Look Who Likes Microgrids Now: Why and How the Market is Opening to Smaller Facilities

Mark Feasel, Schneider Electric

The change comes, in part, because of a growing public awakening about the vulnerability of the electric grid. Superstorm Sandy in 2012 seemed to open the eyes of energy regulators and policymakers. But it was the drumbeat of climate-related disasters that followed — from Puerto Rico’s grid collapse following Hurricane Maria to the ongoing wildfire-related power shutoffs in California — that left more and more people experiencing the grid’s shortcomings firsthand. 

Simultaneously, we are depending on electricity more and more in our virtually connected world, as Mark Feasel, Schneider Electric’s president of smart grid for North America, pointed out during an interview with Microgrid Knowledge.

“People depend upon communications in a way that they didn’t 10 or 20 years ago. If something as simple as a cell phone tower goes down, you’ve lost your ability sometimes to navigate emergency vehicles,” Feasel said.

Services decentralize

And, at the same time, we’re decentralizing services, making more facilities in need of reliable energy than ever before. Healthcare offers a good example. Hospitals have been installing microgrids, but that’s no longer enough in a world where more and more medical procedures occur in satellite clinics or homebound patients rely on Zoom for appointments with their doctors.

Add to this the pandemic, and electric resilience for smaller, dispersed facilities gains importance as the “idea of decentralizing where people gather” takes hold, Feasel said. 

“In light of COVID, we don’t necessarily think about putting a lot of people in one space. We might think about how to put smaller groups of people distributed in communities.” 

Join Schneider Electric’s Mark Feasel at Microgrid 2021 where he will participate in a featured panel, “Why the Electric Grid is not Enough.”

As a result, resilience is now required in different kinds of environments, Feasel said. Two years ago, society focused on installing microgrids in large spaces — like stadiums — that could act as shelters for large groups of people during disasters. Today, in a time of social distancing, outfitting elementary schools might make more sense. 

Meanwhile, homebound workers find themselves deeply dependent on the Internet — and, therefore, electricity — as the primary source of connection and commerce.

This all means that “very different kinds of solutions are required,” Feasel said.

Journey to reduce risk and complexity

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Schneider has been tracking these trends and crafting strategies in anticipation of the changes. Feasel described this as a journey to reduce risk and complexity so that microgrid customers can more easily embrace the technology’s benefits.

“It’s the story of taking complexity away from [project] sites, moving it to the cloud, moving it to the factory, and using business models like energy as a service to transfer risks, challenges and complexity away from consumers,” he said.

A decade ago, when a customer decided to install a microgrid, it meant “pallets of electrical distribution equipment and inverters and drives and solar panels showing up, breakers showing up, integrated on-site. It can be intrusive to the site, but that was the means we had at our disposal,” Feasel said. “We’ve been able to move a lot of that work into the manufacturing environment, and, in doing so, really minimize the impact on a site.” 

A microgrid that Schneider Electric commissioned in Hawaii with REC Solar illustrates this point. Schneider was able to do all of its side of the work remotely, working with a local REC Solar representative who was on-site. Remote commissioning took on a whole new value with the onset of the pandemic.

Over time, as these tools and practices are perfected, installation will become not only less intrusive, but also less expensive, Feasel noted.

All of these influences have played into Schneider Electric’s thinking as it’s moved to simplify and de-risk microgrids for the smaller customer. The company has formed new partnerships targeted to the various segments of the market based on their size. 

Last year, Schneider announced a new division, GreenStruxure, formed with Huck Capital, a San Francisco-based private equity firm focused on clean energy. GreenStruxure offers microgrids for small- to medium-sized buildings, those with an electrical load under 5 MW. Schneider has identified this as a massive market, representing 90% of buildings in the US and Canada.

GreenStruxure is a follow-up to AlphaStruxure, a company Schneider launched earlier with private equity giant Carlyle Group to target larger commercial and industrial projects and infrastructure. More recently, Schneider partnered with SolarEdge to focus on the residential market with a new energy control system. Not a microgrid, but a step in that direction, the Square D Energy Center gives homeowners many advantages, including personalized digital control over how their solar energy is produced, used and stored.

Microgrids do the thinking for you

While microgrids have become easier for consumers to install and navigate, the technology is becoming more sophisticated. Microgrids are being programmed to respond to increasingly complex energy regulation and pricing.

“We’re seeing more complex utility rates that consumers must think about. Increasingly, electric utilities are having time variables associated with energy costs. A while back, 10 years ago, only the largest, energy-intense customers saw penalties associated with time-of-use, and now, we see demand charges and even some mechanisms like inclining block rates exposed to residential tariffs,” Feasel said.

“Therefore, a much wider population has to think about not only how much energy they use, but when they use it. If you are going to address that, you need a more sophisticated solution to understand and predict what energy consumption is going to be,” he said.

“The great news,” Feasel added, “is that most of that complexity is occurring and being handled at places other than the customer site. It’s being handled in energy control centers and other places where full-time experts are working on these problems versus out at a local site where sometimes it can be difficult to get the right expertise and capabilities to operate the system.”

The bottom line? Energy management is getting more complicated, but microgrids are being designed to make it all easier for the customer — opening the door wider for more to enter.

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