Communities are showing an increased interest in microgrids, which can more easily integrate renewable energy resources and react to extreme weather events. At least that’s according to a new report from the Smart Electric Power Alliance (SEPA) and the Electric Power Research Institute (EPRI), “Microgrids: Expanding Applications, Implementations, and Business Structures.”
“The disruptions caused by Hurricane Sandy on the East Coast amplified the need for greater grid resiliency,” said Nadav Enbar, EPRI principal project manager and co-author of the paper. “As part of EPRI’s Integrated Grid Initiative, we are looking at the capabilities and limitations of microgrids as well as their costs and benefits,” he said.
The report is a guide to microgrids and the basic ownership and business models, party, utility and, more recently, a hybrid model, that are driving their growth. The report stated that until recently a large portion of microgrids were owned by third-parties and serve a single customer. Now, utilities are starting to own and develop some microgrids, largely thanks to state- level policies and directives as well as the maturation of technologies like energy storage and renewable energy. A small number of hybrid, “unbundled” microgrids are also emerging where customers own the electric generation or distributed energy resources (DERs) but utilities own the electric distribution.
“What we are seeing is a proliferation of microgrids designed for specific operational, regulatory and financial landscapes,” said Ryan Edge, SEPA program manager and report co-author. “Our study of the different microgrid business models is aimed at supporting and expanding this diversity—and the increasing integration of DERs these systems can make possible.”
The growth of microgrids may also help increase the flexibility and capabilities of DERs in microgrids, according to SEPA. But it explained that costs and benefits still need to be considered.
Since the microgrids are still new and diverse, monetizing a project’s potential value streams remains complicated. SEPA said clarity on price signals, rate structures, and regulations are still needed for the sector to expand and to make microgrids investment worthy.Tweet