutch Governmental Agreement is the realized CO2-reduction of 1 Megaton (1 million ton) in 2030 with the implementation of large-scale solar fields (roof-tied or land-tied). When we translate this goal into the desired solar capacity (kWh or wp), then this would mean building 312 solar fields of 10 MWp (9 million kWh) the coming 13 years. That means building 24 large solar fields of 10 MWp every year the coming 13 years (unto 2030). To bring this into perspective, this is an equivalent of 625.000 households of 4.500 kWh each. Or 3.600 soccer stations full of solar panels.   

Are these goals feasible? 
These goals should be reachable in principle, under the condition that solar developers get their SDE+ assigned, governmental permits approved and financing ready. The large solar developers are busy with more than 100 MWp on solar capacity for the coming years (per large PV developer). That means that we can expect a flood of new and large solar fields the coming years. These solar developers have the financial means and labour capacity to be able to build these solar fields.  

Which challenges can we expect the coming years? 
We expect that the solar developers are going to face the following challenges the coming years:

  • Delivery delays are to be expected with the current grid connections. The current grid providers in the Netherlands (Enexis, Liander, Westland Infra and Delta) are facing grid capacity problems with the current grid infrastructure now and the foreseeable future. That means that solar developers who are submitting their grid connection to their local grid provider might not be fulfilled within the desired timeframe. In many cases the desired grid capacity will need to be upgraded, with involves additional grid capacity and investments. This could lead to (huge) delays with delivering the desired grid connection lines and capacities to solar and wind developers. 
  • Solar and wind developers might run the risk of delays in financing their projects with banks and investors. 
  • The financial and legal conditions of the solar business case might be difficult to address. Especially when solar and wind developers are going to deviate from the standard procedures, with so called ‘installations’ or ‘direct line connections’ that might be useful in case of microgrids. 

Which solutions does Zown have? 
In case of huge grid connection costs and/or long grid connection delivery delays, Zown offers an alternative. In that case, Zown could directly connect a solar or wind producer with one or more off-takers locally. Microgrids and Zown’s Micro Grid Platform can facilitate this process. Zown’s Micro Grid Platform is able to accommodate several energy streams real-time with each other on the same platform for different producers and off-takers simultaneously (multicommodity; meaning solar, wind, heat, gas, storage, etc.).  
 

Are microgrids only interesting for solar developers? 
No, in principle are microgrids interesting for a large user group (producers and off-takers). Especially for those who are having the wish to start working with renewable energy, i.e. water boards, mineral companies, municipalities, datacentres, farmers, etc. In this case they have several options to reach their climate goals:

  • Developing and maintaining their own solar, wind and heat capacity.
  • Buying renewable energy from a corporate energy company.
  • Buying it from a local green producer like a wind- or solar ‘farmer’. In the last case, a microgrid could be a solution to fulfil this dream. 

What are the advantages of a microgrid? 
In many cases producers and off-takers are able to lower their grid connection costs drastically with a microgrid compared to connecting it directly with the grid (most interesting above 5 MW capacity). Zown will then search for potential off-takers that are close enough for connecting it directly with a local producer (wind, heat, gas or solar). The general advantages of a microgrid are:

  • Lower total costs of the grid connection for both the producers and off-takers compared to a traditional grid connection. 
  • Better electricity tariff for both the producers and off-takers compared to buying from/delivering to your energy company. 
  • A secured delivery contract between producers and off-takers for renewable energy for a contract period of 5 to 25 years. 
  • Optimized and clever balancing of supply and demand within the scope of the microgrid and real-time monitoring.  
  • A direct grid connection between producers and off-takers will increase the acceptance of a wind park or solar field among citizens and companies in the neighborhood of this solar or wind park.

How does the business case for a micro grid look like? 
Every business case is tailor-made for each new customer. Zown’s services are getting interesting when you will need to connect a solar field or wind park with a needed grid capacity of 5 MW or beyond. In this case we are able to reduce the grid connection costs substantially, i.e. in many cases more than EUR 300.000, including no grid connectivity delays. In many cases micro grids are fulfilling local climate goals as well, as local municipalities and the national government are requiring solar and wind developers more and more for bringing their renewable energy not to the grid, but to local off-takers, such as companies, datacentres, farmers, etc.  

When is it interesting to hire Zown’s professionals? 
The sooner Zown is being attracted in the development stages, the better it is. The central government (RVO) requires wind and solar developers submitting a feasibility study (for large scale projects) before they submit their SDE+ subsidies. In many cases the solar and wind developers will need to request pricing proposals from the local grid providers (including grid connectivity delivery times). This is the ideal time for starting Zown’s feasibility study. 
In case that there has been assigned a SDE+ subsidy, Zown still can be approached for starting a feasibility study for a microgrid. However, in that case there might be less space and time to modify the already designed grid connectivity trajectory or available land/roof for bringing local production to local off-takers. 

For more information
Please contact our Business Developer
Bas Bouwman 
M +31 6 5538 6827
E bas.bouwman@zown.eu

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