Electrification and Microgrids
My business partner and I have been researching a number of major industries to better understand opportunities to accelerate transformation, specifically in healthcare and energy.
Energy has been fascinating to dig into and includes components that are often overlooked by the casual consumer. No one disputes the importance of creating better energy options for our country. The path there is a little less obvious. For example, when was the last time you thought about our power grid?
Turns out, most of the renewable technology is already developed however the cost and existing infrastructure (ie. the grid) are two major bottlenecks; the former dropping each year and the latter moving at a snail's pace. (This is in addition to government bureaucracy).
The infrastructure has to improve in order for renewables to truly blossom. More specifically, the electrification of the energy value chain and modernization of the existing grid.
In her book "The Grid," Gretchen Bakke provides a comprehensive look at the history, current state, and future of the electrical grid, emphasizing its complexity and centrality to modern life. The grid, as it stands, is an aging infrastructure, primarily built in the 1960s and 1970s, now under strain from increased demand and the need to incorporate renewable energy sources.
Electrification of the grid is essential because it provides the backbone for incorporating renewable energy sources such as wind and solar. Bakke points out the importance of transitioning to smarter grid systems that can manage energy flows more efficiently, optimize resource use, and quickly recover from outages.
One innovation in particular, microgrids, will play a significant role in this transition. They are localized grids that can operate autonomously and disconnect from the main grid when needed. Historically, they were mainly deployed by the military and universities.
This feature is particularly useful during natural disasters or other disruptions, ensuring a continuous power supply.
The integration of microgrids into the larger grid system facilitates the use of renewable energy by providing flexibility and resilience at a local level. Microgrids can help:
improve electric reliability
Microgrids proved their worth during Superstorm Sandy in 2012, maintaining power for certain facilities while millions faced outages, some lasting weeks. They enhance electric reliability by operating independently from the main grid during failures, using their own generators and batteries to supply power to local customers until the central grid recovers.
enhance resilience/recovery
Energy resilience, closely tied to electric reliability, refers to the capacity to prevent or swiftly recover from power outages. This benefit of microgrids, highlighted since Superstorm Sandy, ensures crucial services remain operational during disruptions, with some systems designed to prioritize essential functions.
lower energy costs for consumers and businesses
Microgrids offer financial advantages by managing energy efficiently to reduce costs and by selling excess energy and ancillary services back to the grid, turning consumers into proactive energy 'prosumers'. They capitalize on fluctuating energy prices for economic benefit, contributing to both immediate savings and long-term cost planning.
improve the environment and promotes clean energy
Microgrids help businesses and communities reach clean energy targets by integrating various green technologies like solar, wind, fuel cells, and CHP plants. They manage the variability of renewables, ensuring a stable energy supply by automatically switching to different power sources as needed.
strengthen the central grid
A microgrid not only provides power to its users but also supports the wider electric grid. It enhances grid operations through demand response participation and ancillary services, alleviates grid stress during peak demand, and reduces line loss by generating power closer to where it's used. This efficiency reduces the need for new power plants and transmission infrastructure.
bolster cybersecurity
The 2017 global ransomware attack underscored the importance of cybersecurity. While the US power grid has yet to suffer a cyber-induced outage, the threat has prompted actions such as the adoption of microgrids for enhanced security. Microgrids, with their distributed design, offer resilience against cyber threats, allowing for continued operation even if one power source is compromised.
bring economic value to society
Microgrids bring economic benefits by preventing losses from power outages, drawing high-quality employers to areas with reliable power, and creating local jobs through their construction and operation. They ensure businesses continue operating during outages, saving costs that can range from $25 to $70 billion annually in the U.S. Microgrids also enhance local economies by keeping energy jobs within the community. Hence, they are increasingly included in regional economic strategies.
improve community well-being
Microgrids are increasingly used by communities to maintain power for essential services during outages, transforming areas into safe havens with access to necessities. They support critical infrastructure like hospitals and emergency services, and offer security for vulnerable populations. Examples include rural electrification in Africa and India, Princeton University's resilience during Superstorm Sandy, and Seton Healthcare's combination of reliability with sustainability through a CHP plant microgrid.
