The Philadelphia Navy Yard Story: The Remarkable Emergence of an Unintentional Microgrid

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From rags to riches, the Philadelphia Navy Yard offers one of the more remarkable tales of the emergence of a microgrid.

Navy Yard

A factory within the Philadelphia Navy Yard. Photo by Felix Lipov/

Located at the confluence of the Schuylkill and Delaware Rivers, the site was an abandoned shipyard 20 years ago with most of its electric service turned off. Today, it’s a thriving commercial center, powered by one of the nation’s most sophisticated — and evolving — microgrids.

Credit for its success goes to an unusual coming together of the military, the city of Philadelphia, the local electric utility, a development authority and some energy visionaries. Oh, and dog lovers.

The story begins in the late 1990s when the federal government decided to shutdown the Naval shipyard, one of 97 major installations closed as part of the United States post Cold War military cutback. The decision left city officials trying to figure out how to blunt the economic loss. The shipyard, once one of the world’s largest, employed 47,000 people at its height during World War II. By the time it announced plans to close, it had 7,400 employees.

The city turned the project over to the Philadelphia Economic Development Corporation (PIDC), a public/private entity charged with redeveloping the 1,200 acres into a commercial center.

No one to run the power system

At one time the shipyard had what a RAND report called one of the “largest, most complex” utility systems in the region. But before the base closed, most of it was no longer working. The Army had decommissioned all but a portion it would use for a scaled-down operation.

“We were about to take over a thousand acres of property, most of which was not going to have electric service,” said John Grady, president and CEO in an interview at the PIDC’s office in Philadelphia. “So our vision for energy and sustainability started with a very practical problem.”

PIDC solved the problem by getting into a new line of work — the power business. 

“We went to the PUC [public utilities commission] and had ourselves declared an unregulated entity,” he said. “We were not looking to get into the power business. We didn’t see a strategic advantage. We were forced to do this because we needed power.”

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PIDC thought initially that PECO Energy, the local utility, might be able to take over the task for them. But the site’s electrical infrastructure wasn’t in compliance with the utility system, and the costs to merge the systems appeared astronomical.

“The Navy didn’t have a whole lot of information about this electric grid and they couldn’t give us a set of as-built plans. They couldn’t give us operating manuals. So we had to learn and build,” Grady said.

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This was in 2001, before the term microgrid was in vogue. But the new commercial development was on its way to becoming one anyway — unintentionally and out of necessity.

PIDC began the slow process of building electrical capacity as it attracted commercial tenants. About 10 years ago the innovation accelerated when Will Agate (now with Ameresco) came on board  as senior vice president. It was Agate who got PIDC thinking about imbuing resiliency and redundancy into the power system, Grady said.

Sustainability on steriods

The Navy Yard Network Operations Center, Photo by Elisa Wood

Today the Navy Yard is home to more than 170 employers and 15,000 workers who occupy 7.5 million square feet. A range of businesses and institutions make the Navy Yard home. But it’s become a particular magnet for those that need premium power, such as research facilities. 

Characterized by what Agate calls “sustainability on steroids,” the campus not only features a microgrid but also LEED buildings, a range of energy efficiency measures, a sophisticated water run-off system, and parks and green space amid modern and historic buildings. The Navy Yard’s promotional materials quote Politico which described it as the “coolest shipyard in America.”

Green and cool, it has the characteristics that draw highly skilled employees and the employers who seek them, explained Agate. And they can be seen on the campus out walking their dogs — another unusual and attractive feature of the Navy Yard. In fact, its flexible dog policy sealed the deal for one of its highest visibility tenants, Urban Outfitters, which brought its corporate campus to the Navy Yard. The company had sought a location that would allow its employees to bring their canine pals to work.

utility connected microgrids

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The microgrid-utility relationship

Another unusual feature of the Navy Yard is its relationship with PECO Energy. Microgrids, especially large ones, are sometimes perceived as a competitive threat  to utilities. The Navy Yard, however, proved to be the opposite. PECO supplies backup power capacity to the microgrid. So as the Navy Yard has grown and increased its energy demand, the microgrid has become an increasingly important PECO customer.

But PECO’s participation extends beyond the provider/customer relationship. The Exelon subsidiary sees the Navy Yard as a setting where it can learn about distributed energy and related technologies for its customers, said Phillip Eastman, manager of economic development for PECO.

“Customers are going to be using energy differently, in more distributed ways,” Eastman said. “These are things that we want to learn, we want to be part of. We want to help.” 

PIDC’s Grady described a strong working relationship between and the utility and Navy Yard. “PECO has been a partner from day one, always helping us understand how to operate, providing advice. They are there literally with us all the time.”

Other partners who’ve helped build and operate the microgrid’s energy assets are: Ameresco, Alternative Energy Development Group (AEDG), Burns, Bloom Energy, DTE Energy, GE and Protogen Energy.

Inside the Navy Yard microgrid

Under the management of Rudy Terry, director of smart grid operations, the Navy Yard energy assets now include:

  • 8-MW natural gas generator, built and operated by Ameresco. The system has four continuous duty RICE engines, each connected to 13.2 kV generators that output directly to the 602 substation bus (a primary PECO facing substation). The generators are operated economically in direct peaking service and in PJM service for their energy and reserve market.
  • A 600-kW Bloom Energy fuel cell plant, owned by Urban Outfitters and net metered by PIDC
  • A 400-kW rooftop community solar installation that was built, owned and operated by AEDG under a power purchase agreement with PIDC. Five customers, virtually net metered within the Navy Yard, have shares in the community solar. A second, larger rooftop solar plant project is in the formative stages.
  • The Navy Yard has contracted for limited, but priority use of a 6.2 MW/14.8 MWh energy storage system (Li-ion battery), to be built, operated and owned by a project company backed by Citizens Energy.  NEC is the solutions provider.
  • Penn State and ProtoGen have created an intra building advanced microgrid with support of hybrid distributed energy resources under a DOE grant. The microgrid within the microgrid is the final testing stages of a multi-year effort.

Today, the Navy Yard serves 32 MW of annual peak load and 25-26 MW of annual average peak. But it’s set to grow — a lot — as it prepares for the connected city era.

“We’re an economic development organization, we want to attract companies and employment and investment and growth, and so we want to provide those people with what they want. And we think energy is definitely a part of that,” said Grady. 

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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. Rudolph Terry says:

    Nice job!

  2. Philip M Gonski says:

    Excellent article of a cutting edge transformation

  3. Terrific article. Good to see forward-thinking technologists, business development, and the military come together.

  4. Great article from my favorite city. GO PHILLY (and Eagles). As a longtime energy fan (56 panels on my house) and member of CEVG/F, I love what the Navel Yard is doing and has accomplished to date. Keep up the great work!

  5. Article is resourceful and the navy yard project is a true example for transformation. A perfect project to qualify and leverage its benefits by getting it certified through PEER –

  6. Thomas R Casten says:

    What about heat recovery and supply of thermal energy to tenants? Over half of the energy in the fuel to the generators emerges as low-grade thermal energy.
    Tom Casten


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