What comes after microgrids? Energy parks based around wind, solar and storage

The benefits of microgrids operating synergistically with the macro-grid have been well documented.

In the meantime, an increasing number of solar and wind projects are now built as hybrid plants with storage while many completed renewable projects await to be connected to the transmission network.

A new report by Eric Gimon, Mark Ahlstromb, and Mike O’Boyle of Energy Innovation explains that the same fundamentals are driving interest in energy parks, where multiple renewable energy sources and storage are co-located with customer loads such as manufacturing facilities or data centers and connected to the grid at a single point of interconnection (POI).

The rising electricity demand for data centers improves the economics of incorporating them into integrated energy parks.

The report refers to one such energy park developed by Intersect Power in 2023 to produce hydrogen from wind and solar resources while taking advantage of the 2022 Inflation Reduction Act (IRA) tax incentives.

The project consisted of 400 MW of electrolyzers with 460 MW of on-site wind and 340 MW of solar generation. It serves as an example for how large electricity consumers could leverage similar benefits – speed, direct access, shared infrastructure, and credit for clean energy – in an integrated “energy park.”

Writing in the report’s executive summary, the authors point out that:

“As wind and solar power costs continue falling alongside cost declines in battery energy storage systems, these clean energy resources are attracting retail customers and wholesale loads that are willing to assume additional costs, risks and responsibilities that have traditionally been addressed by existing markets and utilities in return for getting faster and cheaper access to clean energy.

“For large flexible consumers energy parks remove barriers to efficiently accessing the low-cost power they need and the clean energy they demand. “

The report explores the potential advantages of energy parks to better coordinate with the grid.

“Energy parks provide faster access to clean energy for power consumers, but if they fully defect from the grid, they leave significant benefits on the table.”

“For example, a wind-solar- hydrogen project without any grid connection will sometimes curtail energy generation that could otherwise flow onto the grid to meet other demands, and a flexible load could ramp down to provide more power to the grid in response to grid needs.

“An isolated project may make economic sense on its own but could be even more valuable and less risky to potential financiers if it were interconnected with the grid.”

To make energy parks commercially attractive, however, requires changes to market rules and regulation for how resources participate in those markets.

“Today, the grid functions under a traditional operating paradigm that centralizes control and dispatch of generators as a response to load.

“This approach evolved naturally from the days of having a few large generators (coal, hydro, nuclear, etc.), but the usefulness of this paradigm is evaporating as wind, solar, demand flexibility, and storage become the lowest-cost resources in a ow-carbon future.”

“While renewable resources are variable and storage is energy-limited, they are also digitally controllable and can respond to grid needs more quickly and accurately than existing generators.

“New market rules can encourage and fairly value these benefits, while explicitly determining which services can complement them. Properly integrated into electricity markets, energy parks can become even more versatile and flexible resources that can provide a wide range of services benefitting the grid.”

The authors note that energy parks can improve the performance of hybrid projects. For instance, solar power plants increase their inverter-loading ratios to provide additional services to the grid, and renewable + storage hybrids can benefit by adding dedicated storage behind a single point of interconnection (POI).

Even more complex arrangements are now emerging, including multiple utility-scale resources bundled together, facilities with thermal storage or hydrogen.

Energy parks are modular, able to accommodate storage, load, and generation behind a single POI to optimize the needs of both the on-site load and the grid while achieving multiple benefits by building on what hybrid resources already have proven including:

▪ By directly connecting load and generation to the same grid interface, such as sharing the samesingle-directional or bi-directional high-voltage transformer energy parks can significantly reduce infrastructure costs;

▪ Investors and clean energy developers can improve project viability by optimizing generation, load and storage; and

▪ Energy parks can gain from their inherent modularity by adding different components to the as market and project needs evolve.

The report details the policies that can help lay the foundation for an electricity system that encourages and fairly values energy parks that co-locate load, variable renewables, storage technologies, and whatever comes next.