Energy microgrids: Think small

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Comparing energy microgrids to the familiar centralized grid system, which uses high-voltage transmission lines stretched across the landscape, is very much like comparing the difference between modern cell phones with landline phones with their use of cross-country and undersea cabling.

Microgrids are smaller, localized networks that use one or multiple power generation systems tied in at a lower voltage distribution level, the power lines commonly seen running alongside city streets. Just as cell phones switch from cell tower to cell tower, microgrids can operate somewhat autonomously of the centralized grid by switching between multiple power sources.

A 5MW microgrid project we’ve proposed in Coos County would earn $2 million annually for local schools by using the same money that’s now budgeted for energy costs to invest in onsite power generation using geothermal energy and combined heat and power for baseline energy sources, supplemented by solar and wind.

At an average of $1.5 million to $2 million cost per megawatt and no transmission line costs, local entities can afford to enter the energy production business on the microgrid level and even negotiate power purchase agreements with their neighbors.

Microgrids, known also as distributed generation or distributed energy, produce power at or near the point of consumption. They are more common than you might think. Every self-contained vacation RV is a microgrid. Every naval ship is a floating microgrid. Every hospital running backup power generation in the event of a blackout is a microgrid or has the ability to operate as one. Microgrids may be solely independent of the central grid or have one point of connection through which to share power.

Microgrids are often established to provide independence from the "one size fits all" delivery approach of the central grid. They also tailor power requirements to the specific needs of the local user and can provide consistent, high-quality power. Microgrids are easier to manage when using multiple types of generation, such as combined heat and power using geothermal and with intermittent power supplies such as wind and solar.

At a recent conference of the Communities for Advanced Distributed Energy Resources it was clear distributed generation is going to play a big part in the planet’s energy future. What was unclear is the role investor-owned utilities will play.

Utilities manage and balance their load requirements remotely using a centralized grid and system imbalances have led to massive power blackouts affecting millions of people. Further, investor-owned utility revenues are based upon how much metered energy they sell. Local power may cut into those earnings.

Importing power via the centralized grid network means exporting dollars out of the local economy. The World Alliance for Decentralized Energy estimates the capital costs per megawatt to be as much as 44 percent less than centralized generation resulting in 15 percent lower cost to the consumer in the United States because, “distributed energy technologies are highly flexible and adaptable to local circumstances, allowing for more efficient local electricity generation.”

Communities, industrial parks and real estate developers can afford to enter the energy production business on the microgrid scale. Municipalities are also getting in on the game: The City of Corvallis Waste Water Reclamation Plant and the Sonoma County Water Agency in California are both implementing on-site renewable energy power generation.

In Corvallis, the city provides the land to a private energy developer to own and operate a solar power facility. In exchange the City buys power from the developer at a fixed initial rate plus a fixed escalator for 30 years.

Microgrids offer a level of flexibility to the power consumer similar to the numerous choices now afforded cell phone customers. From what I saw at the recent conference, utilities want to be players in the distributed energy and microgrid markets but may have to come up with some creative energy offering plans to compete with independent microgrids.

Mary Geddry is the CEO of Rogue River Wind.