Dawn of Microgrids

Smart Grid Killer App

Published In: EnergyBiz Magazine September/October 2013

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Before there was the grid, there was the microgrid.

Electrification in the United States often proceeded from a diesel generator and local distribution in an isolated town to the development of the big utilities and complex grid of generation, transmission and distribution of the 21st century.

Now, however, a convergence of smart grid technology, renewable energy development, and an increasing number of weather-related grid outages is sending us back to the future and a new kind of microgrid.

"Microgrids are the killer app for smart grids," says Terry Mohn, chief executive of General Microgrids, which designs and builds microgrids around the world.

Digital demand management makes it possible to juggle power generated from variable renewable sources like solar and wind, natural gas generation, stored energy and the grid to distribute power and other forms of energy through a local network. 

Strategic energy objectives like developing storage capacity, increasing energy efficiency, and using new tools for demand management and prioritizing loads are all served by microgrid development, Mohn says.

The notion is beginning to take hold across the country, from a pilot project at the University of California at San Diego to a new initiative by the state of Connecticut as a way to improve power reliability and achieve greater penetration of renewable energy sources.

"It is one new element to help power resiliency," says Brad Luyster, who heads ABB's marketing push for microgrid development. "Microgrids are going to explode."

UC San Diego's 42-megawatt microgrid, for instance, has a master controller and optimization system and uses different generator sources - photovoltaic solar panels, fuel cells, and natural gas generators - that enable it to cover more than  90 percent of the power requirement at the 1,200-acre campus. The microgrid saves the university some $800,000 a month in energy costs, which means the project returns the $8 million in funding it received from donors every 10 months.

But the dividends could be even greater because the project is a pilot that may help the state more reliably manage peak demand as it increases the renewable component in power generation.

"A microgrid does everything a utility does, but on a much smaller scale," Mohn says.

One of the obstacles to microgrids has been regulatory, which is why Connecticut's initiative to ease development is seen as a positive sign by the industry.

Experts say that utilities have been slow to adopt microgrids because they are a disruptive technology for their current business model. Ultimately, however, it is a utility play because they can complement the grid.

San Diego Gas and Electric, for example, which is involved in the UC San Diego microgrid, is taking the lead on a demonstration project in Borrego Springs, and Duke Energy is working on developing microgrids.

Microgrids can be connected to the grid and run parallel to them, or stand alone, which is called islanding in microgrid jargon. 

Not surprisingly, microgrids able to regulate use of renewable energies are catching on in real islands, such as the U.S. Virgin Islands, where sharp increases in fuel oil prices have caused power prices to skyrocket. 

Developing countries are experimenting with microgrids for rural electrification, leapfrogging past development of a national grid much as cellphones have enabled them to bypass  a landline infrastructure.

In the United States, universities have pioneered the initial research. Princeton's microgrid successfully islanded for two days in the wake of Hurricane Sandy. Data centers, hospitals and other facilities that need to continue  functioning during lengthy power outages are considered prime targets for microgrids.

Individual communities - like the Great Pond Village being built on a brownfield in Windsor, Conn. - can become veritable islands of power when the grid is down, providing key services like fire and police and serving as a staging area for getting the grid back online.

Not least, military bases, which often already  control their own distribution networks, are leading the way in microgrid development.

"Microgrids are a tremendous opportunity for local solutions," says James Newcomb, program  director at the Rocky Mountain Institute, a nonprofit that researches ways to increase renewable energy use. "It is an important frontier both for business models and emerging technologies."

By providing a single point of interconnection between local distributed resources and the macrogrid, Newcomb says, microgrids will play a key role in creating the diversity of resources that will enable large-scale use of renewable energies.

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