Thinking beyond Microgrids to Build a Smarter Energy Future

Localized power grids that have the ability to disconnect from the main, centralized grid – known as microgrids – have become one of the electricity industry’s latest darlings. Particularly after Hurricane Sandy knocked out electric generators and wires along the Northeast coast in 2012, urban and utility planners have been devising localized grids that can operate autonomously, strengthen the overall power system’s reliability and resilience, and protect critical infrastructure like hospitals, water treatment facilities, and police stations in the event of a grid-wide outage.

There are environmental benefits to microgrids as well. Clean energy advocates tend to rave about the ability to integrate growing amounts of distributed energy resources, including solar, wind, energy storage, and demand response, which rewards customers for conserving energy. And by avoiding the long-distance transmission of electricity, microgrids and their distributed generators can also reduce energy losses and increase efficiencies. These outcomes all have the potential to curb pollution, while cutting costs for utilities and their customers.

More importantly, as microgrids expand, they prompt us to imagine broader opportunities – and recent developments in Illinois are exploring new frontiers. 

Thinking outside the microgrid box

There are many ways microgrids could serve as a critical piece to a smarter energy future:

• Think beyond electricity – Microgrids are not just smaller, more resilient systems to distribute power, they can also integrate a wide variety of services that enhance local economic development. In other words, microgrids could act as a platform for smart cities, facilitating communication between advanced electric meters, large-scale data, and other technologies with the urban environment. For example, by integrating sensors and networking technologies throughout a community, smart cities can also offer data that enables ride-share companies to optimize traffic flow. With a bottom-up approach, the availability of enormous quantities of new data can empower entrepreneurs to launch innovative businesses that integrate electric, security, communications, and internet services. [Tweet “Thinking beyond Microgrids to Build a Smarter Energy Future”]
• Think about contracts rather than monopolies – Typically, control over electric distribution wires is limited to a monopoly, but microgrids can be owned by different entities that contract with each other for exchanges and services. As an example, one microgrid owner, for a price, could promise to provide back-up power to a separate microgrid during a blackout; another with a large wind turbine could sell renewable energy to a separate microgrid lacking that technology. Instead of remaining dependent upon central planners and regulators, the electricity business can shift to operate like the rest of the U.S. economy – according to contracts. Such an evolution would focus on free markets and encourage more creative, efficient approaches.
• Think about bottom-up technology innovation – Rather than assume a single entity will control all wires and sensors, the advance of communication technologies into the electricity sector is opening opportunities for new players and enormous innovation. For instance, the addition of USB hubs on power transformers and streetlights could allow entrepreneurs to install an array of innovative devices and services that we can’t yet imagine.
• Think about data – Smart technologies, like advanced meters and modern sensors, have resulted in an influx of energy-use data. How we make that data available – for both planning and operations – will be critical to maintaining security while maximizing opportunities. Rather than continue to be controlled by a central authority, customer data is increasingly being owned by customers, who can independently supply their information to third parties that provide useful services to people and businesses. European cities, especially Amsterdam, have been using the new data to offer planning tools and maps that allow private companies to best target investments in energy efficiency, district heating and cooling, microgrids, and distributed generation.

Progress and new opportunities in Illinois

The number of microgrids is expanding, and Illinois is at the forefront of growth. For example, the state’s largest utility, Commonwealth Edison (ComEd), is building a microgrid in Chicago’s Bronzeville neighborhood, and recently received a $4 million grant from the U.S. Department of Energy to incorporate solar power and battery storage. And as an example of thinking beyond electricity, ComEd’s emerging Bronzeville microgrid will link to streetlights that can brighten automatically during a police emergency or dim in order to save energy.

ComEd’s initiative and the Illinois Institute of Technology’s microgrid, which has everything it needs to operate the entire campus, offer changing perspectives on whether the localized grids need to be isolated. New technologies allow these two Chicago microgrids to be integrated in the main grid when appropriate in order to increase efficiencies, but they are still able to operate as islands when needed in emergencies.

Finally, ComEd is also in the midst of rolling out four million advanced meters, and, working with Environmental Defense Fund and the Citizens Utility Board, has taken the lead on providing households with real-time data on their electricity use. The utility’s microgrid could find new ways to transform this data, with customers’ permission, into useful services that save money and improve people’s quality of life.

Microgrids offer varied benefits, and Illinois’ developments will serve as a testbed. Some utilities see them as key parts of an emerging platform of services that will supply them with new revenue streams. A few in deregulated states also view microgrids as a backdoor means to own generation units. Technology companies view them as opportunities to offer new customer services. Environmentalists hope microgrids allow faster and more extensive deployment of efficiency and clean energy. More and more of the beholders, however, recognize microgrids challenge the basic, long-held assumption that the power grid must be controlled by a monopoly electric utility – opening the electricity-distribution market to innovation and investment from competitors.

Photo source: English Wikipedia/Buphoff