Lessons from Microgrid Operators Relevant for the Utility Industry

It’s no secret that the development of microgrids is a growing trend, especially in places like California.  At a recent conference called “Microgrid California,” various microgrid operators presented case studies and lessons learned from their experiences over the last several years.  Given the growing impact of microgrids on the utility industry, I thought it would be interesting to take a peek into their experiences.

What the Microgrid Operators Have Learned

First off, as a reminder a microgrid is a self-sustainable energy generation source, typically supplying entities like universities, small communities and large company campuses, that can be islanded so that the entity served can remain operational even when the main grid goes down.  The new public safety power shutoff (PSPS) policy in California, which approves the use of planned outages in response to the wildfire crisis, has served to increase interest in microgrids across the state and elsewhere.

The conference was structured around projects, with microgrid operators and developers participating in a panel-based Q&A.  Featured projects included an installation at a large winery, a solar microgrid in Santa Cruz, an installation for a company called Bluehouse Greenhouse, a series of 8 installations in San Diego, and a microgrid upgrade project in the City of Berkely.  All the projects included elements of renewable energy, energy storage, and a “microgrid controller” to tie all the components together.

All told, the article I linked to above mentioned 10 lessons learned.  What follows is my abbreviated version which removes the obvious and/or generic ones.

1. A microgrid project is best viewed as a jigsaw puzzle due to the many interlinking components. And, a decision must be made regarding who will assemble the pieces – this can be done in-house, or outsourced to a full-service provider.
2. Ensure all suppliers can stand behind their warranties, as some warranties can span up to 25 years and it’s important to do your due diligence to be reasonably sure that the manufacturer will be in business that long. Similarly, small or startup companies may not have access to all of the financing options available to larger companies, so keep that in mind as well.
3. Weigh the pros and cons (or costs and benefits if you will) of being completely islanded or tied to the main grid.
4. Start the interconnection application process as early as possible, because approval can take a substantial amount of time.
5. Whenever considering a microgrid project, always try to calculate and compare the cost of building a microgrid to the cost of outages over time. This will help determine if the project is financially worthwhile.
6. Hire a financial consultant or expert to help you sort through all the project’s financing options.

In the final analysis, I think the microgrid operators had a lot of good things to say, and as key players potentially impacting our industry, it’s important to get a handle on their perspective.