The secret to the microgrid market (Hint: reliability)

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Quick Take: I recently told you about a company merger that suggests microgrid-as-a-service may soon take off. Now I would like you to know about a thoughtful article by Katherine Tweed. She points out that reliability may be the key to the market upsurge we've all been waiting for. -- Jesse Berst

"You can't throw a stone at a smart grid conference these days and not hit a panel talking about microgrids," writes Katherine Tweed in a recent piece in The Energy Collective. "The chatter is incessant, but the actual work done to date has been far more limited."

Tweed points out that despite all the noise, only a few actual installations are underway and those are mostly at universities. Why the slow uptake? In the U.S., the price of power is relatively inexpensive, making it more difficult to cost-justify a microgrid (especially when you consider the extra risk you are taking on with a largely unproved technology).

But superstorms such as Sandy have brought increased attention to the issue of reliability. And it is that aspect of microgrids that may finally cause the market to take off. That is especially true overseas, where many regional grids lose power several times a day, forcing businesses to have some kind of backup power to maintain operation.

In the end, it may be a combination of factors that converge to achieve liftoff, including:

  • An increasing appreciation for the value of reliability
  • An increasing desire for self-sufficiency (this is a major motivator for the Department of Defense)
  • The ability to tap into demand response markets (get paid for running the microgrid on its own for brief periods when demand for power is very high)
  • Community choice aggregation, which is gradually gathering momentum (a microgrid might be a way to deliver the power to the community)

 

What do you think? Use the Talk Back form below to comment.

 

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Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.