This is the seventh post in a series of blogs focused on the preliminary output of a study on “Liquid natural gas (LNG)-based distributed power and grids” funded by DNV’s cutting-edge innovation program.

In my previous blog, I discussed challenges and issues, using some examples we investigated in Indonesia. In this blog I will discuss briefly the challenges and issues per item.

High capital cost of distributed and renewable power generation systems (based on fossil fuels) is the first issue. This is evident because of the absence of economies of scale in the manufacturing, supply, performance, and operation and maintenance of these systems. This is further compounded by the additional costs of supplying technologies and fuels to remote, off-grid locations; and the need for additional technologies, such as expensive fuel and electricity storage systems (in the case of photovoltaic distributed generation), to ensure reliable and good quality power output.

Microgrid management and control to match and balance power generation and demand; where one has to produce reliable and good power quality, especially in islanded mode. Without a strong grid to balance fluctuations in supply and demand, and enhance reliability, microgrid electrical performance with today’s technology tends to be poorer than that of conventional centralized grids.

Inadequate design tools and expertise to match desired system performance requirements with optimal system planning and design is another issue. As a result, implemented systems are either inadequate to meet desired performance, or have expensive and unnecessary redundancies and over-capacities.

Absence of adequate regulations, codes and standards, thereby reducing the availability and compatibility of equipment and technologies—and creating uncertainties with regards to meeting existing and proposed regulations or codes particularly in areas related to safety, protection, reliability and quality. Although standards development efforts are ongoing it will still take some time to be agreed on and adopted widely.

Market and pricing issues also have to be addressed, because off-grid and islanded smart microgrids do not enjoy economies of scale if fuels have to be imported for power generation. They are essentially monopolies that will not have access to the sophisticated market, and pricing systems that are increasingly the norm for purchasing power from centralized grids.

A particular important and challenging area relates to smart microgrid management and control. It includes efforts to develop better data acquisition, load and resource forecasting, monitoring, control, smart metering, protection, and diagnostic/prognostic functions through a variety of centralized, decentralized, and multi-agent approaches. These functional improvements must be made without compromising system and communications security.

In southeast Asia, it is also important to ensure that technologies developed can be utilized effectively and competitively in the region. An effort worth mentioning is the development of the Experimental Power Grid Centre in Singapore, under the Agency for Science, Technology & Research. With our access to the first live demonstration site PowerMatching City (video and text) in the Netherlands, the Smart Grid Interoperability Laboratory (video and text) in the United States, and the Flex Power Grid Laboratory (video and text) in the Netherlands, we face the challenges and issues in the field of Smart Grids every day.

In my next blog, I will inform you about a case study in Indonesia, where the government develops plans for an increased use of their own energy sources like LNG, and how to realize this in the southeast.

By: Dr. Sanjay C. Kuttan, managing director, DNV’s Clean Technology Centre, Singapore

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View the previous posts in this series:
Liquid natural gas for distributed power generation and microgrid systems
An introduction to the use of liquid natural gas in Smart Grids
Why choose liquid natural gas for the development of Smart Grid? (Part 1)
Why choose liquid natural gas for the development of Smart Grid? (Part 2)
The role of liquid natural gas in distributed power generation in Smart Grid
Challenges and issues for liquid natural gas in distributed power generation in Smart Grid (Part 1)