On June 20, the height of last month’s heat wave in Texas, market prices jumped to $4,000/MWh, enticing operators of fast-acting microgrids to take advantage of the high prices and help keep the strained grid operating.
The market worked, said Allan Schurr, chief commercial officer for Enchanted Rock. The Electric Reliability Council of Texas (ERCOT) market attracted distributed resources when supplies got tight. ERCOT’s scarcity pricing mechanism changed every five minutes based on forecasts of supply and demand and climbed to attractive highs.
Microgrids provided hundreds of megawatts to the gridIn response to those prices, on June 20 Enchanted Rock provided about 230 MW of microgrid power. The company had 600 generators in service, and 95% of them were available to respond to the pricing signals.
Not only did the microgrids serve the grid, but they also provided resilience at customer sites that experienced power outages sparked by high temperatures, said Schurr. About 20% of Enchanted Rock’s customers in Texas experienced power outages between June 21 and June 27. In many cases, they were because of overheated equipment. The microgrids provided resilience to all of those customers.
Real-time pricing and incentives for microgrids needed
Texas and other states nationwide need “more of what worked” in Texas to avoid future grid emergencies, Schurr said. Enchanted Rock and other microgrid developers said that states need real-time pricing, incentives for microgrids, regulatory changes and equal access to price signals from grid operators.
“More distributed energy resources (DERs) and microgrids will meet the needs of fast-ramping capacity,” said Schurr.
During weather emergencies, microgrids provide unique attributes sought by grid operators. They provide reliability, come online quickly and often are cleaner than traditional peaker plants. “They’re fast responding,” Schurr said. “They don’t take multiple hours to come online. Sometimes grid operators don’t have that time.” And microgrids are based on local resources, which avoids transmission challenges.
Sometimes grid operators view DERs as cumbersome to manage, said Schurr. But they can be managed as a portfolio rather than as a number of individual resources.
Texas food and beverage industry is looking to microgrids
Texas is seeing more and more microgrid installations, especially in the food and beverage industry. For example, Ben E. Keith Company plans to install a natural gas-fired microgrid for a beverage distribution facility to ensure resilience during outages.
The food industry is especially vulnerable to power outages because food requires cold storage. In addition, industry facilities are highly automated, and outages as short as five minutes can cause long and expensive production delays. Sometimes processing plants need to be shut down and thoroughly cleaned each time they lose power, even if it’s only for a few minutes, to ensure food safety.
Microgrids are coming through during weather emergencies, but Texas and other states need to do more for DERs and microgrids, industry members say.
But passing pro-renewables and pro-microgrid legislation in Texas isn’t always easy.
A pro-microgrid bill passed in Texas despite renewables opposition
During the most recent Texas legislative session, bills included numerous anti-renewables efforts that, if passed, would have made it difficult to develop solar energy, wind energy and microgrids.They did not pass, and one bill made microgrid supporters happy. The Texas Legislature May 29 passed SB 2627, which will provide $1.8 billion in grants and incentives for microgrids and electric vehicle (EV) bus batteries, with a goal of boosting energy resilience during climate change driven harsh weather.
Creating resilient community hubs with microgrids
In addition to providing such incentives and policies, state and local policymakers should also focus on creating energy resilient shelters for community members, said Jana Gerber, Schneider Electric’s North America microgrid president.
These can be established in public buildings such as libraries or at company sites. For example, the city of Oakland, California, is looking at designating local libraries as shelters. As part of a grant project, Schneider wants to make local libraries shelters during storms using EVs as microgrids. Schneider’s grant is for a vehicle-to-building project.
“We’re looking at taking electric transit buses in Oakland and creating a connection to the library that would create an in-the-moment microgrid,” said Gerber.
In Tigard, Oregon, – a suburb of Portland – an ambitious plan calls for a microgrid concept, or series of microgrids, to supply power to a bridge, a library and an industrial district, with a main goal of protecting citizens from outage threats associated with wildfires, storms and earthquakes.
That plan wouldn’t just create sanctuaries for residents. An additional benefit: The microgrid project may attract sustainability conscious businesses to an industrial district that features a microgrid.
Companies and military installations that install microgrids can also provide shelters and help create resilience for local communities – and get paid for it, Gerber said. The pay can be through markets or individual contracts with utilities.
Miramar Air Station gets paid by utility for microgrid power
In one unusual arrangement, Marine Corps Air Station (MCAS) Miramar in November 2022 signed a contract with its utility to get paid for its microgrid power.
The California Public Utilities Commission gave San Diego Gas & Electric (SDG&E) permission to recover costs from ratepayers for power secured from MCAS Miramar’s microgrid.
SDG&E inked the agreement with the air station out of concern that it would come up short during the summer of 2021 if the grid were under strain — which did happen.
As climate change drives extreme weather, new markets and business models supporting DERs and microgrids are expected to materialize, yielding “more of what works” during bad weather events.
“It just amazes me how much the market and business models will continue to change as we leverage more of this energy freedom,” said Gerber. “We’re owning our energy future, as individuals and corporations.”