Another major utility is on the move advancing a microgrid strategy to build projects beyond its regulated service territory, this one Georgia-based Southern Company.
With assets of $109.7 billion, and 32,000 employees in four states, Southern is one of the largest U.S. electric utilities, ranked as number three for market value. It is pursuing a national microgrid strategy through its subsidiary PowerSecure in partnership with California-based Advanced Microgrid Solutions (AMS).
Southern Co. is one of two major utilities in the Southeast building microgrids competitively beyond its service territory. The other is Duke Energy, which is installing microgrids through its competitive affiliate Duke Energy Renewables. Earlier this year, North Carolina-based Duke announced two marquee microgrid projects, one completed in Boston and the second under development in Maryland. Duke undertook both projects in partnership with Schneider Electric. Duke is ranked as the number two U.S. utility for market value.
Elsewhere, Illinois-based Exelon (sixth in market value) has been pursuing microgrids nationally through its competitive affiliate Constellation, which in April completed a fuel cell microgrid for the city of Hartford. Constellation partnered with Bloom Energy on the project, which won a grant through Connecticut’s microgrid program.
Market observers are watching utility microgrid strategy as the playing field continues to evolve in the new industry. The range of businesses vying for position ranges from international infrastructure companies to U.S. retail energy suppliers to start-up developers.
Southern Company’s entry into the competitive microgrid market stems from its purchase of PowerSecure in February 2016 for $431 million. PowerSecure describes itself as one of the largest developers of distributed energy resources, with 1.5 GW under management.
Going where microgrid economics work
A Southern spokesman said that PowerSecure plans to focus on areas of the country where distributed energy resources are most economically viable. With the intent to build sustainable microgrids, the partnership will use energy storage and various generation resources, designed to customer needs.
In partnering with AMS, Southern joins one of the early innovators in use of battery storage and distributed energy as an aggregated resource. The company creates what it calls hybrid electric buildings, which use batteries to store energy during periods when it is plentiful on the grid. Then when demand rises, the building shifts from grid power to the batteries. The approach is designed to reduce customer costs and create a firm, dispatchable capacity resource for local utilities.
Besides design, engineering and storage, AMS offers a software and analytics platform for asset management. AMS will seek out opportunities to offer various grid services and revenue stacking for customers.
“As Southern Company grows our distributed infrastructure business throughout the country it is important that we continually maximize the value from these assets,” said Thomas Fanning, Southern Company’s chairman, president and CEO “This strategic relationship between PowerSecure and Advanced Microgrid Solutions will uncover new ways for Southern Company to deliver value for energy consumers.”
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