The cell phone model for microgrids is a low-cost, limited-resources approach to energy delivery on a limited scale and targeting small localities. Original implementation of cell phone technology and subsequent expansion of coverage occurred very rapidly, at comparatively low cost, with limited infrastructure and without overburdening the existing telecom infrastructure. In fact, more people own cell phones in developing countries than own refrigerators. Just as cell phones are helping to lift the poor out of poverty, microgrids could help shoulder developing countries’ growing thirst for electricity without overburdening aging transmission lines or investing massive amounts of capital and time to construct traditional power plants to meet this demand.

The technological development that distinguished the early cell phones was the use of multiple cell sites and the ability to transfer calls from one site to the next without the need for costly landline infrastructure and maintenance. Similarly, a single microgrid or aggregate of localized microgrids may operate independently of a centralized grid by transferring between diverse power sources. This is especially important in developing countries such as Lebanon and India where the population endures episodes of prolonged power outages. Not only is the grid unreliable, but grid transmission can cost upwards of US$1million per mile, so extending the grid is too expensive. The cell phone model allows for staged implementation of energy provision.

Why is the Microgrid Important?

Grid-connected PV is a major global energy source with almost 40 GW installed, primarily in the last 10 years. SolarVision Co. provides guidance for PV clients in several developing countries, and our analysis shows that the rate of PV implementation by developing countries will accelerate dramatically as a result of decreasing costs of PV, rapidly growing populations, and expanding middle class. This surge in PV installations in developing countries derives demand for PV microgrids, which may be implemented at lower cost and with added flexibility and reliability. Furthermore, a microgrid’s capability to switch to off-grid mode power generation provides a bridge between common and often prolonged blackout gaps. SolarVision Co. estimates microgrid PV potential in developing countries alone will be greater than 5 GW in the next few years, especially as growth in current PV leader countries continues to slow. In our engagements with numerous clients, we are seeing an increase in interest for PV in microgrids which does not show up in typical market analysis as it is ‘off-the-books’ and financing is still in exploratory stages.

Key Issues: Affordability and Reliability

The affordability of PV is improving as module costs drop and the incentive increases with rising oil prices. Further price decreases will come, and as new modes of energy storage become viable, the PV-integrated microgrid becomes increasingly realizable by developing countries with resources that must be prioritized.

The key advantage of a microgrid is its use of dispersed generation sources and its inherent reliability--the ability during an electricity grid outage to isolate itself from the grid seamlessly with little or no disruption to the loads within the microgrid. Combining a variety of distributed resources enables a community to generate sufficient electricity in the event of a prolonged power outage in order to operate emergency services, such as a police station or hospital, and ensures that citizens have sufficient power to meet their essential needs. Likewise, when the electricity grid disruption ceases, the microgrid reconnects flawlessly to the grid without impacting the quality of power. Microgrids are completely compatible with a centralized grid and serve as purposeful components of grid expansion.

The selection of particular micro-grid technology can have far-reaching consequences for the sustainability of the services. Technical failures of even the most perfectly matched microgrid system may result from an absence of indigenous capability. Community involvement (of both men and women) is necessary for successful operation whether the system is locally or regionally maintained. Locally trained staff members often migrate to urban areas to exploit their new skills. As such, a consistent, reliable source of power from any micro-grid system depends on selection of trainees, particularly women, who are likely to remain in the area.

What Is a MicroGrid and How Is PV a Part?

Solar PV plays an important role in meeting the energy needs of the developing world, however, those needs are growing quickly while resources remain few. These conditions are perfectly suited to a PV microgrid solution, which provides reliable, lower comparative cost power in a more amenable timeframe.

A microgrid is a concentrated web of distributed energy sources, energy storage, and loads that normally operate connected to an electricity grid. The various energy sources are tied together on their own feeder, which is then linking to the grid at a single point of common coupling. A microgrid may be viewed as peer-to-peer transmission of energy, which is more networked and symmetrical, without a master controller or central storage unit that is critical for operation. Its reliability hinges on its diverse generation sources and ability to function and be controlled independently as needed (i.e. during a brownout or blackout). Microgrid energy sources may consist of an evolving mix of standard and renewable options. In a manner similar to the early hybrid cars, the beginning stage may have more fossil fuel utilization, but this would decrease with time. Standard power-supplying sources in a microgrid may also utilize novel equipment such as a microturbine to maximize efficiency while being augmented by PV. Over the course of time, the energy mix would become dominated by PV and possibly other renewables.

A set of examples of rural electrification solutions with mixed sources are shown in Figure 1.

Standard generators may be replaced by microturbines, which make efficient (possibly up to 80% efficiency) use of byproduct heat for local process heating or space heating, allowing flexible trade off between the needs for heat and electric power. Microturbines are small combustion turbines approximately the size of a refrigerator with outputs of 25 kW to 500 kW. A microturbine produces both heat and electricity on a relatively small scale and offers several potential advantages over standard energy generators, including relative low capital costs, limited moving parts, compact size, greater efficiency, lower emissions, lower electricity costs, and flexible fuel options. Solar combined cycle, a system that provides solar power during the day and standard power via natural gas combustion in a microturbine at night or under cloudy conditions, is currently under development by HelioFocus and Capstone. Examples of several Capstone microturbines are shown in Figure 2.

Case Studies and Discussion

SolarVision Co. has been providing guidance to a range of rural electrification customers in developing countries including India and Latin America countries, such as Panama, Cuba, and Chile, as well as Azerbaijan, Indonesia, and some clients in Africa. There are common points of note which develop from these engagements. It is possible to establish key points of learning, evaluate critical considerations, and provide technology guidance. Many of the clients are trying to understand the various technologies of PV, as well as CPV, and CSP along with wind and storage.¹⁾ The complexities of financing and maintenance are also points of note. SolarVision Co. is seeing increasing interest, which is gaining momentum. Our analysis comes from both the specific client support as well as detailed market analysis for this segment. SolarVision Co. is now actively involved with a solar project in India which will provide up to 14 MW.

A Few Case Studies Highlight Some of the Key Learning Points:

One of the authors traveled to Cuba to examine and provide guidance on their use of PV in microgrids for rural electrification.²⁾ As recently as 12 years ago, Cuba’s energy situation was bleak. The country had 11 large and quite inefficient plants generating electricity for the entire island. Most of the plants were 25 years old and only functioning 60% of the time, setting the stage for frequent blackouts, especially during peak demand periods. Cuba’s transmission grid also saw typical high percentage of transmission losses. In addition, 75% of the population was cooking with kerosene, and low residential electrical rates discouraged conservation.

Extended power outages following subsequent hurricanes in 2004 and overarching drivers of peak oil and climate change sparked Cuba’s ‘Energy Revolution‘-- the country’s commitment to prioritizing development of reliable energy sources. The Cuban populace in general expressed a broad depth of awareness of PV as a energy solution and were interested to have more inputs.1) The results have been impressive. Cuba has leap frogged to the top of the list of countries with strong energy utilization and low carbon footprint. In 2009, the World Wildlife Fund (WWF) declared Cuba to be the only country globally that is approaching sustainable development.

The solutions to Cuba’s energy needs were not easy. Severe economic constraints in Cuba has historically prevented significant government and private investment in energy infrastructure; however, the ‘Energy Revolution’ provided the foundation for Cuba to succeed through various measures, including energy conservation and implementation of small-scale renewable energy projects.

One of the gating factors associated with successful executing the ‘Energy Revolution’ is cost. Installed costs are low, in the range of about US$2.50/W; however, wind power production appears to be even more economical. As such, the Cuban micro-grid model utilizes a mix of energy sources, with PV being a significant part of the overall portfolio. The most appropriate scenario for Cuba appears to be a mix of PV, solar thermal, wind, and bio-gas generation.

 Figure 3 shows a PV installation at a Renewable Energy Center micro-grid supplying a total of ½ MW to the community in the eastern part of the island near Bayamo.

India boasts a much stronger economy and solar implementation strategy than Cuba, however, it has undergone much criticism of its perceived reluctance to move away from fossil fuel burning and faces immense challenges in rural electrification due to its rapid population growth, poor electricity infrastructure, and lack of political commitment and government resources. India’s Solar Mission represents one of the world’s largest renewable energy plans to date; a project aimed at expanding India’s solar capacity from 3 MW to a target of 20 GW by 2020 and 200 GW by 2050. This immense undertaking forms the centerpiece of India’s National Climate Change Strategy and will cost upwards of US$100 billion to implement even part of this ambitious plan. These challenges make India an ideal candidate for reaping the benefits of the cell phone-microgrid model. SolarVision Co, has had various clients in India looking at the considerations for PV in microgrids, as well as supporting clients currently installing PV.

Microgrid installations are a reality in Japan, and it is surprising that micro-grid applications were not a part of the safety design for the nuclear power generation facility in Fukushima. The Sakura at Sendai Microgrid electrical generation and distribution system was constructed to serve a small local area in Sendai, Japan. The microgrid system is connected to the main electrical grid, but includes its own solar PV and gas-powered generators and serves a high school, medical school, and a water treatment plant.

Key Learning

The key point of learning from Cuba is that high-level government support and commitment of the populace are necessary for a successful energy revolution of any appreciable scale. Cuba created its own path towards a new energy paradigm by applying concepts such as distributed generation, efficiency, education, and the gradual expansion of solar energy across the country.

India’s ambitious, long-view strategy for expanding its solar capacity is another key strategy to consider. Such a strategy shows the intent of government support and specifically targets opportunities for entrepreneurial investment. India also intends to request both monetary and technological backing from developed nations in order to meet its Solar Mission objectives. Without such an ambitious plan, this type of support could not be won.

Financing of solar PV projects, whether microgrid scale or large utility scale, remains a limiting factor. As there are still limited financial resources, there is pent-up demand for PV in the microgrid context. However, the prices are dropping and the urgency for energy is increasing to the point where these developing countries are at a cross-over point and seriously looking at how to implement some modes of microgrid.

The broader view is that they are interested in hybrids of solar with co-generation. It is dramatically lower up-front cost to buy diesel generators; however, operational costs are increasing. Indeed, in some regions the cost of petrol is even higher because of transportation (e.g. Nepal) and the microgrids are in fact financially attractive. The hybrid mode combines a mix of PV, diesel and other elements. Various SolarVision Co. clients are eager to understand better how these moving parts work and how to get started.^{3, 4)}

PV is well suited to be a key component in microgrids. The global grid-connected PV capacity is rapidly approaching 40 GW with most of this growth in the last 10 years. Microgrid and off-grid segments are showing strong potential to become major components in the PV market. SolarVision Co. estimates the opportunity for micro-grid installations over the next several years at levels approaching 5 GW. Indeed, as the leading developed nations scale back on incentives, and even on the actual installations, it is possible that the micro-grid market will ramp up into a position that will provide a major demand market for solar.

The worldwide movement from fossil-fuel-based energy sources to renewables is a trend based on the desire for energy independence, reduction of Greenhouse Gas (GHG) emissions, and limited fossil fuels resources. HSBC’s senior global economist, Karen Ward, recently reported in a research note that there could be less than 49 years of oil supplies left, even if demand were to remain flat.⁵⁾ Fossil fuel reserves are finite. Derived from this movement away from fossil fuels is recognition among industrialized and developing countries of the need for non-standard energy provision options. This is especially true in developing regions which lack the basic infrastructure. Further, even where an electric grid exists, there are often problems of intermittency and power outages. Micro-grid power production could easily range between 1 MW to an aggregation of 10s of MWs and have the ability to evolve and expand or decrease with local needs, as those needs evolve and become recognized.