Energy Supply Trends
Green energy, natural gas, energy storage, and demand response are all trending in ways that benefit the financial performance of microgrids.
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Green energy, natural gas, energy storage, and demand response are all trending in ways that benefit the financial performance of Microgrids . . . especially when an optimal mix of resources is achieved. Take a look at some of the most significant trends shaping Microgrid economics today and what this information means for the future.
Solar power has become a cost effective tool for lowering an organization’s energy bill. In fact, the US now has more than 1,100 MW of installed solar capacity encompassing more than 42,000 sites. A new solar project is installed about every 3.2 minutes1. By 2018, solar is expected to triple in the US.What’s particularly beneficial about solar generation is that it is often at peak production capacity during the hours when electricity prices and demand are the highest. Therefore, adding solar photovoltaic (PV) to your distributed energy portfolio can have a major positive impact on both your grid energy consumption and demand charges. While the operating cost is very low, the upfront investment cost was once a deterrent . . . but not anymore. System prices of commercial PV systems declined 6% to 7% per year, on average, between 1998 and 2013, and by 12% to 15% between 2012 and 20133. Solar panel prices alone have dropped 64% since 20101. Solar power is quickly reaching grid parity in the US as the costs for solar equipment continues to decrease.
Additionally, a number of incentive programs are available from local, state, and federal governments, as well as other organizations that can further decrease all types of renewable energy system costs.
The US is experiencing a boom in natural gas production, resulting in lower prices. In addition, because the most efficient way to transport natural gas is on land through pipelines, most of the natural gas produced stays in North America. This is why natural gas prices are rising in other countries, but falling in the US.
This abundant supply and record-low pricing is good news for microgrid owners because it will ensure the long-term, cost-effective use of combined heat and power (CHP) systems. These CHP systems are becoming an increasingly popular distributed energy resource for facilities with year-round heating and cooling needs.
1. Solar Energy Industries Association
2. American Wind Energy Association
3. Lawrence Berkeley National Laboratory, U.S. Department of Energy
4. Demand Response and Smart Grid Coalition
5. Federal Energy Regulatory Commission