Let’s start with a defining statement for microgrid systems; they are self-sufficient energy systems that cater to energy needs for a small geographical area, they can have one or more kinds of energy sources such as solar panels, heat sources or wind turbines and even contain an energy storage solution, for example, batteries.
Their primary purpose is to produce sustainable power for an allocated area. These areas can be hospitals, campuses, business centres and small neighbourhoods. Microgrid systems are discussed in association with renewable energy, mainly because that is the type of energy being developed in recent years. They happen to do better than large scale grids that cater to larger populations from fossil fuel sources and are becoming increasingly accepted.
Microgrids work in an interconnected way, providing energy to buildings in the form of electricity, cooling and heating through software and digital control systems. Its major characteristics include:
- being local, which means it provides its services to nearby customers
- being independent, which means it can be disconnected from its central grid yet still function at 100%, this comes in handy in times of central outages and lastly
- being intelligent, which is a result of advanced software and management systems.
With the efficiency of microgrids, there is a pertinent need to measure their energy demand and supply, which is where Demand-Side Management comes in.
What is Demand-Side Management (DSM)?
Demand-Side Management can be explained as the “group of actions designed to efficiently manage a site’s energy consumption to cut costs incurred for the supply of electrical energy, from grid charges and general system charges, including taxes” according to Enel X. These actions are necessary for optimising energy use and saving costs on electricity charges by understanding the overall consumption costs, the amount of time this consumption occurs, and the supply and connection parameters.
Demand-Side Management is enshrined in the instability of grid systems around the world since renewable energy sources are highly penetrable including the decentralisation of their production, these cause innumerable disruptions on the microgrids and grid management services, a balance is therefore needed.
The demand and supply balance is a significant worry; the amount of energy created and fed into the grids has to match the consumption habits. Grid managers can now create energy management systems to offer grid services that are paid for, which in turn increase the costs for the electrical system.
In-depth on-site analysis has to be carried out on individual microgrid sites to properly engage in Demand-Side Management to ascertain the generation and consumption habits of customers.
All the measures used under Demand-Side Management are implemented on the generation side of the energy meter to modify consumption patterns and enable efficiency in using and managing energy loads. The measures don’t only involve energy efficiency but also something else called Demand Response (DR).
Demand Response is a technique that microgrid managers use to balance out sudden surges or plummets in consumers’ consumption of energy. DSM program participation, for now, can be voluntary or mandatory for consumers, for those that decide to volunteer, there are attractive incentives to encourage more participation. Some regulations have been introduced by most energy (electricity specifically) regulators that have encouraged the integration of Demand-Side Management at their facilities, an attempt at a level playing field for DSM.
What are the Advantages of DSM?
As referenced earlier, the major advantage of Demand-Side Management is saving and reducing unnecessary energy losses. These are the direct benefits. The indirect benefits include reducing the frequency of blackouts and the mitigation of emergencies that have to do with the energy systems.
To understand the advantages and disadvantages of DSM, it is imperative to compare it to other alternatives (Supply-Side Alternatives) such as energy generated via renewable energy, the power generated via fossil fuels, load shedding and peak power plants. It is imperative to note that Supply-Side Management deals with energy management on the other side of the meter regarding supply, the polar opposite of DSM.
|Energy via Renewable Sources||
|Energy via Fossil fuels||
|Peak Power Plants||
Advantages and disadvantages of DSM, in comparison to other alternatives. Source: Science direct
Here is a comparison of DSM’s advantages from the consumers’ perspective (customers and society) and power utilities. Source: Science Direct
|Reduced cost of operations||Energy bills are reduced due to energy-efficient equipment.||Greenhouse gasses reduction because fossil fuel power plant constructions aren’t needed|
|Reduced expenses on building power plants, costs of transmission and distribution||Power cuts are reduced, and the power supply is more reliable and stable.||Power distribution is equitable due to less disruption of power|
|Operations run efficiently||Customer satisfaction and reduced maintenance costs for energy-efficient appliances||The promotion and development of sustainable energy and efficiency in the conversion of renewable energy sources|
Demand-Side Management with Microgrids allows grid managers to observe how both systems perform in the transformation of conventional microgrids to those that run on renewable energy and how the Management of demand-side can help with the instability of renewable energy sources; how they can work with renewable energy storage systems and how they can be improved on for efficient utilisation and consumption by customers. Our Community Manager module is integrated with blockchain technology that can enable you to utilise DMS effectively and efficiently.
Take a careful look at the snapshot below; it is a typical representation of the settlement pattern in most developing countries. According to the source of this image, the darker shades represent a population density of over 1000 people per square km, down to less than ten people per square km as we move to the lighter shades.
In most instances, the utility systems in these regions were designed to cater to the significantly populated areas. While the remote villages, rural areas are left without electricity facilities.
As these countries develop, there’s now been the need to bridge the gap and provide energy facilities to those less privileged regions. Hence, one of the significant reasons why developing countries adopt microgrid solutions to solve the problem of rural electrification.
Through this article, we’ll take a wholesome look at the major reasons for the rise of microgrids in developing countries. We’d also examine some notable successes of microgrid program in these countries. Let’s dive in.
Why Are Microgrids Gaining Prevalence In Developing Countries?
We started to explain at the introduction: one of the most underlying factors leading to the need for microgrids in most developing countries – population settlement pattern. The rural centres and villages are far from the central grid. If there’ll be an endeavour to extend the network to the remote locations, it’s going to capital intensive and time-consuming.
Microgrids are cost-effective. Instead of investing a massive amount of money on buying transmission and distribution equipment to expand the grid to the remote locations, investing in microgrids will provide electricity to these places at lower costs.
Therefore, developing countries have taken a more economical step in adopting microgrids to provide electricity to their remote centres.
Most microgrid solutions are renewable energy-based: This is another factor that makes the microgrid solution appealing to the developing countries. In a bid to comply with the Paris Agreement and other sustainable climate pacts, microgrid programs are primary channels through which these countries promote clean energy policies.
Some of them provide incentives and remove taxes and dues on renewable energy equipment as a way to keep up to their climate change policies.
Microgrids provide reliable electricity: a common characteristic of the central grid in developing countries is unstable supply. This is due to several factors like shortage of fuel source (for non-renewable), inefficient grid system, over-demand of energy, and even political factors.
These untackled challenges in the developing countries give room for industries, private companies, and communities to create their microgrid solutions, both renewable and non-renewable.
All these factors and many more have favoured the widespread of microgrids among the developing nations. Statistics by the International Energy Agency predicts that there’ll be a tremendous increase in the development of microgrids; by 2040, about 80 million people will have access to electricity through microgrids.
Talking about microgrid projects, according to a report given by Navigant Research, by the second quarter of 2019, there were already 4,475 microgrid projects all over the world. These microgrids sum up to a whopping 27GW of total installed capacity. How much have the developing countries participated in the boom?
Case Studies: Three Notable Microgrid Programs Among Developing Countries
Though Northern America and Asia-pacific regions account for the higher share of the world’s microgrid capacity. The sub-Saharan Africa regions and Southeast Asia are developing their microgrid capacity at an impressive pace. Here are some notable ones that we’d love to appraise.
Indonesia is a country with 34 provinces dispersed over 70,000 islands, with half the population living in the rural regions. Before now, only 66 per cent of Indonesia used to have access to electricity; now, over 88 per cent of Indonesia is electrified. Thanks to programs like Bright Indonesia and other electrifying initiatives, more houses in the remote areas of Indonesia enjoy a stable electricity supply.
The goal of Bright Indonesia is to provide 1GW of electricity to over 12,000 villages where electrification is needed the most by 2019.
With an emphasis on the sub-Saharan region of Africa, Beyond the Grid is an initiative of the United States Government to make 30,000 MW of new and clean electricity available to over 60 million African households in remote and rural regions by 2030. The program has 40 partners all over the world who have committed to invest over $1 billion in providing renewable microgrid solutions for sub-Sahara Africa.
According to the latest report, the program has birth 56 power projects, which are already generating 3,481MW of power connected to 14.8 million homes and businesses across sub-Saharan Africa.
Launched in 2015 by Rockefeller Foundation, the program aimed to provide renewable microgrid solutions to at least 25 million Indians spread across six states. The foundation invested $20 million to achieve this electrification goal in five years.
In the latest report, Smart Power India had over 160 microgrid solutions spread in four Indian states – Bihar, Uttar Pradesh, Odisha, and Rajasthan. The microgrids were over 80 per cent solar-powered, and their power capacity ranged from 10kW to 70kW. More than 70,000 people in remote areas of India now have access to sustainable electricity.
For millions of lives, the microgrid is more than just a cliche. It is the hope of a household of five, who live in mountainous terrains, where power lines do not reach, to have access to reliable electricity. Yet, there are still hurdles to cross through this mission of making electricity accessible to these regions.
Prospects, Challenges, and Recommendations.
According to a United Nations publication, factors like tariff design, tariff collection mechanisms, maintenance and contractor performance, theft management, demand growth, load limits, and local training and institutionalization still need to be addressed.
A couple of solution providers are already tackling some of these challenges. For instance, we see the PAYGO scheme used in Kenya that allows energy users to make their payment using mobile money solutions. In the light of today’s technology advancement, there are simpler and more efficient systems that we can adapt to cater for these challenges.
As an expert in smart grid solutions, we firmly believe that these local energy communities can be improved by optimizing the microgrids using machine learning and blockchain technologies. The blockchain technology guarantees fair and efficient governance, while smart algorithms provide techno-economic optimization for their participants by lowering their bills and valorizing their assets.
Read our elaborate white paper on Hive Manager – an efficient microgrid management solution.