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by Jeff St. John
April 25, 2019

Let’s consider the diesel generator, the workhorse of the edgiest of the power grid’s edge environments.

From truly off-grid applications like islands or remote mining and drilling operations, to backup on-site power for data centers, factories or cold storage facilities, diesel generators — as well as their cleaner, yet still carbon-emitting, natural-gas-fired cousins — represent terawatts of generation capacity across the globe.

But over the past decade, solar PV prices have fallen below the cost of shipping and burning diesel to generate electricity at remote sites, and this gap is only growing.

Likewise, megawatt-scale batteries are falling in price — not enough to justify replacing generators entirely, but certainly to help store solar energy for later use, buffer the ups and downs in electricity demand that force generators to run inefficiently or risk power quality problems, and otherwise shave the biggest cost of any generator over its lifespan: how much fuel it consumes.

This explains the big push into "hybrid" generator systems, or generators prepackaged with the power electronics, connections and control platform to integrate solar, batteries and other inverter-based DERs. Using a combination of technologies developed in-house, provided by partners, or gained through acquisitions, global generator giants like Caterpillar, Aggreko, Wärtsilä and Cummins are increasingly integrating these systems in different ways and for different key markets.

While the main markets for these systems remains islands and off-grid mining and industrial sites, they’re also finding their way into on-grid applications. Generators can be used to mitigate demand charges or arbitrage against grid power, or by municipal and cooperative utilities to shave their peak power consumption and reduce capacity charges.

Adding batteries to the mix could allow a system to react instantaneously to on-site power disturbances, or to bid their power into fast-response grid frequency regulation or spinning reserves markets.

Both off-grid and on-grid markets are the target for Finnish engine maker Wärtsilä, which earlier this month unveiled its Engine+ Hybrid Energy solution. 

While the systems are primarily meant to lower the operating cost and improve flexibility of the engine itself, Wärtsilä is also targeting countries with rapid renewable energy growth as key markets for its batteries, generators and integrated systems, as Andy Tang, vice president of the company’s Energy Storage, Solar and Integration division, pointed out in a recent interview.

“The announcement of Wärtsilä’s new line of hybrid energy storage and fossil generators is an important addition to an ongoing trend of generator manufacturers seeking to integrate storage and advanced controls as they start to have to interact with other DERs,” Isaac Maze-Rothstein, research associate with Wood Mackenzie Power & Renewables, said in an interview this week.