Microgrids collaborate copasetically with distributed renewables, they guard against widespread blackouts, and they insure institutions against the losses those blackouts cause, so why aren’t they sprouting up everywhere?
A posse of microgrid developers pondered that question yesterday at the Microgrid 2018 conference in Chicago. Development can be slow because of planning, design and construction, they agreed, but the languor in microgrid development also has to do with a lack of understanding.
“It’s a simple discussion to get people excited,” said Michael Carlson, the president of Smart Grid North America for Siemens. “We can walk in and almost anywhere (people) are embracing the discussion—but moving forward there’s a lot of understanding that has to go along with it.”
1 Ignorance About Cost
A city Carlson declined to name wanted a completely green microgrid in a proposed development, he said. Siemens’ experts sat down with city officials, economic development officials and corporate leaders who had been working on the plan for some time. But then someone mentioned they wanted the microgrid “at or lower than the price I’m paying for power today.”
The city is in a region where power costs 8¢-9¢ per kilowatt hour, Carlson said, and a completely developed, sophisticated microgrid couldn’t promise to beat that price for electricity.
But customers who don’t understand the initial cost often don’t understand how the microgrid will ultimately save them money.
2 Ignorance About Revenue
Ameresco sells microgrids “under an energy savings approach,” said Michael Bakas, executive vice president for Ameresco’s Distributed Energy Systems. The capital cost of the microgrid is paid for over time by energy-demand savings, he said, as well as by revenue it may generate as an independent system operator selling power.
So the developer should anticipate two sources of support: energy savings and energy revenue.
“If we can drive it to a point where it’s an easy business decision, that will see them move along quicker,” he said.
Those cash flows can be invisible because they have little to do with the reason institutions pursue microgrids: resilience from power outages.
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