Decarbonization Solutions for Sustainability: Calculating the Cost of Resilience
How Microgrids can build Resilience – against Climate Change and Pandemics in a fast-changing world. Part II
In Part I of our blog on microgrids, we explored how this clean energy technology can help customers achieve autonomy and control over their power systems and needs, and build resilience against extreme economic fluctuations as caused by COVID-19. In Part II, we explore a bit further the concept of resilience and its cost or value specifically in relation to microgrids.
Calculating the Cost of Resilience
Resilience is a buzzword in the industry at the moment, but how does one actually calculate the cost of it, or its value?
Abengoa’s experience of bidding on microgrid projects in remote locations in Africa and island locations has resulted in a benchmark microgrid LCOE (Levelized Cost of Electricity) of 20-24c/kWh for projects in the 1-5MW range, and 16-18c/kWh for microgrids in the 10-20MW range (these LCOEs are subject to exclusions and can change significantly due to storage size and other aspects, however are a general benchmark).
In one recent case, Abengoa analysed the design and provision of a hurricane-proof microgrid system, consisting of PV and Li-ion Batteries, that could reduce an island’s annual diesel consumption by 88%. In that case, ‘resilience’ is multifaceted and paramount. We were able to design a project that is supposed to withstand a Category 5 hurricane – by being mounted just high enough off the ground to avoid flood damage, but low enough to avoid severe wind damage, and result in an 88% reduction of the island’s annual need to buy and transport diesel in large quantities. Here, we can see how the decarbonization aspect of a microgrid can both save opex and provide resilience. In such a situation, just from a pure tariff-offset perspective, a payback period would be achieved in 4-5 years. The extra value of resilience here – while difficult to calculate, for hurricane resistance and climate change mitigation as well as less dependency on fuel supply issues and demand fluctuations, in an island where the vast majority of power is consumed by tourism – is clear.
“Abengoa’s energy management system and microgrid experience provides a unique value-add and a competitive offering for microgrid engineering, procurement and construction.
Abengoa has installed two microgrid projects and is currently constructing a solar complex combining photovoltaic energy with solar thermo energy, in Chile. Abengoa was the first company to hybridize utility-scale solar with gas, and the first company to hybridize solar CSP with solar PV. The CSP/PV project in Chile incorporates two energy storage systems, to provide the world first truly dispatachable utility-scale renewables plant, which is designed to operate at 93% availability factor and with 17 hours of storage produced from clean energy.
Abengoa’s proprietary energy management system and microgrid experience – having managed the integration between multiple technologies – provides us with a unique value-add and a competitive offering for microgrid engineering, procurement and construction and integration.