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Thoughts on Microgrids and Utilities

By Dr. Daniel Farb

July 23, 2017


The world is starting to experience a change in the electric grid model, from single source large-utility power to smaller microgrid units. This is causing transmission pains, as traditional utilities often fight this trend, which will lose them customers. Just as in the case of the advent of the automobile, it is better to embrace the future rather than advocating more use of horses.

This transition is basically beneficial to the consumer, however, as it will bring benefits of lower transmission costs and energy independence.

It is starting to become a disruptive force, as this recent online article suggests: http://www.businesswire.com/news/home/20170705005515/en/Distributed-Energy-Resources-Pose-Biggest-Disruption-Utility

I basically agree with the article, except that they left out hydro as the best way to replace base load.

It is unlikely that large cities will ever be energy independent, so they will still need the old grid model, but for smaller potential microgrids, some problems remain:

–What will happen if a local emergency knocks out the local transmission of power?

–What happens if a microgrid doesn’t have the resources to handle spikes in demand? For example, a suburb may be able to handle a lot with small wind and solar installations, but it may not handle very hot or cold days independently.

At the same time, there is another problem. Some large utilities are holding back the transition to renewable energy. They may talk about the wonderful programs they have, but some do whatever they can to make the connection to their grid slow and expensive. This is a negative for everyone.

I would like to propose a paradigm shift in the relationship of the large utilities and the coming microgrid era. A change in regulation would enable the large utilities to sell “insurance’ to the microgrids, so that a microgrid would be required to purchase a power backup insurance of extra power. This has a value for the local microgrid that it should be willing to pay for, and would partially compensate the large utilities for lost business and for their large capital investment of the past.

Then consumers would have more choices—local microgrids with backup insurance or the traditional utility model.

In the spirit of consumer-oriented capitalism, let the best provider win!

Copyright 2017

Posted in Wind Energizer