Give the People What They Want: Microgrids

Last week, GE Digital Energy published its Grid Resiliency Survey. The survey echoes the themes of other surveys and whitepapers that point to the same thing:  Americans want greater electric grid reliability.  What’s newsworthy here is that Americans are willing to pay for it. Americans living east of the Mississippi River are nearly three times more likely than those living west of it to experience an electricity outage, and among them, 41% are willing to pay an additional $10 per month to ensure greater electric grid reliability.

You don’t have to be an energy policy expert or power systems engineer to notice the heightened role that electricity plays in everyday life and why Americans are willing to pay more for uptime. The average American has dozens of electrical devices plugged in or permanently wired at any given time. At my home where only my wife and I live, I counted 33 devices, excluding lights. For most of the population right now, when an outage occurs these devices fail to work or provide charge, and the tension grows as the outage time ticks up.

But what potential solutions are there? If the people want reliable electricity, regulators and utilities should enable them to have something they may not even know existed: microgrids. One of the most common definitions of a microgrid is that which the U.S. Department of Energy has adopted:

A group of interconnected loads and distributed energy resources with clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid and can connect and disconnect from the grid to enable it to operate in both grid-connected or island mode.

The key parts of that definition are 1) incorporation of distributed energy resources and 2) the ability to operate in “islanded mode” or operate independently from the utility grid. By and large, electricity is currently generated at central plants, carried through transmission lines, and finally through distribution lines to the consumer in a linear manner. By placing smaller generation assets including wind, geothermal, fuel cells, and diesel/natural gas generators, and solar photovoltaic (PV) panels (the most accessible generation asset at the residential level) at or near the customer, generation becomes distributed. This means that if there is a breakdown in the former linear passage of electricity, the power doesn’t necessarily go out. On-site distributed resources can kick in to fill all or part of the grid’s former supply.

Many critical facilities like the examples below are inherently microgrids, even if they don’t market themselves as such.

  • Hospitals, running equipment that can determine whether someone lives or dies, are configured as microgrids.
  • Data centers, where one minute of downtime can result in millions of dollars of lost sale or loss of control of equipment, are configured as microgrids.
  • Department of Defense facilities, where electrical downtime can jeopardize national security and endanger lives, are configured to operate as microgrids.

The microgrid solution formerly came with a price tag that could be justified for only instances like those above, but finance considerations are changing. Among a host of regulatory hurdles that must change for the broad adoption of microgrids in most jurisdictions is the ability to net meter electricity from a campus or building, and also receive payments for ancillary services to the grid such as frequency regulation, voltage/VAR support, and others. If a microgrid can generate enough of the electricity it consumes and in addition receive payments, the ROI for microgrid construction and the long term benefits become very clear.

The growth of low-cost PV; the emerging energy storage products; and state mandates and incentives for microgrids in CA, CT, MD, NY, MA, and NJ all point to a future of increased adoption of microgrids.

Let’s give the people want they want and use a portion of that $10 per month consumers are willing to pay to increase resiliency to build microgrids.

Ryan Franks is a Technical Program Manager for the National Electrical Manufacturers Association (NEMA) 

Morning Consult