Microgrids, small power systems that integrate self-contained generation, distribution, sensors, energy storage and energy management software with a seamless and synchronized connection to a utility power system, can operate independently within that system.
Because state and federal policies largely do not address microgrids, the Wisconsin Energy Institute and the Green Exchange Madison worked with students in the cost-benefit analysis course taught by David Weimer to assess the costs and benefits of a microgrid.
As microgrids facilitate the integration of renewable energy into the utility power system, they can displace energy otherwise purchased at retail rates, reduce demand on the local utility and regional grids, and serve as an independent system that avoids disruptive events such as faults (i.e., short circuits), voltage fluctuations, and momentary interruptions, thus providing users with a higher level of power stability and reliability.
Microgrid systems are relatively expensive, but continued deployment and research are likely to lower their costs. In addition to improving U.S. energy production, microgrids have great potential for use in developing countries with limited power system infrastructures.
Students Tyler Brandt, Ben Kaldunski, Jiaqi Lu, Michaela Meckel and Leona Yi-Fan Su conducted two case studies. One looked at an urban area of Madison, the other a dairy farm. They found that the urban microgrid system did not achieve net benefits to the business owner or society at large because of the high capital cost of solar photovoltaic equipment. In contrast, a rural system would have net benefits.
They recommended that the Wisconsin Energy Institute encourage the construction of biogas-based microgrid systems in the rural Wisconsin. They noted that targeted subsidies and lower capital costs are needed to make urban, solar-based microgrids cost competitive.
"The cost-benefit analysis study on microgrids was helpful in thinking about next steps for policy, improving economics, and technical changes necessary for designing and implementation of the next generation of microgrids," says Gary Radloff, director of Midwest energy policy analysis for the Wisconsin Energy Institute. "We are preparing now some research proposals for microgrid 2.0 and the CBA added to our body of knowledge."
"This research team did not back down on a complex subject and pushed ahead to develop a useful model and final report," Radloff adds.