The Real Ambition of Microgrid

District Energy

Dirk van Ouwerkerk, Lead Partner, Anbaric Microgrid

Originally appears in International District Energy Association’s District Energy, Third Quarter 2016

The topic of microgrids has been punching above its weight for a while now. The sheer number of articles, conferences and studies on microgrids is overwhelming, but their deployment is still limited to a handful of campuses around the nation. If they’re such a niche application, what’s behind the hype on microgrids?

In the good old times, utility companies managed the entire grid, and it has to be said that they did a pretty good job. Electricity is a crucial product, and the utility brought it to us cheaply and reliably. Then everything changed, and now the power industry has become so complex that few understand what’s happening  between deregulation, clean energy policies, new energy markets and new technologies. The microgrid is in no small part a hype because it somehow promises to bring an organizing principle to that chaotic world. However, there’s more to it.

The underlying current in all new energy trends is that scale no longer drives efficiency. Similar to what happened in computing and communications, small energy resources are becoming cleaner, cheaper and more reliable while most of the larger power solutions lose their comparative advantage. In addition, the flexibility of small resources makes them more adaptable to a rapidly democratizing decision-making process in communities; their distributed nature makes decisions about them more distributable too. As a result, communities everywhere are clamoring for more distributed energy resources. Why can’t they benefit from all these apparent advantages seen elsewhere? What’s taking the industry so long to make it happen? This is where the microgrid’s real ambition comes into play.