EDITOR'S NOTE: Sharon Allan, who recently became president and CEO of the Smart Grid Interoperability Panel, wrote this commentary on the growing role of microgrids at the request of The Energy Times. Many of its themes will be explored in a landmark industry conference, Empowering Customers & Cities, in Chicago November 4-6.
Trees don’t topple without cause, and power lines don’t fall down on their own. They’re felled by forces, generally those created by weather. When researchers at the Lawrence Berkeley National Lab analyzed the DOE database of grid disturbances, they found that 66 percent of the reported outages between 1992 and 2010 stemmed from some form of weather-related circumstance.
What is really eye-popping is how grid events related to weather have increased over the past 20 years. According to a Congressional Research Service report titled Weather-Related Power Outages and Electric System Resiliency, fewer than 20 such events hit annually during the early 1990s. But, the numbers have been rising steadily. In 2011, nearly 140 extreme weather events knocked out some part of our bulk power system.
Given these numbers, we observe some utilities looking at microgrids, which managers at ComEd have called the Building Blocks of Smart Cities. Wikipedia defines a smart city as one that uses “information and communication technologies to enhance quality and performance of urban services,” as well as “to reduce costs and resource consumption.”
I’d say keeping the lights on is certainly a way to enhance the quality and performance of urban services. Microgrids are the technology that, during the widespread outages caused by Super Storm Sandy, kept the lights on for institutions with co-generation, including New York University and Princeton University.
Last year, when news site Utility Dive surveyed 250 utility executives, 97 percent said they believed microgrids eventually could be profitable for utilities, but only 59 percent of respondents had plans for utility-owned microgrids underway, and only 55 percent said there were microgrids operating in their service territory.
Of the 45 percent who said microgrids were running in their area, 72 percent of those microgrids were owned by a non-utility entity. Why? Well, maybe it’s because 85 percent of survey respondents said utilities are not currently given regulatory incentive to develop microgrids themselves. Yet, 84 percent said their regulatory model should change so that utilities would be rewarded for developing or owning microgrid technology.
There have been a plenty of news stories about what the enormous threat microgrids pose to utilities. However, the technology also presents tremendous opportunity. Unlike stand-alone distributed energy resources, microgrid operations can be coordinated to support the grid itself by reducing the need for base load capacity that sits idle most of the time. Microgrids also can help power providers with frequency regulation, voltage support and renewables integration. During a crisis, microgrid power might be able to support loads critical to public safety.
In Wisconsin, city planners hope the microgrid powering Milwaukee’s Century City Business Park will add economic stability for the area by making this C&I site more attractive to businesses that might be wooed into relocating within it. That’s important to a city with a poverty rate close to 30 percent.
The advent of microgrids might cause some rethinking of utility business processes around planning, field work, service restoration, and volt/VAR control, but microgrids can serve utilities and communities and residential customers positively. If planned and managed well, microgrids will support the reliability and resilience of the grid.
Sharon Allan is SGIP president and chief executive officer.