How New Models, Not More Funding, Can Boost the Microgrid Market

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New models — not more government funding — will drive the microgrid market forward.

microgrid 2018That’s what panelists and representatives from innovative cities and states said at a discussion during Microgrid 2018, “How to Elevate Microgrids in Government Resilience and Climate Strategies.”

Moderator David Chiesa, director of global business development at S&C Electric, kicked off the lively discussion with a series of questions for the audience, among them, “What does government need to do to advance microgrids?”

Most of the audience, given one word to respond, answered “funding.”

However, Andrew Barbeau, senior clean energy consultant for the Environmental Defense Fund, was quick to disagree.

“I have to disagree with the opinion that funding is what’s needed,” he said. “If you’re dependent on government funding, there’s learning, but how do you look to the future to create value? There’s a limit to government funding.”

Instead, it’s important to consider regulatory structures that allow customers to partner with microgrid owners and share in the resources, he said. “How do you allow customers who want to partner with neighbors and share solar or batteries or other resources and island when needed. How do you do that?”

He said he’s looking at a number of exciting opportunities in Illinois involving opening up the regulatory model to allow people to opt into a microgrids. However, there are now regulatory barriers related to running private lines [over utility rights of way] and other issues.

“How do you work with utilities to invest in your own assets and DER and island your section of the grid. That’s a bigger regulatory question…We’re studying how to make that vision of the future happen,” said Barbeau.

During the discussion, panelists offered a number of new models and ideas.

Resilience at every scale

Edward Yim, associate director, energy administration for the Department of Energy and Environment for the District of Columbia, described his organization’s goals at the neighborhood, street and building level, saying the goal is to have “resilience at every scale.”

At the building level, the department wants building owners to have solar and batteries. For example, the department is working with a low-income, net-zero housing community to provide the equipment. There would be a single meter. “We want them to be able to island when Pepco [the local utility] goes down. We are talking to Pepco about more projects like this that can provide backup power.” He said that the building owner could offer power to potential buyers.

microgrid market

Edward Yim, Department of Energy and Environment for the District of Columbia

The department is also identifying in residential areas the people who can’t handle prolonged outages (such as the elderly or ill.) Its goal is to equip these vulnerable residents with solar and batteries. The hope is to island their segment of the feeder and use solar plus storage.

“At the neighborhood level, we’re trying to go for non-utility owned multi-user microgrids,” Yim added. Right now, a project is being developed at the former Walter Reed Army medical campus, he said. “The vision is a multi-user and non-utility owned microgrid.” Negotiations are underway between the microgrid operator and Pepco, he said.

“This project has bumped up against regulatory issues and has shown the need for light-touch microgrid regulation that would allow independent microgrid operators to self-service to retail users without being regulated as full utilities. That’s a project I’m working on,” Yim said.

DC authority would take over utility planning

In addition, a bill now under consideration in DC would create a Distributed Energy Resource Authority, or DER Authority, that would take over certain traditional utility-planning responsibilities, and have the ability to assess any grid investment larger than $25 million, with a goal of possibly opening it up to competitive bidding.

Pepco would have to transfer network data to this agency,  “so we could find out where we could be more effective and where microgrids could be effective,” Yim said.

Barbeau said there’s lots of interest in third parties being able to opt into microgrids.

microgrid markets

Andrew Barbeau, EDF

“I have been focused mostly on third parties who want to opt into something — say a corridor for commercial and industrial businesses that have batteries or solar or other resources or are near a community solar farm. How can they leverage that to achieve the benefits of islanding? How do they work with existing infrastructure. If we have restrictions on private lines, how do we enable that approach to work. How do they opt into the utility, so the utility controls their equipment, turning on and off the islanding function?” Barbeau said.

He said that he’s working with Shedd Aquarium, which has a microgrid, and wants to add additional battery storage and solar. “How can they work with the utility to enable the function of islanding?”

Reasons for microgrids differ

Maeghan Lefebvre, project manager, Massachusetts Clean Energy Center, said that Massachusetts doesn’t have an overarching policy or mandate to look at microgrids specifically, but sees microgrids as one tool to achieve other goals, such as resiliency,  economic development and greenhouse-gas reduction targets.

Said Yim, “We are interested in microgrids first as a resilience tool and second as a DER optimizer. The way we de-carbonize is important for us and in our sustainability plan we have to look to clean, local resources.”

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