What The Heck Is A Microgrid?
Jacob Barrons
Introduction
The electrification of our economy is creating new challenges for energy utilities. The U.S. Energy Information Administration forecasts energy consumption worldwide to grow approximately 50% between 2018 and 2050, with renewables – solar, wind, and hydroelectric power- being the fastest growing energy resources. This increase in energy demand is coupled with a rise in the need for more resilient energy grids. Climate change and increasing energy demand have highlighted pre-existing issues as well as created new ones that threaten the longevity and reliability of energy grids across the country. In the last two decades, power outages from extreme weather have doubled. The North American Electric Reliability Corp (NERC) and Federal Energy Regulatory Commission (FERC) listed extreme heat, the drought in the western United States, an increase in wildfires, and hurricanes as climate-related challenges to our energy grid. Increased energy demand will strain existing grids that are already exposed to climate-related risks, so we must address the existential risk of climate change with renewable energy. The amount of renewable electricity added to the global grid between 2021-2026 is projected to be 50% higher than in 2015-2020, but to meet net zero emissions by 2050 globally, the rate between 2021-2026 must increase by an additional 50%. This confluence of issues requires a new way to create, store, and think about how energy, grids, and communities can and should interact.
What is a Microgrid?
A microgrid is simple. It is an energy grid with a local control component, allowing it to be disconnected from a traditional grid and operate independently. A microgrid can include batteries, fossil fuel generators, and renewable energy sources like solar panels or wind turbines. The traditional grid in the United States is comprised of eleven thousand power plants, three thousand utilities, and more than two million miles of power lines separated into three separate grids, the Western grid, the Eastern grid, and the Texas grid. These three grids are divided into generation (the creation of electricity), transmission (the long-distance movement of that electricity), and distribution (the movement from substations to homes and businesses). A microgrid seeks to localize the entirety of this process by creating the ability to generate a portion or possibly all of a community's electricity needs itself and distribute it to homes and businesses.
Here in Colorado, a partnership between the City of Fort Collins, Colorado State University, New Belgium Brewing, and other private companies and government agencies has created a microgrid to test the ability of the city to coordinate mixed energy resources to reduce peak loads by 20-30%. In the process of building this microgrid, New Belgium Brewing was able to provide over half of its required power with a combination of biogas generators and solar panels.
Why now?
On June 2, 2022, Colorado Gov. Jared Polis signed two new bills: The Electric Grid Resilience and Reliability Roadmap, and Microgrids for Community Resilience Grant Program into law. These pieces of legislation set out to create a roadmap that locates where microgrids will be most advantageous, high-risk communities and facilities, and where grid extension is impractical. They also fund financial and technological support for microgrids to remove barriers to their development. This legislation comes at a time when renewable energy companies are competing with traditional utilities to create microgrids in new development communities. Coupled with the climate resilience issues mentioned already, these renewable energy companies are seeking to undercut traditional utility companies with lower prices created by the efficiency of microgrids. In areas like Colorado and Southern California, solar companies could create microgrids within new developments that utilize solar panels to greatly reduce the cost of energy.
Conclusion
The electrification of everything is coming to a grid near you. Our cars, homes, and commercial buildings are all becoming more dependent on electricity. The question is, can we continue to utilize the same basic energy grid created in 1882 by Thomas Edison to power them? The construction of our power grid needs to be as innovative as what it is powering and microgrids are an excellent solution. They localize power, create resilience in light of the increasing number of climate-related natural disasters, lower electricity costs, and scale up to meet the massive demand for electricity in the coming years. Colorado is already starting the process of identifying where and when to build microgrids, but consistent pressure is needed to ensure that we can stay the course and incorporate microgrids into communities across Colorado, even as difficulties arise and special interest groups lobby against any change from the status quo. The simultaneous need for communities to become more resilient and the need for traditional utilities to maximize the utilization of their assets will likely create legal issues for all ecosystem participants. How governments, communities, microgrid developers, and traditional utilities work together will be the defining factor in the strengthening of our grid and our economy.