Despite challenges, Duke and Honeywell pursue community microgrids in a big way

The challenges of developing community microgrids can be daunting despite their benefits.

Sometimes it’s hard to engage the community in the idea. Other times, the community is interested but opposes the project if it includes fossil fuel generation. Funding issues stymie some as they struggle with how to express the financial value of resilience. These issues can slow or stop action at the community level.

Despite such roadblocks, Duke Energy Sustainable Solutions (DESS), a nonregulated subsidiary of Duke Energy, and Honeywell Building Technologies are forging ahead with an ambitious plan to offer community microgrids to cities and towns across the US. Under the plan, DESS will provide the generation assets, focusing on clean energy, and Honeywell will supply batteries and controls. At little or no upfront cost, cities could gain “resilience hubs” — critical facilities where a microgrid keeps the power flowing during a power outage on the larger grid.

“We believe our ‘as-a-service’ business model and incorporation of Honeywell’s Smart Cities Platform are two examples of how we can overcome the challenges historically seen in the development of community microgrids,” said Robert Vary, senior vice president of sales and relationship management at DESS. Taking advantage of this partnership, communities will be able to power water distribution plants, wastewater treatment plants and community centers so citizens have access to fresh water and climate-controlled facilities during outages, he said.

The DESS-Honeywell partnership will simplify the deployment of resiliency solutions and reduce the capital cost and operational risk for communities, said Vary.

Working beyond Duke’s service territory

DESS and Honeywell are seeking cities and counties that demonstrate need for resiliency sparked by increases in extreme weather. The partners will serve existing customers of Duke Energy and will also work with cities and counties outside of Duke’s territory, especially those in wholesale energy markets that can provide financial returns for distributed energy resources, Vary said. Duke Energy is one of the largest electric power holding companies in the US with 7.9 million customers in six states.

In regions outside Duke’s territory, if the local utility isn’t interested in participating in the projects, DESS will provide the generation assets, said Matthew Britt, general manager of smart cities and communities for Honeywell Building Technologies. But the local utilities can also use their own assets if they choose. “We will give the right of first refusal to local utilities and will partner with local utilities with our portion of the solution if they are interested in joining us,” he said.

The partnership expects to take advantage of funding provided under President Biden’s infrastructure bill, said Britt.

DESS will own, operate and manage the microgrid assets, including the storage provided by Honeywell, and Honeywell will supply the software. Cities will either buy the Honeywell software or Honeywell will offer it as a service under which the cities won’t have to make upfront payments, said Britt.

Learn more about community microgrids at Microgrid 2022: Microgrids as Climate Heroes June 1-2 in Philadephia, Pennsylvania.

The first projects are expected to be launched in the second half of 2022.

Honeywell sees the relationships it has forged through its City Suite program  —  an internet-of-things enabled command and control platform — helping to bring cities on board, said Britt.

“One of the biggest challenges from a smart city perspective is stakeholder alignment. Everyone has an agenda. Departments often don’t talk to each other, it can be very difficult,” said Britt. However, with Biden’s infrastructure bill, cities see that money is flowing and want to take advantage of the funding. “Leveraging the existing partnerships cities have with utilities has never been more critical,” he said.

Another challenge is the lack of communication among city departments. Honeywell will work toward buy-in from city and community stakeholders, said Britt.

The Honeywell City Suite software will allow cities to gain transparency about the assets in the city’s infrastructure. Often, these assets are managed by different departments, said Britt. Using the software, cities and towns will know where the assets are located, understand the path of storms and be able to identify which assets to deploy during outages.

DESS will integrate generation assets into Honeywell’s City Suite program and deploy the lithium ion batteries from Honeywell. The battery size will depend on the needs of the city. In many cases, the partnership will deploy multiple batteries, said Britt.

The program could be rolled out to residential communities at some point, said Britt.

Hope for community microgrids

Despite the challenges in deploying community microgrids, there’s hope for action at the community level, especially in California. Pacific Gas & Electric (PG&E) is now seeing more opportunity for community microgrids in its service territory following the approval last month by California regulators of an update to a utility tariff.

The California Public Utilities Commission expanded where microgrids that are connected to the utility’s electric distribution system can be built. Before this tariff change, community microgrids could only be deployed in high-fire threat districts, as defined by the commission. But with the change, communities anywhere in the utility’s service area can pursue a microgrid.

One group that has doggedly pursued a community microgrid in California is made up of seniors in Oakmont.

The group originally faced an obstacle common to community microgrids — the so-called “over-the-fence” rule prohibiting microgrids from providing power to adjacent properties. Designed to protect utility franchise territories, the rule has stymied community microgrids throughout the US. But recently the seniors’ project was accepted into PG&E’s Community Microgrid Enablement Program, which will allow the seniors to proceed without worrying about the regulation they believed stood in the way.

Meanwhile, Britt believes more and more municipalities will ditch their diesel generators for microgrids when they see other communities doing so.

“They are much more motivated than they have been in the past,” he said. “We have a robust pipeline of opportunities we are working on right now.”

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