The sales pitch is wrong.
how microgrids today are selling themselves short
The common rhetoric around the value of microgrids today is fundamentally flawed, and is hampering the growth and evolution of this essential innovation.
“Microgrids” — localized networks of distributed energy generation, storage, transmission, and intelligent control that can operate independently of the traditional power grid — are a promising piece of the future energy puzzle. The benefits of these systems are plentiful: the ability to effectively integrate greener energy sources like solar, wind, and CHP into the grid, lower overall energy rates for consumers, independence from private utilities, more consistent and higher quality power that may be critical for sophisticated consumers, and improved resiliency in the case of outages.
Despite these benefits, the barrier to develop microgrids in cities remains prohibitively high; the upfront investment is out of reach for municipal governments without huge innovation budgets or state subsidies, as in New York City. An important factor in combatting this barrier to entry is that microgrid practitioners of all walks can unite around a common and clear value proposition. Today, a quick Google search for reputable publications on the topic reveals that the headline value proposition is that of RESILIENCE. Two pertinent examples: a report from Siemens, a major player on the supply-side of the microgrid market, and this implementation guide for city mayors, developed with the City of Boston. Make no mistake — the issue of power grid reliability in an era of increasingly frequent natural disasters is critically important, especially for the most vulnerable coastal cities. But grid resilience should not be the primary driver of microgrid development in 2016.
Only 43% of US homes are at high risk of natural disaster damage, based on geography. The 2015 RealtyTrac report that produced this figure is a good proxy for the portion of the country’s urban development that is especially prone to power outage. Of course 43% is substantial, but the full potential of microgrid technologies will not be realized if their value proposition only resonates with ~43% of city decision makers and investors. Overall energy conservation, reduced GHG emissions, and lower energy rates are important to all US cities, regardless of their location. These are the issues that should headline the rhetoric around microgrid development, and indeed this is where microgrids truly excel.
In order for the cycle of increased investment, widespread adoption, and technological advancement to continue to accelerate, it’s necessary that microgrids’ value proposition is closely aligned with a universal and growing urgency for sustainable urban development and energy.
Sources:
Microgrid Knowledge (2015). A GUIDE FOR MAYORS AND CITY LEADERS SEEKING CLEAN, RELIABLE AND LOCALLY CONTROLLED ENERGY. Retrieved from http://www.bostonplans.org/getattachment/5be6cac4-5dbd-42a2-b904-475e95a7782e
Siemens (date unknown). CASE STUDY: MICROGRID INFRASTRUCTURE PROTECTS NEIGHBORHOODS FROM POWER FAILURE. Retrieved from http://w3.siemens.com/topics/global/en/sustainable-cities/resilience/Pages/microgrid-infrastructure.aspx
RealtyTrac (Sep 2, 2015). 43 PERCENT OF U.S. HOMES WITH AN ESTIMATED MARKET VALUE OF $6.6 TRILLION IN COUNTIES WITH HIGH NATURAL DISASTER RISK. Retrieved from http://www.realtytrac.com/news/realtytrac-reports/realtytrac-2015-u-s-natural-disaster-housing-risk-report/
