Future of the Distributed Microgrid Market
The distributed microgrid market is rapidly evolving. I’ve written about microgrids before, and they remain an excellent way to utilize renewable energy sources and boost power grid resiliency and reliability. That said, it’s not all peaches and cream. Yes, the rise of the microgrid market presents opportunities, but it introduces many challenges as well.
Challenges of the Evolving Microgrid Market
Although this is starting to change, for the most part utilities are natural monopolies that are – by necessity – slow to change and adapt. Learning how to manage an increasing rate of change is at the heart of the microgrid-related challenges that utilities now face. Here are a few examples:
- Increased competition – distributed microgrids can sell wholesale power, taking load and revenue from the local utility.
- Integration costs – utilities must figure out how to integrate into the microgrid market, something that is easier said than done due to evolving business models and technologies.
- New regulations – microgrids necessitate new regulations that utilities must adapt to.
- Evolving customer expectations – microgrids offer demand flexibility that customers will grow to expect.
Despite these challenges, the microgrid market is not something that utilities can ignore. These small, distributed generation assets will need to be integrated into the overall energy market whether electric utilities like it or not. Electric utilities would be wise to get ahead of the curve on this.
Luckily, it’s not all doom and gloom. Once the inevitable integration takes place, utilities will enjoy greater flexibility, supply redundancy and system resiliency, all of which should make emergency planning easier, outage durations shorter, and restoration efforts more efficient.
It won’t happen overnight, but I do believe the emergence of a ubiquitous microgrid market will ultimately improve emergency preparedness for electric utilities. I have no idea how long this process will take to fully consummate, but I hope that it happens within my lifetime!
