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Importance of the engine-driven generator in microgrid designs

As already discussed, the purpose of the microgrid solution is to provide cleaner, more efficient, and locally-created power when compared to utility-scale distributed power typically based on coal or nuclear. The benefits have been well documented in industry. Microgrid designs today typically start with a focus on the renewable aspects of the power solution. A recent study by global consulting firm Woods Mackenzie found that although a record number of microgrid systems were installed in recent years, most of these installations relied on power distributed from the burning of fossil fuels. A lot of energy and focus is placed on the solar, wind power, and necessary aspects of battery storage in the microgrid, and while these are of critical importance, one cannot and should not overlook the strategic importance of a backup source of power with high reliability. This is critically important in islanded or interruption-prone applications where residential, commercial and industrial power consumers cannot go without power for any extended time period. Adding the resiliency of fossil-fueled, engine-driven backup generation as a key component of the microgrid solution makes projects more feasible in almost all possible scenarios.

Engine-driven generators burning a variety of fossil fuels can provide a last-step resiliency for the microgrid that is not and cannot be offered by wind, solar, battery storage, or any other renewable source of power. It is a time proven approach and technology deployed in hundreds of different types of applications in millions of individual installations across the globe. These generators are required to ensure complete resiliency for today’s microgrid, which has become and is further growing dependent on intermittent renewables.

Generator fuels of choice: diesel vs. vs. natural gas vs. propane

Once the microgrid project developer has confirmed their decision to include the resiliency of an engine-driven generator in the microgrid, the next discussion required is around the potential fuel supply options, and the advantages and disadvantages of each. For most applications there would be three main fueling options typically considered in stationary industrial generators: diesel, natural gas, and propane. Other fuel choices like biogas, renewable natural gas bifuel, heavy fuel oil, and hydrogen are or will continue to be niche offerings for the foreseeable future. The project specific options for fuel choice and logical solution set can be quite varied for each project and are influenced by such things as capital expenditure, fuel tank rental,

fuel maintenance requirements, availability of natural gas pipeline, resiliency or total runtime required, site storage options, equipment maintenance, and exhaust emissions aftertreatment needs. A site with access to a natural gas pipeline has a very different project plan than one where stored fuel like diesel or propane is needed. Also, the cost of achieving and maintaining ultra-low emissions on a diesel engine, such as tier 4f final technology, can be different from a natural gas engine. Potential usage of the generator in economic dispatch mode can also have an impact on the fuel choice, as in many markets this would drive a diesel from EPA tier 2 compliance to tier 4f standards. Capital and operating expenditure considerations now just got a lot more complex!

When considering the general emergency standby market, the industry has seen a very strong move away from liquid fuels to natural gas for its clear benefits on emissions ,operating expense, and maintenance. The combination of these performance aspects, when combined with the unlimited operation provided by the reliable natural gas distribution system, will continue to drive the market in this direction. Recent shipment studies by the firm Frost & Sullivan have tabled the North America total generator set market (all application types and sizes) at about 40% natural gas, with a year over year increase in that percentage by 1-2%.

This increase has been the historical trend going back 10+ years, and market drivers like running costs, emissions regulations, and application flexibility will continue to favor natural gas over diesel if it is available. It is important to consider all aspects of the performance requirements on the generator before assuming one particular solution is the only way to go. These same trends that have affected the emergency generator market will have similar impacts on microgrids.

Two great examples of this approach are recent projects in which Generac Industrial Power generators have been utilitized. The first such case is the Kahauiki Village microgrid in Honolulu, Hawai’i. This microgrid is primarily powered by solar with battery storage, but will rely on a propane-fueled generator as an option (in addition to the grid) to charge the batteries if there is insufficient solar. This aspect is key in areas where storms are possible that could knock out the grid as the back up source of electricity, as well as to help avoid expensive demand charges that can be received when pulling grid power during high strain times. The second example is the Sagehen microgrid in Truckee, California, which was constructed to alleviate concerns around high-tension lines and their potential influence on sparking wildfires. In this application a remote microgrid was constructed to provide power to the local residents through a combination of solar and battery storage. However, due to the potential of low sun & high snow conditions, and limited battery storage, the containerized solution was designed with a propane stationary generator to provide a reliable source of standby power to charge the batteries as needed.

Alternative uses and return on investment through economic dispatch

Alternative purposes for the generator and the type of revenue and return on investment that can be achieved, are often overlooked in the study of the microgrids. Generators are most often assumed to only be there in case of emergency, to be used in standby mode

in case of complete failure of the solar/battery/wind technologies. It is becoming increasingly popular to enroll these normally dormant standby assets in such highly profitable utility support programs that go by names such as multiple peak reduction, global adjustment, demand response, daily dispatch, and others. These programs are all forms of economic dispatch, whether it is behind or in front of the meter. There are different regional programs that can be followed, where the engine-driven generator as deployed in the microgrid can be used for additional purposes beyond emergency support. Traditional peak shaving can also be conducted if such a system were installed at a business or manufacturing facility, the economics of such would be very site and utility rate specific.

Each opportunity to participate in such programs requires a deeper study around the project financials to determine its feasibility, payback analysis and return on investment. Many if not most applications will find a financial return that can be complementary to other cost avoidance that may have been included in the initial project proposal. A key point to be considered here is the influence on emissions and fuel choice, as there are regulations and expenses to be studied and fully considered when taking the engine-driven generator from a standby use case to now a “beyond standby” application, which may consume more fuel, operate more hours, reduce

allowable engine specific emissions, and change the maintenance requirements on the engine. The other aspect to consider is that running more hours burns more fuel, which can require a different fuel storage and refill plan if it is a fixed fuel storage unit like diesel or propane than if the generator was connected to an unlimited fuel supply like a natural gas pipeline.

The utility scale microgrid

There is an additional trend in the distributed generation space where engine-driven generators can be cost effective aids to the local grid, and that is the utility scale microgrid. With the overall aging of the grid and increasing dependence on intermittent renewables, the grid today is facing great challenges to reliability and resiliency. In many parts of the country, these challenges have boosted opportunities for demand response programs and other forms of economic dispatch. And while actions like demand response are normally discussed at the end customer level and in the form of load curtailment, there is a growing opportunity to address these issues with purpose-built utility scale power plants. These plants can be configured with natural gas generators and offer a cost-effective means of addressing the market power gap without concerns for fuel supply limitations. An example of such a project was recently commissioned in PJM and shown in the included picture. WHITE PAPER: ENGINE-DRIVEN GENERATORS AND THEIR CRITICALITY IN MICROGRIDSPictures of the Kahauiki Village microgrid, where a propane generator is integrated with photovoltaic solar panels and battery storage.