Utilities Harnessing Microgrids

By Rick Laezman | Dec 15, 2014




The power generation environment is changing, and so are the systems used to transmit and store that resource. Microgrids are emerging as one of the key components in the new energy landscape.

The concept is not new. Microgrids have existed for many years in various forms. As renewables, power storage, electric vehicles and digital communications take on ever-expanding roles in the dynamic of electricity, the microgrids’ nature and importance have transformed as well.

By various accounts, the concept of microgrids is catching on. Most important, it is catching on with utilities. A November study released by the Elmhurst, Ill.-based market research firm, TechNavio, projects robust growth for the microgrid-storage market in the next few years. The study divides the market into five segments: advanced lead-acid batteries, advanced lithium-ion batteries, flow batteries, sodium­-metal-halide batteries, and flywheels. 

The study, “The Global Energy Storage for Microgrids Market 2014–2018,” foresees a combined aggregate growth rate of 19 percent.

A separate study confirms the trend. In a survey of utilities, the online industry resource, Utility Dive, attempts to quantify their sentiment toward microgrids. Noting that most microgrids are owned by private or government entities, the study projects this to change. Nearly all of the utilities surveyed—97 percent—see microgrids as a business opportunity for them over the next decade, and more than half see themselves in the microgrid market within five years.

Anecdotal evidence further supports an expanding role for microgrids. Numerous local governments are developing microgrids to help with energy storage, improve grid performance, and manage the delivery of power and other valuable resources, such as water and transportation. These include $5.1 million in funding from the Connecticut Department of Energy and Environmental Projection for projects in the cities of Milford and Bridgeport; $1.26 million in federal funding to the New Jersey Transit for an electrical microgrid; and a 2.5 megawatt, 5-megawatt-hour battery-storage system for the University of San Diego’s microgrid.

With this momentum, microgrids are only a few steps away from the mainstream. The Oak Ridge National Laboratory is studying the potential of microgrids at its Distributed Energy Control and Communication Laboratory. In an interview published on the website in November of this year, lab researcher Yan Xu describes the potential of microgrids. She identifies two basic functions: distributed power when disconnected from the grid and efficiency and cost reduction when connected to the grid.

These functions hold great potential for microgrid users but not before the systems are standardized. This is one of the things researchers are studying at the Oak Ridge lab. According to Xu, as soon as microgrids are standardized, “we’ll start seeing them in areas with a high penetration of renewables and high energy prices.”

About The Author

LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected]

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