Microgrids do not rely only on technology innovation, but also on innovative business models. This presentation introduces key business models for microgrids, including standard PPAs, synthetic PPAs, and leasing/rental agreements.

The focus is on discussing select challenges in the due diligence process. These are manifold, ranging from issues regarding project size to electricity valuation and assessment of the portability of a microgrid and its time value. Many remote microgrid projects are rather small and do not allow for costly due diligence. A focus on key factors can disclose many risks. Slimmed-down due diligence processes require thorough experience with microgrids.

In comparison to grid-connected projects, it is rather complex to assess the actual value of the electricity provided by renewable energy generators. For example, in solar-diesel hybrid applications the value of solar power lays in displacing diesel. PV generation and diesel displacement are not always fully proportional. A key area is the valuation of the economic consequences in case the electricity bill cannot be paid anymore. Observations to be made include the rating of portability and time value.

Dr. Thomas Hillig
Managing Director
THEnergy Sustainable Consulting

In 2013, Hillig founded THEnergy, a specialized consultancy that focusses on renewable energy microgrids and remote hybrid power plants for applications such as mining, tourism, telecommunication, agriculture, or rural electrification. Due diligences are a main advisory service. THEnergy combines Hillig's previous experiences working at Alstom Power in conventional energy generation and at Innotech Solar. At the beginning of his career, Hillig consulted leading companies from the transport, telecommunication, and construction sectors.