Energy storage will help nanogrids catch the eye of utilities and business leaders alike
December 2, 2015
With microgrids gaining popularity for deployment in front of and behind the meter, it's was only a matter of time before the unique strategy received a spin-off technology of its own. Enter the nanogrids, distributed energy resources with capacity around or below 100 MW. Despite bringing less capacity to the table, nanogrids are capable of delivering much of the same functionality as their larger cousins. By serving as an independent source of power or a supplement to a larger electrical system, nanogrids can provide resiliency to commercial facilities during outages, offer demand response capabilities and help companies to reduce energy costs.
The main differentiator between micro- and nanogrids is the size of the area they are expected to serve. While microgrids have been introduced as a means of helping businesses with campuses featuring multiple buildings to become more energy dependent, nanogrids are suitable for a single commercial building owned by an organization interested in reaping the same rewards. When combined with solar or another form of on-site generation, nanogrids can even help commercial buildings to become completely self-sustaining with regards to electricity. That's why it makes sense for facility managers to brush up on the finer nuances of the impending nanogrid explosion.
"Nanogrids offer improved flexibility over the power grid's traditional limitations."
Demand for nanogrids behind-the-meter is on the rise
Nanogrids will be most useful in developing countries where grid services are week. However, businesses globally have already caught on to the usefulness of nanogrids for supplementing solar generation. According to data collected by Navigant Research, the market for solar PV systems combined with energy storage nanogrids is expected to blow up from a $1.2 billion industry in 2015 to a $23 billion industry by 2024. According to the report, one of the reasons that nanogrids have caught on is because the technology offers improved flexibility over the power grid's traditional limitations:
"Nanogrids, small, modular distribution networks, are considered the antithesis of the bigger-is-better economies of scale thinking that has guided energy resource planning over much of the past century," said research analysts, whose data shed light on the advantages of "distributed solar PV installations in behind-the-meter building-level applications for residential and commercial customers."
Microgrid development points toward growing opportunities for nanogrids
Technology trends typically occur in waves. The experiences of first adopters act as the proving ground for new technology, and entire industries can quickly adopt solutions if these strategies come with a proven track record or obvious opportunities to reduce costs and maintenance. This has been the case for traditional microgrids. While the technology was initially looked over by some utilities and businesses managing large campuses, the modern demand for these solutions has put microgrids at the forefront of energy innovation.
For example, California utility San Diego Gas and Electric recently debuted a solar-plus-storage microgrid designed to serve the needs of 2,800 customers too remote for efficient connections to local energy infrastructure. One of the first microgrid set-ups to take advantage of solar and storage in the nation, the SDGE deployment is likely to become a model for utility microgrids in similar climates. Additionally, the continued success of independent, utility-run microgrids will eventually usher in greater acceptance of nanogrid technology.
Regulatory simplicity provides extra incentive for nanogrid deployment
Businesses fueling the demand for nanogrids aren't just interested in the technology as an offshoot of traditional microgrids. Nanogrids, especially those capable of turning a commercial facility into its own self-sufficient and renewable power station, have more to offer than performance scaled to suit the needs of a single building.
Utility Dive emphasized that because nanogrids are only assigned to a single building, they are far less likely to incur regulatory scrutiny or rouse the ire of local utilities than traditional microgrids. In addition to helping companies to avoid suits and fines, the reduced complications of integrating nanogrids into a facility's energy profile means that acquiring permissions and completing installation will take place over a far shorter time frame than that of a traditional microgrid. Navigant Research analyst Peter Asmus emphasized this point in an interview with Utility Dive:
"[Microgrids are] very complicated from a regulatory point of view," Asmus said. "The nanogrid can be done more immediately."
With nanogrids being treated as both an alternative to microgrids as well as a way to address their limitations, it won't be long before the two technologies are treated with equal regard.
