“The major cost of the controller is the engineering time to support each customer’s system configuration. Most customers see a positive payback within two to three years of purchasing an advanced controller from Siemens, Jacquemin says. The cost will vary based on the microgrid controller’s sophistication and project complexity. Of the three main components of the microgrid – generation, infrastructure automation and control - the microgrid controller is usually the smallest part of the overall project budget. Siemens would then dive deeper into the system requirements to determine the size and type of equipment required. And the control functionality they want is advanced, so that is going to be cost.” The grid infrastructure is not automated it is old and manual, so that is going to be a cost. They want to add solar, so that is going to be a cost. “If you have answers to those questions, now we would be able to go through and say, ‘There is existing CHP, so that is not going to be a cost. Next, Siemens determines 1) If existing infrastructure must be upgraded with grid automation technology and 2) How sophisticated the microgrid controller needs to be.ĭoes the customer want the ability to island and reconnect to the grid? Do they want to optimize efficiency of generation mix or participate in the wholesale ancillary markets and demand response? Do they want a microgrid that can be expanded in the future in terms of size or capabilities? “Generation is the largest cost. If you already have on-site generation, then you are looking at smaller grid infrastructure and control investments,” says Jacquemin. Or maybe a college campus already operates a CHP plant and wants to add solar and advanced optimization through a control solution. Perhaps a military installation has a solar array, but decides to expand it into a microgrid upon realizing that solar, alone, does not guarantee power when the grid goes down. So a threshold question that Siemens asks a customer is, “What do you already have installed within your energy infrastructure?” Many microgrids are not greenfield, but build upon existing electrical infrastructure, which helps reduce the overall cost. Sally Jacquemin, Siemens Microgrid Business Manager To get a better understanding of what goes into microgrid pricing, Microgrid Knowledge recently talked to Sally Jacquemin of Siemens, and Steve Pullins of Hitachi, along with Chiesa and Adams. Generation typically accounts for most of the cost. Sources we’ve interviewed cite project proposals as low as $250,000 to as high as $100 million. So there is no quick and simple price to give a prospective customer. Or as S&C Electric’s David Chiesa puts it: “If you’ve seen one microgrid…you’ve seen one microgrid.” When asked, “What does a microgrid cost?” ABB’s Nathan Adams responds, “What does a house cost?” Just as houses span from builder basic to celebrity mansion, microgrids range in size and sophistication.
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