To Thrive, Microgrids Must Help the Macrogrid

microgridTo thrive, localized microgrids and any distributed — or onsite — energy resources (DERs) that they support must provide value to the established energy infrastructure as well as to its local customers. They also must come down in price, says Dirk van Ouwerkerk, the partner for microgrids at Anbaric Transmission.

Microgrids are small grids that are parallel to the legacy grid serving a particular area. They can remain independent and replace the grid for the buildings it servers, act in a standby mode and kick into action if there is a blackout and/or supplement the macrogrid to offer load reduction and resiliency. DERs are assets — such as geothermal and solar power installations — that power to the microgrid. Batteries often are part of a microgrid. They allow brought by the DERs to be saved (sometimes quite literally) for a rainy day.

Few people argue the value of microgrids. They take the edge off spikes, moderate costs, provide resiliency and, when fed by renewables, are environmentally attractive. That’s all true—but its all on the consumer side. To thrive they must create benefits beyond those directly connected to them. A microgrid would create this broader value if, for instance, it came online to reduce pressure on the macrogrid that is experiencing a usage spike elsewhere.

That’s easier said than done, however. Significant development is necessary to enable the microgrid and DERs to fluidly reciprocate and be an asset to the larger energy supply infrastructure.

The second element of microgrids — which are mainly being used by hospitals, chipmakers and the military — that must change is more straight forward: They must become cheaper. “The costs are so high that more than half of DER projects are cancelled,” he said. “The cost to bring them to fruition is too much.”

The concept of microgrids is attractive. People – including building owners and energy managers as well as private citizens – like them. As demand for energy grows, they will more often become the first choice compared to centralized power plants. Such a facility, Ouwerkerk points out, requires big plots of land and often generate resistance in the community where it is located. Microgrids also take a long time to build and often are far away from where the energy will be consumed. Conversely, microgrids and DERs can more easily be “hidden” in basements and on roofs.

Thus, the challenge at hand is fitting DERs into the overall power infrastructure. “If we continue to maintain a grid that can’t really harvest these distributed energy resources, we’ve got a problem because what the customers want they are not going to get,” Ouwerkerk said. “So the challenge is big but the rewards are big. If we can solve the problem we can really change how the grid is set up.”

The first step toward reaching an equilibrium between the needs of the grid and those using microgrids and DERs is treating each deployment uniquely. That isn’t happening today. “The main thing that has to happen is that planning becomes local again,” Ouwerkerk said. “Currently, every single resource is developed in a silo with no regard to what is already there and what is being developed. That is not the best way to develop these things.”

Instead, he says, DERs should be developed within a framework. Various DER resource should be developed in a coordinated way. That will enable the designers to build reduce system weakness and build on each elements’ strengths, Ouwerker said.

There are two other ways in which the microgrid world must grow. In the macrogrid world, controls are centralized and no real time. Both of these elements must change. The new infrastructure must be outfitted to be responsive and react to the needs of the macrogrid. “Controls need to see what is happening, forecasts, control things remotely and model them in real time. In other words, for the decentralized model to be truly effective, the DERs must be able to play a meaningful role in the world beyond the local installation.

The other element that must change is that microgrids must get a seat at the table. Regulatory and policies must change in a way that gives microgrids the same access to capital as legacy grids. “Microgrids are expensive,” Ouwerkerk said. “They need the funding available to the big grids. “Somebody needs to give a revenue stream to migrogrids for its grid value, not just the customer value.”

This, he said, is happening in beginning to happen in New York and California. He said that Anbaric has responded to a request for proposals for a project on the South Fork of Long Island, N.Y. and plans to bid on one in Rockaway, N.Y. Rockaway, part of the New York City borough of Queens, is physically on Long Island.

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