Clean Power Plan or Not, More Renewables Will Move Along Microgrids

The microgrid is to environmental management what the electric car is to automotive development. It’s the newest thing that is much more than a fad.

Microgrids are localized grids that better ensure reliability to corporate campuses. Capable of either working when the central network goes down or as a full-time distributor of electrons, they most often are used in combination with renewables or natural gas generated at the place of consumption. If battery storage becomes widespread, they would be even more effective — tools to allow such enterprises to store electrons and to release later on when they would be needed.

Why are these innovations taking off? In a piece she penned for the IEEE Smart Grid newsletter, Sally Jacquemin of Siemens Digital Grid says that there are three main reasons: First, onsite generation that uses green energy or natural gas have “jump started” the innovation, she says.

Second, the need to be always-on and avoid power outages means that microgrids are a necessity for many operations. Third, they are great energy savers, enabling companies to reduce their lighting and cooling costs — or those associated with managing buildings.

Siemens is partnering with a Native American reservation, Humboldt University and PG&E Corp. to build a community microgrid in Northern California that runs on solar panels, biomass and diesel generators, in combination with battery storage. The microgrid will service a 100-acre territory.

Who is building microgrids? Because it is the hottest thing, it’s everyone from the traditional utilities to the tech-savvy businesses: PG&E Corp. and Sempra on the utility side and SolarCity Corp. on the non-traditional side.

Building the microgrids is one function — one needed to increase revenues at a time when the pie is getting sliced in multiple pieces. But companies are running microgrids because it has market value, on a number of levels. Consumers want to buy from companies that have green brands. But the companies want to implement the enclosed grids because it increases reliability.

“Any project that adds decentralized energy resources such as solar and battery easily realizes an extremely attractive return on investment for this advanced control technology,” writes Siemens’ Jacquemin. It is perhaps as much as $200,000 or $300,000 a year.

Will microgrids endure? It’s early yet but the signals are that it is good for business — both for those building the networks and for those businesses implementing them. To the extent that markets put a premium on green energies and electricity reliability, their use will expand.