Elisa Wood, editor-in-chief of Microgrid Knowledge, and Erik Svanholm, vice president of non-wires alternatives at S&C Electric, discussed the “tension” in the energy industry during the recent Microgrid 2020 Global event. Wood and Svanholm explored different dynamics that are impacting the microgrid market today and what trends are characterizing the future of the industry.
Svanholm’s topic of choice? Tension. Tension in the energy and microgrid industry.
“The concept of tension came to me in the context of thinking about the different dynamics that are affecting microgrids today in 2020,” he said. “And, we have come a long way over the last decade, which, in my mind, was really the first decade of microgrids’ existence. And, now that we are entering the second decade, what are the trends that are characterizing the future of this industry?”
Svanholm said tension was the first word to come to mind, and it exists in several different dimensions in the microgrid and energy industries.
“There are factors at play and forces at play that might be pushing and pulling against each other, and it may be the case that one side or another eventually wins out. Or, it could be the case this undecided state persists and becomes the new equilibrium … it means we are at another inflection point for the industry,” Svanholm said.
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As for how customers across an array of industries can relate to the topic of tension, it often comes down to trying to meet a variety of different energy goals at the same time — some of which are easier to reconcile than others.
“For example, customers are always looking for an economic rationale for their investments, but we know that microgrids are a large, capital-intensive investment. At the same time, increasingly, customers want their energy security and resiliency to be paired with increasing levels of sustainability. And, in some cases, those objectives are aligned, and, in other cases, they might be in opposition. And, that might be a state that persists or one that resolves over time,” Svanholm explained.
One of the tensions in the industry is sustainability versus resiliency, or, more simply, renewables versus fossil fuels.
How can the industry reconcile that tension? Svanholm said time will help, “as renewables including solar, wind, battery energy storage become more economical and more durably reliable and establish a track record of long-term reliability.”
But, today, tension remains because fossil fuel generators are very economical as well as very effective and resilient in day-to-day operations, while renewables often don’t exhibit these features to the same extent.
“You do have the situation today where, in many cases, you are forced into a decision between an economical and highly reliable 24/7 solution in the form of, for example, a natural gas generator, when you would really prefer a solar plus storage solution,” he said.
But, as we see more successful real-world applications of renewables, the tide could turn. That said, effectively deploying fully renewable resources that can island and provide community power for multiple days at a time, and perhaps multiple weeks, remains a very challenging proposition.
“And, even today, utilities have decided that they are going to have to make do with fossil fuel sources in the near term, as we keep an eye on the future for what can be the next step,” Svanholm said.
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