Regional and global market trends are constantly changing. Energy demand has been steadily rising due to globalisation; in Southeast Asia, electricity demand is projected to grow by more than 65% in the next two decades, yet, electrification remains a major problem for most countries. Added to this are digitalisation efforts that require higher data volume and energy need for services. When you further extend the picture, there’s the call for decarbonisation and energy transition to ensure sustainability in providing better access to reliable and secure electricity.
New approaches to address these trends
One such possible solution may be the adoption of microgrid technologies. Self-contained power networks that can function independently, microgrids or mini-grids are decentralised energy systems able to combine renewable energy generation, conventional energy generation, and energy storage to satisfy a given load. There is general confidence in the promise of microgrids as a viable solution to achieving 100% electrification in Southeast Asia while at the same time supporting digitalisation and energy transition amidst growing energy demand.
About 65 million Southeast Asians do not have access to electricity whether because of geographical or economic reasons or both. People in some remote areas cannot access power because power grids are located far from their homes and connecting to those grids would be economically impractical for the grid owner.
The International Energy Agency (IEA) recognises the role microgrid technology will play in electrification discourse across the globe, citing existing diesel microgrids that could be integrated with renewables and new microgrids that would ideally resist the use of any fossil fuel. In Myanmar, where 60% of the population still lacks access to electricity, renewable energy minigrids and microgrids are viewed as a welcome solution, says Alakesh Chetia, CEO at Yoma Micro Power. He adds that the use of microgrids can reduce the country’s reliance on diesel generators and power areas not reached by the current transmission and distribution system. In remote areas, “off-grid” versions, those that do not rely on the main utility grid to provide power to its network of electricity users are used.
Meanwhile, there are concerns about the electrical infrastructure in the region, aging infrastructure is more susceptible to power outages caused by instances such as extreme weather conditions. Microgrid technology can resolve this concern, since they can disconnect critical assets from the main grid allowing them to provide secure power despite an outage from extreme weather. Further, considering microgrids have storage abilities and employ several energy systems, such as renewables and fossil fuels, they have enough supply of electricity even when the main utility grid encounters a problem.
Microgrid technology, in essence, can potentially provide much-needed electricity access even to remote areas in Southeast Asia while at the same time ensuring a resilient energy source notwithstanding the region’s vulnerability to natural disasters. Thus far, Indonesia, Thailand, and the Philippines, have existing mini-grids and microgrids to power island communities. It’s about time Southeast Asia optimises its renewable energy sources like biomass, hydro, wind, geothermal, and solar. Microgrids are able to provide decentralised power generation from clean energy sources like wind, hydropower, and solar, therefore, can tackle the energy challenges from using renewables, asserts Vidal Fernandez, Director of Big Data and Artificial Intelligence – Innovation at CLP Group. Even though these renewables are intermittent sources, microgrids are flexible enough to secure energy supply with the use of different energy storage technologies, particularly Lithium-ion (Li-ion) batteries and hydrogen as storage.
Achal Sondhi, Market Director for Asia Pacific (APAC) at Fluence Energy, a Siemens and AES Company and a leading energy storage system integrator, holds high confidence in the “critical role of energy storage systems in keeping microgrids balanced and able to shift power to different periods in a day.” With the use of storage, microgrids can smooth out demand by using renewables when they are available, for instance when the sun is shining or the wind is blowing, and storing the excess energy in batteries. Batteries, specifically Li-ion batteries, are perceived as the best energy storage technologies for microgrids due to their flexibility and ability to store from minutes to multiple hours and from few kW to multiple MWs. In fact, Steven Goldman, APAC Regional Marketing Manager, also at Fluence, projects that the general future of microgrid technology lies on Li-ion batteries “due to their inherent property to be fast responders.” The commercialisation of the industry, in line with the expansion of the electric vehicles market, has also helped reduce the cost of these batteries, thereby, adding to their attractiveness as the technology choice for energy storage systems. However, battery capacity can deteriorate over time, so long-term storage is still a challenge.
This is where hydrogen comes in. Seen as another vital introduction to microgrid technology to solve the problem of long-term storage, hydrogen can make 100%-green power generation possible. The system works as follows: Excess energy from renewables is transformed into hydrogen through electrolysis, and excess hydrogen is stored for use when there is a high demand but low energy supply. A hydrogen storage system acts as a power generator for the microgrid technology, thereby, ensuring total power independence. This has already been tried in Thailand’s Nongooch Tropical Botanical Gardens and Phi Suea House, wherein hydrogen is installed as the energy storage solution for the microgrid. The system is able to provide 35 hours of energy storage.
The outlook for microgrid technology’s role to realise a more sustainable, reliable, and secure energy for all in Southeast Asia is filled with optimism. Although it will depend on the “peculiarities of each country”, as observed by Fernandez, “the energy market is very dynamic just as energy prices are”, which could pose a tremendous potential to enable microgrid technologies to be developed in the region.
However, its adoption as a new approach to addressing the growing energy demand in the region could be hindered by several market drivers. Legislation and regulation have to nod towards the use of storage. If anything, supportive market environments are always welcome opportunities for these new technologies. Likewise, renewable energy sources need to be maximised and dispatched with hybrid energy systems. Lastly, the cost associated with energy storage can be quite a concern for developers, thus, needs to be lowered to boost the number of installations. Chetia further notes that microgrid companies require a business model that could be “funded by institutional or commercial capital” for the technology to have a meaningful impact on a large scale.
Nonetheless, microgrids are sure to bring the region closer to providing electricity access to everyone and at the same time fulfil the goal for a zero-carbon energy future.