Microgrids Could Deliver a Short-Term Fix for America's Broken Energy System

We’ve got a really big economic and environmental problem. The good news is there may be a backdoor way to solve it with both economic and environmental payoffs.

The problem is the nationwide electric grid, most of which was built 50-75 years ago. It is both poorly maintained and has nowhere enough capacity to distribute the huge amount of electricity from renewable sources — solar, hydro, and battery — that will be coming online both to meet growing national power demand and to replace polluting conventional-generating facilities.

Even worse, aging high-tension wires in California have been blamed for starting many of the growing number of wildfires ravaging the state. Most dramatically, when a single falling tree hit a power line in Ohio in 2003, the resulting domino effect plunged 50 million people in eight states and Ontario into darkness

Experts agree we need to completely replace the existing grid with a state-of-the-art “Smart Grid” using solid-state digital components. Unlike the current grid, designed solely to distribute current generated in the massive, fossil-fueled plants of the past to industry and homes, the Smart Grid will handle two-way electricity flow from widely distributed sources such as rooftop solar and wind farms, as well as two-way data flow that will allow much more precise real-time balancing of supply and demand.

Tall Order

As you can imagine, even with a massive plan in place and unlimited funding, it will take at least a decade to replace the 300,000 miles of transmission lines, substations, etc., complicated by a complex regulatory process that can also delay the start of individual projects by years. Unfortunately, there’s no such top-down nationwide project. How can we deal with this crisis?

That’s where a patchwork, bottoms-up approach may be part of the solution.

The same two-way digital components needed for the Smart Grid can also create small-scale projects built around local energy sources such as solar arrays and wind farms —and even tap excess electricity stored by EVs after their charging needs are met. They can serve areas as small as a neighborhood or as big as a city.

Microgrids offer a range of advantages compared to the conventional grid:

They allow quicker grid response to disruptions (a microgrid can instantly switch to “island” mode so it can still operate if the overall grid fails).
They make the overall grid more flexible and efficient right now, rather than waiting until the overall smart grid is complete. They can add renewable power now, from rooftop solar to wind farms to excess power stored in EV batteries after charging. Because power is generated close to the point of use, it reduces the estimated 5-7% of power lost when electricity must travel by wire many miles to where it’s used.
They have added features keyed to digital manufacturing, such as “triple redundant power, DC voltage, complex time-dependent curtailment schemes."

Regulatory Hurdles

Microgrids are still just a niche, according to the Center for Climate and Energy Solutions, with a total capacity of almost 4.4 gigawatts. According to the Center, dramatically increasing their number is primarily a legal and regulatory issue, requiring a clear legal definition of a microgrid and spelling out the microgrid owner’s rights and obligations.

Until recently, microgrids have been primarily located in areas with distinct boundaries (and frequently isolated from the overall grid) such as islands or military bases, or on single-owner sites such as universities or medical campuses.

However, there is no inherent reason why they could not spread to industrial parks, especially those on the cutting edge of the conversion to Industry 4.0 digital manufacturing processes. Such locations are ideally suited to microgrids’ ability to respond instantly to fluctuating energy supplies and/or demand.

According to a white paper by researchers at OSIsoft LLC (now part of Schneider Electric, a microgrid leader): “Typical examples are large factories with internal power generation [and] large commercial or industrial building complexes with power generation … The local generating sources and loads at these complexes are often better handled at lower voltages than the main grid.”

The U.S. Department of Energy’s Office of Electricity is tasked with accelerating the Smart Grid transition, including microgrids, working with both the public and private sector. Its work was boosted dramatically by the Bipartisan Infrastructure Law and the Inflation Reduction Act, which included $30 billion for Smart Grids.

It is reasonable to doubt that private utilities will push the envelope on the transition, since they have an inherent conflict of interest: much of their income has been from the centralized, fossil-fueled plants that will be replaced). But there is nothing to stop private industry from stepping up to build microgrids as a way to simultaneously reduce their own energy costs and their environmental impacts.

Microgrids—and, eventually, the integrated Smart Grid—will spread in part because they are built on the same digital technologies Industry 4.0 uses. Because all the components are digital, they all share the same standards and data (as well as electric current) that smart products do.

Instant sharing will allow more precise matching of supply and demand, allowing innovations such as products (think home dishwashers) that will operate at various times of day throughout the year, starting when electricity demand and price are lower. Similarly, storage batteries will become a vital part of the total energy solution because solar panels can generate more electricity than they need during the day, but none at night, so the batteries store the excess, then release it at night. (One breakthrough that deserves particular attention is Form Energy’s battery, which does not use rare earth materials as used in EV batteries, but plain old iron, easily found nationwide—so it’s not subject to supply chain issues or dependent on foreign suppliers).

Specific microgrid solutions can be crafted based on local needs and power sources. For example, KB Homes is building “Energy-Smart Connected Communities” in Menifee, California. The project consists of state-of-the-art energy-efficient, all-electric solar homes that have individual solar battery storage systems. Connected by a microgrid, the homes also share a communal battery providing power if the grid fails.

A research paper from 2020 gives an indication of how sizeable portions of the Smart Grid may be linked long before the overall transformation is complete. Researchers at Shanghai Jiao Tong University proposed the possibility of using fuel-cell-powered vehicles (transit buses?) to take excess energy generated by one microgrid and transport it via the fuel cell to another microgrid for use there. Both would benefit.

That hypothetical example may seem too far from reality, but the inherently digital nature of microgrids makes linkages inevitable. I suspect they will form a patchwork quilt, gradually filling in at least some of the spaces between them, and, in the process, speeding rollout of the overall Smart Grid. The economic and environmental benefits are simply too great for microgrids to not become commonplace.