The Future of Microgrids

This is the third part in my three-part series on microgrids; part one offers an overview of the state of microgrids, and part two explores areas where microgrids are taking root today.

Unlike bridges to former futures, our resilient, decentralized energy tomorrow isn’t likely to be overlorded by a few major players. Distributed generation depends on localized power, and its plugged-in citizenry, to properly function. although that process has its own learning curve.

“Microgrids may empower energy users in new ways,” Pareto Energy CTO Shalom Flank told me, “but most of us don’t really want to run our own energy systems!”

“It’s a little bewildering, because there’s no Microsoft of microgrids,” explained Navigant’s Peter Asmus.

“There are so many types of microgrids that I don’t think there will be one company that takes off. There will be some vendors specializing in how to sell energy, others in how to sell energy security, others selling hardware and software solutions. In the long term, Asia Pacific might be the microgrid leader. It’s got a lot of islands and Japan is phasing out nuclear. You don’t have to worry about tariffs or tax credits. Even with Fukushima, the power outage rate in Japan is lower than it is in America.”

Not that there aren’t other movers and shakers in the space. Siemens is working with storage battery startup Aquion Energy, which also landed $20 million in venture capital from Bill Gates and other futurists.

Asmus sees ABB Group and General Electric, competing with Siemens to buy France’s’ Alstom, as other major microgrid powers. Meanwhile, GE and PowerStream have teamed up for a joint microgrid demonstration project in Ontario.

“Microgrids are starting to move into the mainstream, albeit slowly,” said Asmus.

“Five years ago, most microgrids were research and development projects, but now they’re used for power purchase agreements. They’re like solar now: We take care of installation, you pay us for energy. Microgrids face a regulatory maze, as most utilities are still leery. Some like American Electric Power, Duke Energy and San Diego Gas & Electric are building their own, and trying to figure out how they can make money off them.”

“Part of the problem is that today’s power grid obeys the laws of physics,” explained Flank.

“Just as water runs downhill, power flows toward lower voltages, wherever they may be. We don’t really control the grid; we just try to set up the terrain, so we get the outcome we want. But modern power electronics, the same silicon revolution that has fueled so much change in every other sector, give us the ability to move electrons exactly where we want them, at the megawatt scale.”

But much of the changes we need will come from customers who can’t get what they want from the grid, concluded Asmus. “Ten years out, microgrids will be an everyday, non-controversial decision.”

This article appeared at Solar Energy

Microgrids 101, In Three Parts

How Microgrids Offer a Cleaner, More Resilient Electrical Grid

The People and Places Making Microgrids Work Today

A Bridge to Somewhere? The Future of Microgrids

SolarCity Moves Into Microgrids

Elon Musk’s Vision for a Clean Energy Future