Navigant Research Blog

In San Diego, A Tale of Two Microgrids

Peter Asmus — December 10, 2013

Besides being the perfect setting for a microgrid conference, San Diego is arguably the best overall market for microgrids in the world.  Two microgrids that are already up and running in the region represent two starkly different views of the future of energy.

San Diego Gas & Electric’s (SDG&E’s) Borrego Springs microgrid, which attracted over $10 million in state and federal funding, is one of the few microgrids to be deployed, owned, and operated by an investor-owned utility.  While originally an R&D project, the 4 MW microgrid has proven to be a valuable asset for the utility, as it has successfully islanded off customers from the larger grid during major storms and power outages and has helped manage the integration of new assets into the larger distribution network.

During an intense thunderstorm in September, for example, the microgrid was able to seal off and continue to provide power to over 1,000 customers in a power outage that lasted more than 20 hours.  Earlier this year, the same microgrid – which incorporates solar photovoltaic (PV) systems, diesel generators, and advanced batteries – provided similar energy security during a flash flood in late August and a major windstorm in April.

In the Desert

The Borrego Springs microgrid, which included Lockheed Martin, Oracle, and Green Energy Corporation as vendors, is being moved into full-time commercial operations.  It also incorporates demand response (DR) and home area networks, allowing SDG&E to experiment with how residential customers will respond to price signals.  SDG&E wants to see how it could deploy such microgrids throughout its system in order to provide a lower-cost solution to providing power in the high desert that forms the eastern part of its service territory.  Given California’s recent mandate on installing 1.3 GW of distributed energy storage, SDG&E is trying to figure out how to wrap microgrids around a total of 165 MW of energy storage that will be deployed by 2020.

Location of Borrego Springs Microgrid

(Source: San Diego Gas & Electric)

The other major microgrid currently in operation in San Diego is at the University of California-San Diego (UCSD) and represents 42 MW in total customer load.  Although it’s located within SDG&E’s service territory, it does not take or sell back any of its services to its host distribution utility.  In fact, Byron Washom, director of strategic energy initiatives at UCSD, told the 3rd Military & Commercial Microgrids conference audience in San Diego that he didn’t want to bother with the accounting burdens of selling ancillary services back to SDG&E.  The only time in recent history that the UCSD microgrid provided power to SDG&E was during a wildfire in 2007, when it reduced demand by 4 MW and exported 3 MW – just enough power to keep the entire SDG&E system up and running.

While SDG&E faced several regulatory burdens in building its microgrid because it was a utility, Byron extolled the virtues of working on a campus, the current leading microgrid market segment, helping North America to lead the world in deployments.  Consider the following:

  • The microgrid can generate 92% of its own generation needs, reducing its power bill by 50% and saving $850,000 per month, with its residual needs handled by a direct access contract dating back to before the Enron debacle shut down such deregulated power deals in California.
  • Since the microgrid is university property, there is no need for any building permits.  The microgrid can also do innovative testing behind-the-meter without having to worry about United Laboratory safety guidelines.
  • The campus has not only saturated all of its rooftops with solar PV but also boasts, according to Washom, the largest electric vehicle (EV) charging network globally, achievements helped along by the advantages of being a self-regulating entity.

UCSD invests only in technology options that cost the same or less than utility service.  Washom has become adept at using OPM – other’s people money – to reduce the cost of technology and, in the process, created a world-class learning experience for students enamored by a business-savvy approach to sustainability.

These two microgrids offer directly competing views of our energy future.  Which vision do you think will win (and also provide the largest societal value)?

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