Creating a Grid-of-Grids: The Genius behind the NY Prize and its Real End Game

Share Button
NY Prize

Credit: André Karwath, Wikimedia Commons

Not everyone sees the NY Prize as a big deal. After all, they say, the end stage of New York’s competition for $40 million is construction of about five community microgrids.

That’s not a world-changing number for a technology likely to underlie a coming grid-of-grids – a nationwide interactive network of distributed energy that will revolutionize the way electricity is owned and consumed in the United States. Nor is it a lot for a state that wants to drive this change.

But look a little deeper at the NY Prize, and it’s hard to miss the genius behind its design, and the likelihood that it will spur far more than the handful of community microgrids that will win the final jackpot in 2018.

NY Prize is not an old-school subsidy program — it is not underwriting technology until it can stand on its own. Nor is it research and development money.

“We’re not looking for science projects. These need to be designed so that there is a survivable business case,” said Micah Kotch, NY Prize director, during a recent interview. “It is an exercise in market animation.”

“Market animation” has become the catch-phrase of New York’s Reforming the Energy Vision (REV), a policy being carefully watched by energy insiders nationwide because of its intent to shift market dominance from centralized technology and ownership to decentralized local energy. It aims to make communities and homeowners key market players in a space now largely monopolized by utilities and large power plants.

The NY Prize is part of REV and carries the same emphasis on setting up rules so that the new market can flourish — creating market animation. While REV focuses on distributed energy in general, the NY Prize focuses on community microgrids in particular.

NY Prize Seeding a Microgrid Market

But what exactly makes the NY Prize a kind of Johnny Appleseed of microgrids in the state? It has to do with how its three-stage competitive structure creates a path to attract private investors.

In the first phase, NYSERDA offered $100,000 awards for communities to conduct microgrid feasibility studies. After an overwhelming response, NY Prize made 83 awards, rather than the expected 25 awards.

Most of these communities will probably receive no further NYSERDA funding. But that doesn’t preclude their projects from moving forward. With feasibiity studies done, their chances are greater of finding private financing. The studies will include cost and site analysis.

And next comes Stage 2 of the competition, expected to begin in November, where communities will vie for $1 million prizes to design their microgrids. And again the approach is clever — it welcomes new applicants, not just those who won feasibility study money. So now, private investors and companies will have insight into an even broader pool of prospects.

Free Resource from Microgrid Knowledge Library

off the electric grid
How to Get Off the Electric Grid, Stabilize Cost & Increase Efficiency
This new report from Mesa Solutios explores how to get off the electric grid, and do it while retaining  and increasing reliability, efficiency, and cost stability. "There’s a lot to unpack here, but I don’t mind unpacking it...", says Thomas Poteet, VP, corporate development, at Mesa Solutions.
We always respect your privacy and we never sell or rent our list to third parties. By downloading this White Paper you are agreeing to our terms of service. You can opt out at any time.

Get this PDF emailed to you.

“We think by funding feasibility and by funding design we are going to help identify where these good projects can actually be found. The third-party capital will find the right projects,” Kotch said.

In the final and third stage, winners will receive up to $5 million to put toward microgrid construction. But in truth, both winners and losers, could attract a lot more private backing along the way.

NY Prize

Map of 83 Communities that won Stage 1 funding in the NY Prize, courtesy of NYSERDA


Private Players See Value

It remains to be seen if the NY Prize will enliven markets — but it certainly is enlivening market players. Teams of private companies are in New York assisting communities with their early planning. Many significant microgrid players — among them Anbaric, GE, IPERC, NRG Energy, S&C Electric, Schneider Electric and Siemens — are helping not just one but multiple communities.

“We’re really excited to be involved in several projects for the NY Prize. I think it’s groundbreaking. What’s really different about this is the planning that went into this by NYSERDA,” said Philip Barton, director of microgrids and distributed energy resource management at Schneider Electric.

In particular, Barton said, NY Prize leadership had the foresight to involve the state’s seven investor-owned utilities and identify trouble spots on their systems that might benefit from community microgrids and distributed energy. This makes the competition a win for utilities, rather than a potential competitive threat.

The NY Prize has a side benefit too, according to Kotch.  Communities will take a close look at their energy systems as they undertake the feasibility studies. This will illuminate opportunities for energy efficiency and distributed energy, he said.

Moreover, the program is going to generate a vast amount of data. By February, when communities finish the feasibility studies, New York will be the custodian of more data on microgrids than anywhere else in the world, Kotch said.

How will New York use that data?

“We’re going to want to look to look for patterns. We think there are mechanisms where we can use that data to inform changing regulations and policy. We think there are important metrics to be tracked around the potential for job creation, the potential for emissions reduction and the potential for systems efficiency,” Kotch said.

NY Prize End Game

It remains to be seen how many microgrids New York will produce. But all indications are that there will be many. And lessons learned in New York are likely to influence development elsewhere.

Kotch described the quality of the microgrid projects offered by communities so far as “tremendous.”

“But it is a competition and it is going to be a really difficult decision regarding the projects that move from feasibility to design, I would fully expect, though, that there will be some projects that move forward on their own and I think that is fantastic,” Kotch said.

So distributing the final money in 2018 may mark the end stage for the NY Prize, but clearly not the competition’s end game.

Track progress of the NY Prize by subscribing to the Microgrid Knowledge newsletter. It’s free.

Share Button

About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.


  1. […] commercial-scale microgrids that attract outside investment through its NY Prize. In a recent interview with, NY Prize Director Micah Kotch summed up New York’s approach by […]

  2. […] More information about Smart Cities Week is available here. A video about the Oncor microgrid is here. Read our recent article about the NY Prize here. […]

  3. […] Vision (REV) — the creation of a market-based distributed grid — and its accompanying NY Prize, a state competition that will provide $40 million for new […]

  4. […] 6. Creating a Grid-of-Grids: The Genius behind the NY Prize and its Real End Game […]

  5. […] demonstration projects and distributed energy programs. For microgrids, the most pertinent is the NY Prize, a $40 million competition to encourage development of community […]

  6. […] when it is configured into a microgrid. Several of the 83 microgrids vying for separate NY Prize funding include […]

  7. […] hundreds of its communities exploring microgrids — and the $40 million NY Prize in full swing — all eyes are on New York. Major energy and infrastructure companies have arrived. […]

  8. […] past year, Hitachi already is working on several North America microgrid projects, among them 11 NY Prize projects and 13-15 microgrids in […]

  9. […] is reviewing NY Prize projects in a three-stage process. In the first phase, the selection committee approved up to $100,000 in […]

  10. […] will further unlock benefits of grid modernization. Two states to watch are New York with its Reforming the Energy Vision (REV) initiative and Massachusetts with its Department of Public Utilities’ order for utility grid […]