June 02, 2020

4 min read

Implementing Eco Friendly microgrids
Implementing Eco Friendly microgrids

Renewables for energy independence

To reduce their reliance on fossil fuels and minimise their carbon footprint, an increasing number of companies are implementing low-carbon microgrids. Just like traditional microgrids, low-carbon ones can help firms meet their energy demands without depending solely on the national grid. Unlike traditional solutions, however, these eco-friendly microgrids are almost zero-emission.

A microgrid is a localised group of energy resources and loads that can operate both connected to the wide area grid and independently. The ability to work in island mode is what differentiates a microgrid from other forms of on-site energy generation. This also makes microgrids a popular option among manufacturers who wish to secure a steady supply of electricity without having to rely solely on their national grids.   

A microgrid is formed by a point of common coupling (PCC), a source of energy supply, and a charge/discharge storage system, for example, batteries. Traditional microgrids rely on fossil fuels as a source of energy supply. However, low-carbon microgrids use renewable sources, such as solar panels or wind turbines, to generate a significant part or even all of their energy supply. 

Improved reliability

There are three scenarios where microgrids have traditionally been implemented and where low-carbon solutions are now on the rise – off-grid areas, areas with unsatisfactory or intermittent grids, and areas with reliable grids but hight security needs. 

Off-grid areas are still common in some regions of Africa, some small islands, and sparsely populated territories such as central Australia. Despite the lower levels of industrialisations, these areas are important in sectors such as the extractive industry, as they are rich in mineral resources. In this scenario, low-carbon microgrids offer new opportunities to satisfy the sector’s energy needs while reducing the considerable environmental impact of mineral extraction. 

Areas with insufficient or intermittent grids are still prevalent in many developing regions, such as Latin America and the Indian subcontinent. Normally, manufacturers in these regions use diesel generators as a back-up power solution. However, the price of diesel is subject the fluctuations of the oil’s market, so low-carbon microgrids represent a cheaper as well as more sustainable option. 

In industrialised countries, low-carbon microgrids are implemented in areas where the electricity supply is steady and reliable, but where security is paramount, such as hospitals, airports, data centres and military bases.

More savings, less carbon

Recently, an increasing number of plants with reliable electricity supply have turned to low-carbon microgrids to cut energy bills and to reduce their environmental impact. 

The main benefit of implementing a solar or wind-based microgrid is economical, since the price of both renewable energies and modern storage solutions is dropping. According to a recent report by the World Business Council for Sustainable Development (WBCSD), the global cost of solar panels fell by more than 60 per cent between 2009 and 2015, while lithium-ion battery costs decreased by more than 50 per cent from 2013 to 2016. 

The cost of solar is expected to fall further, while diesel prices are unlikely to drop. Moreover, firms can sign a Power Purchase Agreement (PPA) with an external provider of renewable energy solutions, giving them access to a low energy price over a long- term period. By contrast, the cost of diesel will always depend on fluctuating oil prices. 

Low-carbon microgrids are also an efficient way of reducing a firm’s carbon footprint and therefore its environmental taxes. In areas with carbon pricing, such as the EU Emissions Trading System or the UK Carbon Price Floor, switching to a low-carbon microgrid can drastically cut a plant’s compliance costs. Moreover, reducing emissions can improve a firm’s Corporate Social Responsibility (CSR) rating and enhance its brand image. 

Low-carbon microgrids represent a smart solution to achieve energy independence, cut energy bills and reduce the impact of the manufacturing sector on fragile ecosystems.

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