Technology Corridor

How software controls can bridge the gap between wholesale market prices and consumer behavior.

As ideas go, a microgrid is nothing new. Think of steam pipes for district heating in older urban cores. But add a few software controls, and the possibilities grow.

A microgrid-in our case a simple aggregation of electrical loads and generation-can take many forms: a shopping center, an industrial park, or a college campus. Within the system, you may find fuel cells, microturbines, or reciprocating engines. Typically, the generators within the microgrid also supply heat for local needs, such as space heating or dehumidification.

From a utility's viewpoint, the microgrid looks just like a single electric load. But seen from the opposite side-from behind the meter where the consumer resides-a microgrid can function as a distributed energy resource (DER). It can produce value both by (1) maximizing energy and thermal efficiencies to reduce electric demand, and (2) selling useful product back to the integrated utility grid in the form of ancillary services, like voltage control or regulation.

Microgrids might even help the industry achieve the elusive goal of demand response-a feature now missing from electric industry restructuring models, which lack retail tariffs that expose consumers to the real market consequences of their decisions about power usage.

In fact, a study has shown that using microgrids for load management not only benefits those consumers who use the technologies, but also lowers the wholesale market prices paid by all consumers.