Microgrid Analysis and Case Studies Report - California, North America, and Global Case Studies

The Energy Commission seeks to understand the technologies, business models, scale, and vendor landscape supporting microgrids that are commercially viable in the absence of government grants and funding. This report features 26 microgrid case studies from California, North America, and other countries that make innovative business cases and rely on government support for less than 50 percent of project costs. The microgrids profiled range in size from 78 kW (a small demonstration in Michigan) to 112.5 MW (Denmark), and serve commercial, military, municipal, education, agriculture, and utility clients. The majority of projects (93 percent) use solar photovoltaic and energy storage as part of the microgrid generation mix. Diesel and biogas distributed generation technologies are also prevalent.
Analysis of the case studies shows that microgrid business models are still diverse and offer numerous value propositions to hosts. California projects report value propositions of renewable energy integration, resiliency, bill and demand charge savings, and a reduction in carbon footprint. This aligns with California’s state renewable energy and carbon reduction mandates, and is also a result of high electricity rates and demand charges. Global microgrids are also deployed to meet clean energy goals; they target renewable energy integration and a reduction in carbon footprint, followed by reliability and resiliency. Notably, North American projects focus more on resiliency and reliability, followed by renewable energy integration; this is likely due to the adverse effect of extreme weather events on the electric grid. Business models appear to be moving towards performance contracting (such as Energy Savings Performance Contract) and shared savings models between the host and project developer, in which bill savings and revenue streams from grid services (for example frequency regulation) are split according to investment and risk tolerance.