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New Community Business Models and Flywheel Concept Launched for Microgrids in California

Peter Asmus
May 10, 2018

Much of the innovative development of microgrids in the US has been on the East Coast. It is spurred on by extreme weather events and corresponding state government initiatives designed to boost resiliency. However, California—a longtime pioneer of microgrids featuring high penetrations of renewable energy—is plowing fresh ground in both new business models and enabling technologies for microgrids.

Westward Expansion 

The California Energy Commission's most recent foray into helping the state meet its renewable energy and greenhouse gas reduction targets included the recent awarding of over $51 million to 10 microgrid projects. However, another program focused on the broader concept of advanced energy communities is planting seeds that may help address thorny regulatory issues while also introducing a novel energy storage technology.

The novel business model is being deployed in Lancaster, California, which is one of many communities in California taking advantage of a community choice aggregation (CCA) law passed back in 2002. Since California’s initial foray into retail deregulation and customer choice ended in the so-called Enron disaster in 2001, the only way for residential customers to choose new power supplies was either to install rooftop solar or be part of a CCA. I played a small role in helping create the state’s first CCA in Marin County, which has now expanded to adjacent jurisdictions. The following figure shows the status of this movement. Orange areas represent currently operating CCAs, green areas represent regions where program launches are expected in 2018, and blue areas represent programs in exploratory phases.

Map of California CCAs: Operating, Current, and Proposed Development

(Source: Local Energy Aggregation Network)

CCAs are somewhat limited in what they can do in creating community microgrids, since the incumbent investor-owned utility still controls the distribution grid. In Lancaster, the CCA serves as the single point of governance for a microgrid designed to serve 75 new homes known as Avenue I. In this example, 450 kW of rooftop solar PV systems, EVs, and a 1.4 MWh of centralized energy storage system are the key building blocks. The design of the system incorporates a new flywheel technology. While microgrids have deployed flywheels in the past, especially in Australia, where they were historically used to inject short bursts of power to help manage variable wind with diesel generators in remote applications. This flywheel from Amber Kinetics of Fremont, California is instead being deployed within a grid-connected context for long-duration energy applications, thereby storing solar energy for up to 4 hours.

CCAs at Work

“We think this is a scalable model for affordable housing,” said Brett Webster, project manager with the consulting firm Energy Solutions. Only a handful of affordable housing microgrids exist globally: 2500 R Street project in Sacramento and Marcus Garvey Village in New York City are perhaps the most noteworthy. In Lancaster’s case, carbon is reduced by 70% and onsite sources provide 77% of local consumption at a cost of 13 cents/kWh.

The flywheel purports to be cheaper than the Lithium-ion (Li-ion) batteries that appear to be taking over the microgrid market. They are manufactured from steel, which lowers manufacturing costs, and they do not represent fire hazards, which to date have limited Li-ion battery installations in many dense urban environments due to local fire codes.

Whether the CCA structure propels community microgrids forward remains to be seen, as most are focused on low cost wholesale renewable supplies. Once the microgrid is completed, the results from Lancaster could spark a change in that status-quo thinking.