Navigant Research Blog

Community Resilience and the Future of Small Grids

Peter Asmus — February 19, 2015

The spate of extreme weather events in recent years has stirred up interest in the concept of “community resilience”—i.e., the creation of more reliable and resilient power grids. The debate rages on how best to provide such services. In a forthcoming report, as well as a webinar on March 17, Navigant Research will analyze and forecast the size of the market for one of the most promising pathways forward: community resilience microgrids (CRMs).

Ground Up

The drive for increased grid resilience comes from community stakeholders, many of whom also value energy independence, sustainability, and local economic development goals. In New York, crowds as large as 100 to 150 people have shown up at recent community meetings, often braving snowstorms, to learn how they can become involved in developing greater resilience at the community level.

This is the segment of microgrids where the most innovation will occur in terms of business models and regulatory reforms. Why? Many of these systems challenge utility franchise rules that prohibit transfers of power services over public rights-of-ways. It may make inherent sense, in terms of both emergency responses and sustainable urban design schemes, to bundle different kinds of customers served by different utility rate classes into a single microgrid. Such novel aggregations, however, bump up against long-standing utility prohibitions on sharing of power.

Smaller Is Better

In essence, each third-party CRM requires a negotiated settlement and special use exemptions (though there are a few interesting exceptions to this generalization).

It is these issues that are at the core of New York’s Reform the Energy Vision (REV) proceeding, perhaps the most comprehensive review of regulations pertaining to resiliency in the nation.

Some providers, such as the Clean Energy Group, argue that microgrids are the wrong focus, asserting that solar PV and energy storage nanogrids, such as those recently funded in Massachusetts, are a better solution. In the short term, this may be the wiser move, especially if they could be aggregated via a centralized control schemes into virtual power plants.

Such nanogrids represent modular building blocks for energy services that support applications like emergency power for commercial buildings, as described in Navigant Research’s report, Nanogrids. These grids typically serve a single building or a single load, generally below 100 kW in capacity—and thus do not violate regulations prohibiting the transfer or sharing of power across a public right-of-way.

Unquestionably, small grids (including both microgrids and nanogrids) represent a major element of the future of the power sector—an essential building block for the Energy Cloud that will encompass distributed generation resources and intelligent networks to meet energy demand, rather than centralized hub-and-spoke power grids. This spring, Navigant will offer a new collaborative study called The Future of Small Scale Microgrids and Nanogrids that will bring together utilities and their suppliers to better understand the risks and opportunities of this emerging market landscape. Click here for more information.

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