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Times & Trends: Why Microgrids May Power Real Change

Dec. 16, 2014
Why Microgrids May Power Real Change As electric utilities scramble to update the aging U.S. electrical grid, microgrids will be an important piece of the power puzzle.

The recent news story that downtown Detroit lost power for the better part of a day because of a faulty electrical cable in an decrepit electrical system is the latest  example of just how vulnerable the U.S. electrical grid is to outages.

Providence, R.I.,  recently lost power because a curious squirreling exploring a conduit carrying power cables shorted out the system. Many of us remember the mothers of all recent power failures, the 2003 Northeast Blackout, when 50 million customers lost power, and the 1977 blackout that knocked out power to New York for four days.

The April 2013 attack on a utility substation that supplies power to San Jose, Calif., didn’t cause a blackout because PG&E personnel rerouted power around the substation and fed more power to the area from other power companies. But the rifle shots that damaged 17 transformers and knocked out the substation for 27 days of repairs highlighted security concerns surrounding the grid.

Many utility experts believe microgrids will be part of the answer.  Microgrids are basically local power plants utilizing natural gas, cogeneration, renewables or other energy sources. While they will never replace the U.S. electrical grid in its entirety, they are already quite popular. Navigant Research says more than 400 of them are now being built and that the global market for microgrids will top $40 billion by 2020. Current applications now include military applications that need an independent power supply off the main grid; remote geographic locations far off the grid; and commercial, industrial or institutional applications that want their own power supply.

Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission (FERC) is now co-chair of the energy team at Stoel Rives, a California-based law firm that represent clients in solar, demand response and building energy management issues. He was a panelist at the recent NEMA annual conference, and during the panel discussion, “Grid Connected Buildings and the Future of Smart Cities,” voiced his support of microgrids as an import tool in the renovation of the U.S. electrical grid.

He also thinks microgrids are part of the solution to security concerns. In a report published by GreenBiz on its VERGE Conference this October, he said the grid is “in miserable condition from the standpoint of physical security overall.” In that GreenBiz article he said, “Microgrids ultimately are where we need to move, to a distributed type of system, if we are ever to put out a defensible system that, in fact, can be sufficiently secure to provide us the level of reliability we all need for our businesses and homes.”

NEMA is putting its lobbying muscle behind microgrids. In July,  the association  published a report , “Modernizing America’s Electric Grid  -  Solutions for Transmission, Storage, Distribution & Resilience,” and sent its recommendations to legislators on Capitol Hill  for their consideration as they conduct  the first phase of the President’s Quadrennial (every four years) Energy Review.

Regarding microgrids, the report said in part, “A microgrid’s multiple generation sources (solar, wind, gas, combined heat and power), and ability to isolate itself from the larger network during an outage on the central grid ensures highly resilient and reliable power.

“Microgrids enable basic life services to continue in the event of a prolonged outage. In combination with energy storage, microgrids can provide ancillary services to the broader electric grid, such as voltage and frequency regulation. Microgrids also reduce dependence on long distance transmission lines, reducing transmission energy losses.  Microgrids and energy storage can be incentivized through removing regulatory obstacles; R&D spending; grants and loan guarantees; agency procurement; and encouraging private financing.”

NEMA’s report offers some sound advice to legislators on ensuring a more dependable power supply, and we applaud the association’s efforts for representing the electrical industry’s energy interests in Washington, D.C.