Biggest Stumbling Block to Microgrids? “We’ve Always Done it that Way”

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What is the biggest stumbling block to microgrids? It’s no longer cost or financing or technology. Instead, the problem is more human centric: Fear of change.

That’s one of the insights Schneider Electric’s Kevin Self offered in an interview leading up to Microgrid 2018, underway this week in Chicago.

stumbling blocks to microgrids

Kevin Self, Schneider Electric

Self, senior vice president strategy, business development & government relations, is part of a team at Schneider educating customers about energy-as-a-service, a model becoming increasingly popular in the industry because it de-risks microgrids for customers. Customers accrue the benefits of a microgrid without making a large upfront capital expenditure. A third party owns and operates the unit.

Similar outsourcing approaches have stimulated markets for solar and energy retrofits, and Schneider hopes it will do the same for microgrids as distributed energy undergoes what Self described as exponential growth.

But it’s not slam dunk – and a lot of education still needs to be done.

“We’ve managed energy in this country in a similar fashion for 140 years,” he said. So introducing new models “takes a bit of time.”

Some customers fear giving up control of energy management, he said. Yet, he noted, they will do so for other areas of their business, outsourcing services that detract from time spent on their core competencies.

For example, college campuses often hire third parties for food services. “So why would they feel compelled to run their energy? It’s because they have always done it that way,” he said.

Despite fear of change, other motivators are tipping campus and corporate decision-makers toward microgrids and other smart energy technologies. A big one, he said, are goals they’ve set for carbon-neutrality or sustainability.

“In 2017, 84 multi-national companies committed to 100 percent renewables, up 58 percent year-over year,” Self said.

These companies, as well as communities, universities and others that responding to customer demand – their customers want them to go green.

Tech giants, like Amazon, are now seeking out locations for data centers with access to renewable energy as a key condition in the selection process. Some have goals to make renewables 100 percent of their electric supply. So green energy development is becoming an economic development play for governments.

“It is becoming a market issue. If states want to compete for economic growth, my hypothesis is that they are going to have to look at this closely,” he said. “We have that beginning with the big corporates and I believe it will trickle down now more quickly to other companies.”

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Sustainability has become a priority for many college campuses, as well. They want to be good world citizens – and students expect it of them. So their use of green energy becomes a recruitment tool. But sustainability come at a cost, especially for campuses that can have anywhere from 50 to 1,000 buildings, Self noted. Energy-as-a-service offers them a more cost-effective option.

“You start talking to them about how they can do energy differently. It’s an engaging conversation, but it takes time for them to get to the point where they are handing it all off,” he said.

So the energy industry finds itself running up against the peculiarities of human psychology as it tries to find ways to make it easier for customers to decarbonize and decentralize energy supply.

“It just takes a while,” Self said.  But once the dam breaks…”

What stumbling block to microgrids do you see? Respond below or on our LinkedIn Group, Microgrid Knowledge.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two 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.

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