For many, it’s the next logical step for smart grid technology.
Peter Asmus is a principal research analyst contributing to Navigant Research’s Energy Technologies program, with a focus on wind energy as well as emerging energy distribution models such as microgrids and virtual power plants. Asmus has 20 years of experience in energy and environmental markets, as an analyst, writer, and consultant.
The term "microgrid" used to give utility executives heartburn. These small, self-reliant systems would pop up, seemingly at random, within a utility's service territory, threatening both the utility's resource plan and its obligation to serve reliable power. They went totally against the grain of what utilities were all about: providing a standard level of electricity service to all customers from large centralized power plants based around economies of scale.
The idea of the intentional islanding of distributed generation from the wider power grid also raised public safety concerns. Furthermore, if shown to work well, these microgrids - typically deployed on college campuses, military bases, or in hospitals - would also contribute to the erosion of the fundamental utility business model. Utilities would see their energy sales decline - along with revenues - as customers continue to deploy more on-site generation (in the form of rooftop solar photovoltaics), more energy storage (perhaps in the form of an electric vehicle, or EV, plugged in in their garage), and more automated demand response capability (via smart thermostats and appliances).
Flash forward to the future - which is now - and a number of technology trends and regulatory reforms appear to be accelerating the spread of microgrids. Key among the technology trends are the following: