BAE's Balance Energy Wants to Build Microgrids, Starting with SDG&E

By Jeff St. John

A newly launched effort of BAE Systems (BAESY.PK) that's employing one of San Diego Gas & Electric's former smart grid gurus is now seeking to build and own "microgrid" projects across the country.

Balance Energy is a San Diego-based initiative of the U.S. arm of British defense contractor BAE Systems PLC. Though it has a short history, it launched its plans with great fanfare Tuesday in an after-hours presentation at the GridWeek conference in Washington, D.C.

"We supply end customers with renewable energy, and package it up into a microgrid," Terry Mohn, Balance Energy's chief innovation officer, said Tuesday.

Mohn until recently held the title of Technology Strategist for Sempra Energy (SRE), the parent company of utility San Diego Gas & Electric (see Smart Grid Q&A: Terry Mohn).

So perhaps it's not surprising that Balance Energy's first project is intended to be with San Diego Gas & Electric.

Mohn described it as a $212 million project aimed at providing the University of California at San Diego with its own microgrid – a self-contained electricity generation and distribution system that can serve as an island of stability amidst a wider-scale power grid.

San Diego Gas & Electric is seeking a $100 million Department of Energy smart grid grant for the project. That grant would include grid-scale battery storage and homes equipped with networked energy-saving devices and includes SAIC (SAI), Qualcomm (QCOM), Intel (INTC), IBM, Cisco (CSCO), General Electric (GE), and U.C. San Diego.

U.C. San Diego would serve as a test-bed for Balance Energy, Mohr said. But he'd like to see the model replicated at college campuses, business parks and other entities that could see a value in insulating themselves from the grid's fluctuations in energy prices and reliability.

Siemens and startup Viridity Energy have said they'll partner on such projects, and Duke Energy is working on a microgrid pilot project in its headquarters city of Charlotte, N.C., which it calls a "virtual power plant" linking solar power, battery storage and homes linked with smart meters and in-home energy control networks (see Sequentric Working on Duke Pilot Project).

Some of them have already received funding from the DOE. Fort Collins, Colo. has landed $4.8 million in smart grid demonstration grants for its FortZED project, which stands for Fort Collins Zero Energy District (see Green Light post). And the Illinois Institute of Technology is getting $5.4 million for a similar project at its Chicago campus, which it calls a "perfect power prototype." (See DOE Hands Out $47M For Smart Grid Demos).

But those projects were already slated to receive their funding. Newly announced projects, on the other hand, have already asked for far more money collectively than the $3.9 billion that the DOE has available, meaning that competition for funding will be fierce (see Green Light post).

San Diego Gas & Electric has already asked the DOE for $30 million to build a utility-wide communications network – and while it has an impressive list of partners for both proposed projects, so do many other applicants (see Green Light post).

BAE, for its part, joins fellow defense contractors Lockheed Martin (LMT), Raytheon (RTN) and Boeing (BA) that are entering the smart grid space, though those companies have primarily cast themselves as system integrators and providers of security for smart grid deployments (see Defense Contractors Pursue the Smart Grid).

Still, microgrid projects seem to be a natural for military contractors, since military bases could be seen as one of the "critical assets" that need to keep the power on in case of natural disruption or intentional attack.

Lockheed has said it is working on several microgrid projects, and the Department of Defense has given General Electric $2 million to build a microgrid for the U.S. Marine Corps base in Twentynine Palms, Calif. (see Green Light post).

Comments

[George Marc...:]

Microgrids can clearly be a cost-effective solution to meeting future electical power demand, given the rapidly aging US electrical grid infrastructure, the cost of siting and building new power plants and the cost of new transmission lines ($3-$4 million per mile for high voltage power lines). However, the microgrid strategy requires two major system components in order to be an ecomically viable alternative to the current, capital-intensive, electrical power infrastructure. First, there must be on-site electrical power generation. Second, and equally important, there must be on-site electrical power storage in order to ensure 24/7 reliability for the microgrid. Electrical power storage is actually the more difficult of the two to accomplish.

Take the University of San Diego project as an example. The on-site electrical power generation will be based on solar energy, most probably photovoltaic solar (PVS). Unfortunately, for 24/7 operation, the typical storage solution for a PVS system is an enormous bank of batteries, which must be greatly oversized for many days of storage in order to ensure reliability. Conceptually a simple approach, but a very capital-intensive way to ensure reliability.

A more sophisticated approach would start with solar energy, but would then take advantage of other energy assets that the University currently treats as waste. Integration of solar energy and waste-to-energy makes the microgrid both reliable and economical.

PVS is part of the microgrid solution for a place like San Diego with high insolation levels. PVS supplies virtually all of the University's electrical power demand when the sun is shining. Additional solar energy is captured and stored during the day by second system: a compact linear fresnel reactor (CLFR). The CLFR is a solar concentrator that heats a fluid (such as oil or a molten salt) by focusing the sun's rays on a field of fluid-filled tubes. Solar energy is thereby "stored" as heat for electrical power production at night in the CLFR tanks. The CLFR is, in effect, a solar "battery", which works in conjunction with PVS. At night, when electrical power is needed, efficient Stirling engine generators (heated by the CLFR fluid and cooled with a ground source heat pump) provide electricity for the microgrid. Sunpower and WhisperGen are two companies that manufacture Stirling engine gensets. Ground source heat pumps are available from any number of manufacturers.

Because the CLFR is a heat storage system, sources of heat other than the sun can also be used to assure microgrid reliability not only at night, but on days when the insolation levels are insufficient (e.g., during the "June gloom"). The City of Kobe, Japan, as part of its wastewater treatment process, converts biosolids in its wastewater and waste cellulosic biomass into biomethane by means of anaerobic digestion. A university has these exact same waste-to-energy resources available. By installing an anaerobic digestion system, another form of stored energy is now available: methane. Since the methane is derived from biomass, it too is a form of stored solar energy. As needed, the methane is combusted to provide additional heat to the CLFR fluid for electric power generation. To the extent that there is excess methane available, it can be compressed and be used in buses (as in Kobe) or other university vehicles that run on natural gas. Methane serves as a "buffer" biofuel for 24/7 microgrid reliability and it is produced on-site. Solar energy and "stored" solar energy can thereby work in combination to provide reliability to the University microgrid.

An integrated approach to the microgrid requires that capital assets be used wisely. Because fuel costs are essentially zero (solar energy and biomethane), the capital costs are the key economic drivers. Reliability is the key demand driver. For the University, PVS is an excellent first step. To assure microgrid reliability, however, the storage issue must simultaneously be addressed. Although not the only approach, a CLFR/biomethane system can address the storage issue in both a cost-effective and carbon-neutral manner for a university.

Of course, any new microgrid system should also be designed to minimize electrical power consumption through the best possible means of demand control. As part of that effort, ground source heat pumps, which take advantage of the earth's constant temperature as a heating/cooling sink, should be integrated into each building's HVAC system to minimize electrical demand from the microgrid for heating and cooling purposes. Microgrids, if intelligently planned and executed, make a tremendous amount of sense and will indirectly benefit the electric power grid infrastructure by reducing future demand. However, a simple microgrid approach, based on PVS and an oversized bank of batteries, is not necessarily the best route and actually could result in microgrids being chalked off as interesting, but uneconomical, alternatives to the centralized power grid infrastructure. So it is very important that the demonstration microgrids get it right the first time.

Sep 24 02:30 PM