Markus Bruegmann On The Importance Of Microgrids In The Transition To A Carbon Neutral Tomorrow

Markus Bruegmann is the Global Product Group Manager for ABB’s Microgrids and Distributed Generation product group. We had a long discussion with him about the importance of microgrids in the race to a zero carbon economy, about the challenges that come with the integration of microgrids, and about his vision for the future of the energy transition.

First and foremost, how would you say that ABB is contributing to driving the transition to a carbon neutral tomorrow, today?

During its 125 years of history, ABB has always been driving innovations. Today, we are the world leader in microgrids technology. Our main goal is to integrate more renewables into grids across the globe, thus being a main actor in driving the energy transition forward. We are continually working on lowering the carbon intensity across all our services and all our current implementations of the microgrid technology save fossil fuels every day.

Why are microgrids of crucial importance?

We’re currently witnessing a global trend in full swing, which is the rapid growth of renewables. This trend is driven by price reductions and the more decentralized nature of renewables. In both mature and emerging markets, renewables have taken leadership for the investment in power generation. The microgrid technology is the natural development to keep this trend growing, and to integrate more renewables into our power supply on and off grid. Renewables also have a different interaction with the grid and the consumer; this interaction needs to be managed as intelligently as possible, which modern microgrids do while improving system reliability.

What are the main advantages of microgrids?

Microgrids are like smaller versions of the national electricity grid running independently. They are a complement to the centralized transmission grid system, which has quite a lot of drawbacks (energy loss, high investment cost, disturbances for users, etc.). The microgrid technology addresses all these issues, especially for communities and regions that have adequate renewable energy resources.

Microgrids also have much smaller financial commitments, they use renewable energy resources, hence are more environmentally friendly with lower carbon footprints; they are also isolated from any grid disturbance or outage and require fewer technical skills (as large scale power plants) to operate as they rely more on automation.

Microgrids thus enhance the grid resilience and stability and contribute to the energy security by controlling its distributed energy resources. Operating in either grid-connected or islanded mode, microgrids have the ability to integrate and dispatch these resources, which include renewable generation, fossil fuel generation and storage, and finally manage loads.

On the other side, what would you say are the biggest challenges facing the uptake of microgrids worldwide?

What’s not a problem is the technology. Indeed, it has been here for many years, and has now reached a mature status. Our main challenge today is to convince customers and stakeholders to accept new roles and responsibilities. In every area of business, it is always a challenge to adapt traditional commercial and technical concepts, but this is also what makes this work interesting. We’re pioneers.

With the integration of microgrids, existing players that have always had central power lose some of that control. There is a shift in responsibilities. A large energy customer can, for instance, implement his own microgrid and produce a lot of his energy, instead of buying it from his utility. But what happens when this customer doesn’t want to maintain his microgrid? Could the utility provider make new revenue by maintaining the microgrid, and providing high-quality grid stability? These questions are still unanswered, although we are already seeing the emergence of multiple business models, which is exciting.

As for any new technology, we must create trust in the concept. As described, microgrids go along with a shift in responsibilities and loss of centralized control. Not all influential stakeholders in the electricity system are happy with that shift. And regulators responsible for system stability need to be further convinced that decentralized power generation will guarantee and even improve grid stability. Let’s not forget that with any change, always comes resistance.

How are microgrids revolutionizing the energy structure in emerging countries?

In an emerging market with growing population and electricity demand, microgrids provide reliable power supply, starting from small energy systems and finally supporting the bulk of the electric system. The implementation time of microgrids is much faster and cheaper than fossil fuel based power plants and large infrastructure. To give you a rough idea, it takes around six months to get a microgrid generating electricity online and a realistic timeframe for coal plants is between 5 to 10 years.

Microgrids are best known for delivering electricity to communities or industrial operations in remote or inaccessible areas where it is too costly or difficult to provide a grid connection. However, grid-connected microgrids are now taking on a new role in developed areas of the world to ensure continuity of supply in the event of potential grid faults and emergencies. The ability of microgrids to seamlessly separate and isolate themselves from the main grid when needed is an increasingly important feature.

As a disruptive invention, have you ever faced any resistance from mainstream grid suppliers and governments when it comes to introducing microgrids to markets across the globe?

We had in the past, but it is becoming better. Years ago, grid suppliers and utilities were hesitant because the magnitude of implementation of renewables and batteries were not so clear. Today, distribution system operators are a lot more open to the concept of microgrids. They are responsible for providing grid stability, and they face a lot of integration of renewable energy  — starting from households up to utility scale projects  —  so they are familiar with the realities of a changing grid.

In fact, whoever is responsible for the system stability has now started to see distributed generation and microgrids as a reliable option.

Tell us about ABB successes in transforming the energy systems abroad?

We have over 40 references globally with a wide spread of applications, from industry applications to powering harbours. Let me give you a few examples. As far as industrial applications are concerned, we have delivered a microgrid to support a factory in South Africa with handling of critical loads that also stabilises the grid connection, integrating renewable energy and batteries. This has reduced the downtime of the factory as well as the usage of diesel generation, resulting in a lot of savings for the customer. We are currently commissioning a similar project for the Red Cross to support their logistic center in Tanzania.

Another recent project we have done was to build several microgrid solutions that ensure high penetration of photovoltaics into the energy systems of mines in very off-grid locations. Those microgrids ensure grid stability and cost reduction from less usage fossil fuels.

In Aruba and Kodiak Island (Alaska), we have delivered solutions to increase the penetration of renewables and reduce the high cost of diesel for the local community. These projects were good examples of the application of microgrids powering remote communities.

Among the other projects we are proud of is the implementation of microgrids on an oil and gas platform. This project will specifically be designed to provide a so-called spinning reserve and replace existing gas turbines.

All of those implemented microgrids drastically lower the usage of fossil fuels. It’s difficult to give an exact number, as every implementation is different, but when you switch from an often diesel-powered scenario to a microgrid scenario with a diesel supplying just 15% of the energy during the year  —  you need a lot less fossil fuels.

In regard to these off-grid mining projects, can you tell us how renewable and storage technologies present an opportunity to improve mines’ environmental footprint?

Mines in off-grid areas generate most of their power with diesel generators. Although the cost of diesel went down, the transportation costs to get the fuel to an off-grid location have remained the same. More and more mining companies are also looking into sustainable solutions to improve their environmental footprint.

Mines are mainly located in areas with either good wind or photovoltaics conditions and often have little restrictions in regards of available space. With the drop in CAPEX of renewables, the cost of electricity produced by wind or photovoltaics can be significantly cheaper than any other energy source.

In order to use those renewable resources, ABB’s microgrid solutions can enable a mine to often use as much as 100% renewable energy while ensuring grid stability and power quality.

According to your experience, what single change  —  technological, regulatory or otherwise  — could further catalyze the industry?

There are three very obvious catalysts. First of all, more regulatory certainty would increase the speed of growth, as more certainty usually improves the availability of financing. That’s a simple observation, but we can observe this in many projects. Any serious implementation of carbon pricing would also greatly benefit the integration of renewables and thus microgrids, that’s the second idea. Last but not least, battery prices are decreasing  —  any additional decrease multiplies that attractiveness of microgrids in many areas.

Talking about the future, where globally do you think will see the biggest expansion of microgrids in five years from now?

We look at this less in geographies, and more in applications that geographies can have in common. The largest growth will happen in remote communities, whether this is a town in Alaska or a village in Africa. This should be followed by established utilities pushing into microgrids to lower costs and retain customer access. Another very promising parameter we expect is the growth coming from commercial and industrial applications.

How optimistic are you about “plug and play” microgrid systems like the PowerStore supporting the replacement of most of the fossil fuel-based capacity in off-grid locations like mining or island utilities in the future?

We are very optimistic about it. ABB has standardized and productized PowerStore solutions to enable “plug and play” integration. These solutions are pre-designed and they are transportable on trucks to any place in the world. The intelligent control of the PowerStore is also predefined for various applications and works for both grid-connected and off-grid systems.

What are the main benefits of the different models of the PowerStore system (Standalone, Hybrid, Station, Integrated)?

We have standardized different products for different applications so our range of products fulfill the market requirements that we have studied for many years. The Standalone is specifically built for larger sites like mining and in case battery manufacturers take a more visible role in the projects; the Hybrid system is most useful for the very small application in remote villages; and the Station and Integrated usually fit better for commercial and industrial applications.

What is your vision for the future of off-grid electricity?

I hope that off-grid areas in emerging countries will leapfrog several steps in the sustainable development and directly embrace a multi-energy infrastructure and distributed generation. The best case scenario would be a 100% sustainable power generation without fossil fuels, meaning all electricity would be generated from renewable local sources without limits. This would bring local job creation, and immediately empower these communities with services such as digital communication, improved health care and better education.

With the ABB microgrid technology and our automation solutions, we are working on achieving this goal.

Markus Bruegmann is the Global Product Group Manager for ABB’s Microgrids and Distributed Generation product group, based in Zurich, and had previously led the global marketing and sales of the former Power Generation business unit at ABB. Before joining ABB in 2010, Markus earned an Engineering degree with a focus on Energy Technology, worked for the Japanese multinational conglomerate company Hitachi, and held several international management positions in marketing, sales and business development.

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