One could make a counter argument that low-cost natural gas networks in Europe could offer synergies with RDEG, and allow countries to help meet their carbon reduction goals more cost effectively. The current low price of natural gas is making large central station coal and nuclear power plants look like bad bets. Whereas many CHP and fuel cells can burn either natural gas or biogas, the flexibility of these power generation technologies will likely continue to play a role in the future. In fact, CHP units make the ideal anchor technology for a microgrid, since they reduce the need for costly energy storage and also provide two forms of energy – electricity and heat – for large institutions such as universities or commercial and industrial (C/I) complexes. Tiga Energy is one of the few U.S. firms to focus on C/I microgrids and on a value proposition linked to today’s low natural gas prices. The company is focused on integrating RDEG, such as solar PV, with fossil fuel on-site combustion, arguing that current low natural gas prices can actually help accelerate deployment of microgrids. What is the rationale? Lower natural gas prices enable more headroom for more expensive solar PV. This is the value proposition it hopes to sell to cost-cautious C/I customers. The company has created a formal joint venture with EcoMerge USA, LLC, a subsidiary of Dentsu Japan and Innovative Energy Group, LLC, with the goal of offering blended renewable and natural gas fired on-site generation facilities of up to 15 MW in scale in Texas and throughout the U.S. In Europe, the business case for natural gas bumps up against mandates
to shrink carbon footprints. Nevertheless, grid operators are seeking a mix of options to help balance variable generation and see-sawing customer loads. Existing natural gas networks (and district heating and cooling systems) are valuable assets that can also be tapped to help smooth out the ramps up and down of wind and solar energy. Whereas natural gas is seen as a competitive threat to renewables (and therefore microgrids and VPPs) in the U.S. due to the uncertainty of available government support, the dynamics in Europe are less clear. Of course, the beauty of both microgrids and VPPs is that they can tie together a great diversity of resources (supply, demand and storage) and optimize them for the customer. These platforms are really agnostic to fuels, and many of today’s microgrids rely on natural gas-fired generation. Whether the current shale gas boom helps or hinders the evolution of smart grid technologies such as microgrids or VPPs remains an open question.
About the author
Peter Asmus is a Senior Analyst with Pike Research, a clean tech intelligence company based in Boulder, Colorado, with offices in Washington DC, the United Kingdom and South Korea. His coverage area is renewable energy, microgrids and other smart grid topics (including virtual power plants). He is author of four books on energy issues, including Reaping the Wind (Island Press, 2001) and Intro duction to Energy in California (University of California Press, 2009).
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