#distributedenergyresources

Microgrids and distributed energy resources can help facilities think differently about energy generation, storage, resilience, and grid interaction. These systems may include solar, batteries, generators, controls, and other technologies depending on the site.

As the country moves away from centralized power plants towards more localized and decentralized energy production, Distributed Energy Resources (DERs) are playing a crucial role in reshaping the US energy grid. This shift is not just about generating electricity closer to where it is consumed but also about creating a more resilient, flexible, and sustainable energy system. According to the US Department of Energy (DOE), more than 25% of new energy generation capacity added to the grid in the last few years has come from DERs. In simple terms, these resources refer to small-scale units of local generation connected to the grid at the distribution level. The Environmental Protection Agency (EPA) reports that the widespread adoption of DERs could reduce US carbon emissions by up to 40% by 2050. Additionally, DERs promote biodiversity by reducing the need for large-scale energy infrastructure projects that can disrupt ecosystems. Hence, DERs are increasingly gaining traction as they provide a sustainable and cost-effective alternative to traditional energy sources.

Key Types of DERs Making Strides in the US

Solar Panels: Solar energy stands as the leading type of Distributed Energy Resource (DER) in the US, with more than 2 million installations nationwide, as reported by the Solar Energy Industries Association (SEIA). Solar photovoltaic (PV) systems are extensively deployed across residential, commercial, and utility-scale sectors.

Wind Turbines: Traditionally linked to large wind farms, small-scale wind turbines are increasingly being adopted in rural and suburban regions. According to the American Wind Energy Association (AWEA), these smaller turbines contributed over 100 MW of power to the US grid as of 2020.

Energy Storage Systems: Essential for maintaining grid stability and balancing energy supply and demand, energy storage systems are witnessing rapid growth. The US Energy Information Administration (EIA) highlights that 1,400 MW of new storage capacity was added in 2021 alone, marking a significant expansion in this sector.

Microgrids: Microgrids are self-contained energy systems capable of operating independently from the main grid. They are crucial for boosting grid resilience, especially in disaster-prone areas. The National Renewable Energy Laboratory (NREL) reports that there are currently over 460 microgrids in operation across the US, contributing to a more reliable and secure energy network.

How is energy stored in the DERs?

The EIA notes that energy storage can reduce outages by up to 30% in areas with high renewable energy penetration. The most common form of energy storage is batteries used in residential and commercial DER systems. Lithium-ion batteries, in particular, have dominated the market due to their high energy density and declining costs. According to the DOE, the cost of lithium-ion batteries has fallen by 89% since 2010.

Advanced battery technologies such as solid-state and flow batteries are also being explored as they promise higher efficiency, longer lifespan, and improved safety over conventional lithium-ion batteries. For example, the Pacific Northwest National Laboratory (PNNL) is pioneering research in flow batteries, which could revolutionize large-scale energy storage with their ability to store large amounts of energy for extended periods.

Similarly, pumped hydro is a traditional form of energy storage that uses gravitational potential energy to store electricity. It accounts for about 95% of the world's storage capacity, according to the International Hydropower Association (IHA). Added to that is the hydrogen storage technology involves utilizing surplus renewable energy to produce hydrogen through electrolysis. The hydrogen produced can be stored and later used as a clean energy source. The National Renewable Energy Laboratory (NREL) is currently investigating the potential of hydrogen storage for long-duration energy storage solutions and its capacity to aid in decarbonizing sectors such as transportation and industry.

Small-Scale Energy Generation Systems in the US

Residential and Commercial Solar PV Systems

These systems are leading the DER revolution with attractive federal and state incentives and skyrocketing solar energy adoption. The Federal Investment Tax Credit (ITC) offers a 30% tax credit for solar systems on residential and commercial properties, significantly reducing the upfront cost for consumers. States like California and Texas have been at the forefront of solar integration. For instance, California's aggressive solar policies, such as the Net Energy Metering (NEM) program, have made it a leader in solar energy, accounting for nearly 40% of the country's total solar capacity.

Localized Wind Energy Production

Small-scale wind energy production is gaining traction in rural and suburban America. These turbines can be particularly beneficial for farms and rural businesses, providing a clean and cost-effective energy source. The US Department of Agriculture (USDA) has supported small-scale wind projects through grants and loans, recognizing their environmental and economic benefits. In Vermont, for example, small wind turbines provide power for farms, reducing energy costs and carbon footprints while contributing to local energy resilience.

Innovative Technologies in Small-Scale Generation

Beyond solar and wind, innovative technologies like micro-hydro systems and biomass generators are emerging as viable DER options. Micro-hydro systems, which use flowing water to generate electricity, are particularly suitable for rural areas with access to rivers and streams. Biomass generators, which convert organic materials into electricity, offer a sustainable option for waste management while producing energy. Successful case studies include Alaska's remote communities utilizing micro-hydro systems and Michigan farms adopting biomass generators for both energy production and waste reduction.

Expansion of US Microgrids and Local Energy Networks

Microgrids are self-sufficient energy systems that serve a specific geographic footprint, such as a college campus, hospital complex, or neighborhood. They can operate independently or in conjunction with the main grid, providing enhanced reliability and energy security. Examples of successful microgrids in the US include the Bronzeville Microgrid in Chicago, which integrates solar power, energy storage, and advanced grid management technologies to serve over 1,000 customers.

The US Department of Energy has launched several initiatives to promote microgrid development, including the Grid Modernization Initiative, which aims to enhance grid reliability and resilience through advanced microgrid technologies. Thus, the potential for widespread adoption of microgrids in the US is vast, particularly in regions vulnerable to natural disasters or with aging infrastructure.

Case Study: Stone Edge Farm Microgrid – A Model for Sustainable and Resilient Energy Systems

This microgrid project in California is established as a response to the frequent power outages and the growing need for sustainable energy solutions. Stone Edge Farm has created a fully operational microgrid that integrates a variety of Distributed Energy Resources (DERs), including solar panels, wind turbines, hydrogen fuel cells, and advanced battery storage systems. The microgrid is designed to operate autonomously from the main grid during outages, enhancing energy resilience and reliability for the farm and its surrounding community.

What makes this microgrid particularly innovative is its use of cutting-edge technology for real-time energy management, incorporating artificial intelligence (AI) and machine learning algorithms to optimize energy production, storage, and consumption. The project also explores the potential of hydrogen as a storage medium, using surplus solar energy to produce hydrogen fuel, which can be stored and used later to generate electricity, providing a sustainable, zero-emission solution. It serves as a model for future microgrid implementations across the US, demonstrating how a combination of renewable energy sources and advanced technology can create a resilient, self-sustaining energy system that not only meets local energy needs but also contributes to broader climate and energy goals.

What does the Future of DERs Look like?

The global microgrid market size is expected to reach USD 224.34 billion by 2030, registering a CAGR of 17.1% from 2024 to 2030, according to a new report by Grand View Research, Inc. The improvement in manufacturing sectors of emerging markets including Mexico, China, and India as a result of favorable government policies to attract investments is expected to promote market growth.

Microgrid Market Report Highlights

The Combined Heat & Power (CHP) power source segment dominated the global market and accounted for more than 37.0% of the overall revenue share in 2023. Shifting preference from conventional Separ  ate Heat & Power (SHP) system to energy generation from single fuel is expected to have a substantial impact on the segment growth.

The grid-connected product segment dominated the global market and accounted for more than 65.0% of the overall revenue share in 2023. The rising popularity of smart micro-grid-connected PV systems to provide electricity to consumers by reducing transmission losses is expected to have a substantial impact.

North America led the global market and accounted for more than 35.0% of the overall revenue share in 2023. The high adoption rate of captive power generation methods in the industrial and municipal sectors of the U.S. for reducing reliance on the government-controlled power supply is expected to have a substantial impact.

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Microgrid differs from conventional electrical distribution systems as it acts as a close proximity medium between the power generation and power consumption sources which results in increasing efficiency and reducing transmission losses. These systems perform dynamic control over energy sources by enabling autonomous as well as automatic self-healing operations.