How Microgrids Help Businesses Reach Cost, Resilience and Climate Goals

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Microgrids provide businesses with a way to secure energy resilience, reduce costs and achieve climate goals. This excerpt from a new special report by Microgrid Knowledge and AlphaStruxure offers real world examples.

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Download the full report.

Microgrids are the next logical step in the evolution of energy management for businesses. Many businesses are already working to be energy efficient and green. Microgrids enhance these efforts and add a third layer: resilience. 

As a result, microgrids serve as both a short- and long-term solution for businesses…and the world. 

Short-term microgrids keep the lights on and businesses open while helping them meet their sustainability goals while keeping energy affordable. 

Long-term they help reduce greenhouse gases through their use of clean and renewable energy, contributing to efforts by states to meet clean energy mandates. California has set a goal for 50% of its electricity to be powered by renewables by 2025 and 60% by 2030. By 2045 the state intends to get 100% of its power from zero-carbon sources. Several other states have similar — and sometimes more ambitious — goals. Seven states, plus Puerto Rico have adopted clean energy transition laws, according to the UCLA Luskin Center report. Washington DC seeks 100% renewable electricity by 2032. New York has set a target of 100% carbon-free electricity by 2040, and Massachusetts is seeking net-zero emissions by 2050. 

And it’s not sustainability and reliability alone that microgrids bring to the table; they offer an opportunity to reduce energy costs for everyone by way of their relationship with the central grid. They contribute new and efficient resources that help moderate the cost of operating the grid to the benefit of all who use it. 

In addition, microgrids tap into a growing, grassroots movement for local control of energy. 

Making microgrids affordable for businesses

By making microgrids simple and affordable, the energy-as-a-service contracting model helps accelerate all of these trends. While once microgrids were the domain of only those ready to make a large capital expenditure, today they are available to a wide swath of businesses and institutions thanks to the energy-as-as-service approach. 

As their numbers increase, microgrids will begin to interact with each other, communicating, sharing resources, and coordinating activities to achieve levels of efficiency and electric reliability not possible with today’s centralized grid. This concept is sometimes described as a ‘grid of microgrids.’ Should this vision bear out — and it appears inevitable — an interconnected web of microgrids and distributed energy could act as the primary power supplier for advanced economies. The centralized grid we rely on today would become secondary, serving as a backup system. 

But that’s the vision for the future. How about right now? Here are a few examples of microgrids now in operation and the benefits they offer. 

  • Blue Lake Rancheria Microgrid 

When PG&E shut off power to more than 30 California counties in October 2019, Humboldt County was not left completely in the dark, thanks to the microgrid at the Blue Lake Rancheria tribal reservation. NPR reported: “As one of the only gas stations in the county with power, the reservation provided diesel to United Indian Health Services to refrigerate their medications and to the Mad River Fish Hatchery to keep their fish alive. The local newspaper used a hotel conference room to put out the next day’s paper. Area residents stopped by to charge their cell phones. Ganion estimates that on that day more than 10,000 nearby residents came to the reservation for gas and supplies.”

  • Stone Edge Farm Microgrid 

During the same power shut off, a winery in Sonoma County, California, kept its operations up and running — and assisted neighbors thanks to its microgrid. Troy Wooster, who operates the The Stone Edge Farm microgrid reported at the time: “We are currently running three households, one spa, one woodworking shop, two car storage barns and two trailers and as a part of our community outreach, we are powering a refrigeration van that stores food from a couple of restaurants from Downtown Sonoma.” At the time the microgrid had been operating islanded from the utility grid for 33 hours. 

  • Gordon Bubolz Nature Preserve in Appleton, Wisconsin 

Nature decided to upstage the rest of the presenters during a microgrid tour at the Gordon Bubolz Nature Preserve in Appleton, Wisconsin. A massive thunderstorm hit on Sept. 17, 2018 as about 75 members of the International Association of Electrical Inspectors (IAEI) toured the new 18,000 square-foot green building, served by the microgrid. “You couldn’t even open the door to the building, the winds were blowing so hard. Torrential rains,” said Don Wingate, vice president of sales, utility solutions for Schneider Electric which worked with Faith Technologies to build the microgrid. The electrical inspectors had come to learn about how the advanced microgrid offers electric reliability when the power goes out. And then—defying probability — the power did just that. 

utility microgrids

By naulicrea/Shutterstock.com

A world made for microgrids

Short term, microgrids keep the lights on and businesses open while helping enterprises meet their sustainability goals. 

Long term, microgrids help reduce greenhouse gases through their use of clean energy, assisting states like California achieve their climate and renewable energy goals. 

In addition to producing clean energy internally, microgrids can assist the larger grid in integrating renewable energy. Because renewable energy is intermittent, grid operators need quick acting resources they can call upon to balance supply and demand when the wind suddenly stops blowing or clouds cover solar panels. 

Microgrids can play this role. 

The ability to manage intermittency is becoming ever more important as states step up their renewable energy goals. About three-fifths of U.S. states have renewable portfolio standards, requirements that a percentage of their power come from renewables by a specified date. California in 2018 pushed the envelope by increasing its standard. By 2045, 100% of its electricity must be carbon free. California is often an energy leader, so not surprisingly other states are following suit. 

Today, more than a dozen U.S. states, districts, and territories and more than 200 cities and counties have 100% clean electricity goals — or have already achieved the marker. A report by the UCLA Luskin Center for Innovation says that that one out of every three Americans (about 111 million Americans and 34% of the population) lives in one of these areas. 

This is a world made for microgrids — and a world microgrids help make. So how do you take the next step and secure an energy-as-a-service microgrid for your operation? 

 This special report series will conclude with an entry exploring how energy-as-a-service contracts work and real-world examples.

See the first entry in this article series that covers whether energy-as-a-service microgrids are the next logical step for California, and for the rest of the country as well. The second explores how microgrid growth appears to have reached an inflection point. The third post answered this question: Can you afford not to have a microgrid?

We also invite you to download, “Why Energy-as-a-Service Microgrids are the Logical Next Step for California…and the Rest of the U.S,” free of charge, courtesy of AlphaStruxure. And we encourage you to share this link widely to help educate California — and the rest of the U.S. — about energy-as-a-service microgrids.

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