The Eakon Group of Companies operates in construction (MEP and ACMV-R), Renewable Energy (Solar Solutions), education (Technical Vocational Academy), and Agriculture Durian trading. This diverse focus enables the group to drive industry impact and support sustainable development. Contact online >>
The Eakon Group of Companies operates in construction (MEP and ACMV-R), Renewable Energy (Solar Solutions), education (Technical Vocational Academy), and Agriculture Durian trading. This diverse focus enables the group to drive industry impact and support sustainable development.
The building is the control center for a small, two-year-old power-generating facility that provides electricity to the approximately 200 people in the village. Computers manage power coming from the solar panels and from diesel generators, storing some of it in large lead-acid batteries and dispatching the rest to meet the growing local demand. Before the tiny plant was installed, the village had no access to reliable electricity, though a few families had small diesel generators. Now all the residents have virtually unlimited power 24 hours a day.
Optimal Power Solutions (OPS), the Australian company that designed the microgrid at Batu Laut, is doubling its installations this year throughout Southeast Asia and India. And several other companies, including industrial giants like GE and ABB, are developing and selling similar technology (see "Microgrid Keeps the Power Local, Cheap, and Reliable").
The reality, however, is far more complicated. Some early microgrids have run into problems, and the electricity they provide is more expensive than that from central power grids in the city—in some cases nearly 10 times as expensive. The technology involved in microgrids, and the systems used to operate and maintain them, will need to improve significantly if they are to bring reliable power to hundreds of millions of people.
"The forecast by the International Energy Agency and other groups is that in 20 years, we''ll still have a billion and a half people without electricity," says Daniel Kammen, a professor of energy at the University of California, Berkeley, and an advisor for the United Nations'' Sustainable Energy for All program. "Microgrids provide an opportunity to think about a really new model of how to bring energy services to off-grid communities. The question is, will this just be a cute development thing? Or will it become part of mainstream economics?"
Delivering that energy will require some alternative to the conventional grid technology: the IEA estimates that more than two-thirds of rural dwellers who lack electricity today will need power from some sort of distributed source, either microgrids or stand-alone power systems for individual households, because they are far away from the grid or live in a geographically inaccessible area (see "In the Developing World, Solar Is Cheaper than Fossil Fuels").
Baba says the government is likely to meet its goal of bringing electricity to 95 percent of the population in Malaysian Borneo by the end of the year (at the start of the project two years ago, 25 percent of that population had no electricity). The technology''s success so far has led the government to up the ante. In a bid to bring power to even harder-to-reach areas and electrify 99 percent of Malaysian Borneo, it''s planning to increase microgrid installations by 2015.
Located in a remote part of northeast Borneo, not far from a deep, cliff-obscured basin that wasn''t discovered by outsiders until the 1950s, the village of Kalabakan had no proper paved road until a few years ago, and residents made do with a couple of hours of electricity at night. Three years ago, the Malaysian government funded a microgrid there, and power demand skyrocketed; new customers include a pair of sawmills that service the local logging industry. Unlike its slightly newer counterpart in Batu Laut, however, the microgrid in Kalabakan is already returning to the jungle.
Worse, half the microgrid isn''t even getting power. Because the output of its diesel generators wasn''t synchronized, only one generator can run at a time, and one can''t provide enough electricity to power both of the distribution networks that deliver electricity. Lutchman didn''t know about the problem because, days before, local workers had disconnected the data hub that was the only communication link between the microgrid and OPS. The workers were using it to surf the Web, something Lutchman learned about only when OPS got a large bill.
The trouble at Kalabakan reflects a deeper problem: there is no practical model in place for maintaining and operating a microgrid. The government pays for the system; companies such as OPS design it, install it, and keep it working during a two-year warranty period; and then, in the case of Malaysia, they turn over control to the local utility, which is what happened at Kalabakan. While OPS still monitors the microgrids it has installed, after the first two years it is no longer paid to maintain them.
Unlike its slightly newer counterpart in Batu Laut, the microgrid in Kalabakan is already returning to the jungle. Tropical growth is nearly as high as one solar array; in one place it is starting to block the sun.
The World Bank recently issued a report that warns of some of the challenges. Pepukaye Bardouille, a senior operations officer at the agency''s International Finance Corporation, says her group is "excited" about microgrids, but they''re "trying to inject a dose of realism." Bardouille explains, "What tends to happen is a few examples are touted as a solution on the basis of technology or just cost. But ways to deliver the technology and maintain it are actually so much a part of the solution that if those things aren''t dealt with, it''s just not sustainable."
Ramdan Baba says his government is working on a new way to fund and maintain microgrids. The company that designs and installs the technology will be given a license to operate it and receive a guaranteed price for the power it produces; it will make a profit only if it can keep costs under control and keep the grid producing power for the length of the contract.
This summer at OPS''s Malaysia headquarters in Kuala Lumpur, the company''s engineers and managers were busy with phone calls, meetings with government officials, and last-minute calculations. The key issue was estimating the cost per kilowatt-hour of the electricity the microgrid produced, which would be key to establishing the price OPS and other companies would get paid. Too high and OPS would reap a windfall at the expense of the Malaysian government; too low and the company would be stuck maintaining a money-losing operation.
Microgrids face another looming problem, this one technical. Solar panels and diesel generators can last for decades, but the batteries that make them possible fail much more quickly. "With a microgrid, you typically need an energy storage system that, with current technology, you have to replace every three or five or seven years. That''s a huge capital cost," says Katherine Steel, an MIT-trained engineer who heads the World Bank''s Lighting Africa program. If replacement batteries are not in the budget, the effective lifetime of the microgrid is limited to only a few years.
The savings from cutting diesel consumption could be significant. The microgrid at Batu Laut is designed to get much of its power from diesel, but a system designed around cheaper batteries might need generators only for emergencies and long stretches of bad weather. Reducing battery costs and diesel consumption could lower the cost per kilowatt-hour from a dollar to as little as 40 cents.
Yet even that is higher than the price of electricity from the grid. The Malaysian government subsidizes microgrid electricity so that villagers pay something comparable to city rates, but it can''t keep doing that forever, in part because with each additional kilowatt-hour villagers consume, the cost of the subsidies goes up. In poorer countries like India, the high cost of microgrid power could be an even bigger obstacle to widespread deployment.
"For microgrids to be a leapfrogging technology like cell phones, they would have to offer equivalent or superior service to the grid at a lower cost," Steel says. "But I think that''s a transition that still needs to take place, and I wouldn''t say that''s immediately around the corner."
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