Microgrids offer answers to some of the most important questions facing the electric industry as it undergoes a technological tsunami, said Microgrid 2017 keynote speaker, Anne Pramaggiore, president and CEO of utility giant Commonwealth Edison.
Held in Boston, the Nov. 6-8 event attracted more than 460 participants, making it the largest microgrid event yet, with nearly triple the attendance of Microgrid Knowledge’s conference last year in New York City.
Pramaggiore drew applause from the audience Tuesday after she described how utilities will upend their own business model and why microgrids will emerge “as a defining infrastructure.”
She provided perspective by tracing the history of the U.S. electric grid back a century to Samuel Insull, an early president of the company and a leader in creation of today’s electric utility model. At the time, the model was revolutionary; it allowed for electric delivery at lowest cost to the most people through centralization. A fragmented and volatile industry became one that offered predictability through regulation.
“Today our company and many others are standing on the front edge of another stunning development,” said Pramaggiore, head of ComEd, a Chicago-based utility that is a subsidiary of Exelon. “In effect we are turning our own foundation upside down.”
“By virtue of a technological tsunami we are returning to a more decentralized system, and at the same time turning more and more of the industry over to competitive forces, trading economies of scale and predictability for economies of scope and consumer choice,” she said. “Only this time it won’t be the disorganized anarchy that it was before Insull came on the scene. Instead, better technology, better models, smarter systems will enable what we call a convergence of the best of both the 20th and 21st century.”
The industry must become “cleaner, leaner, smarter, more customized and secure,” she said. Microgrids are an “essential ingredient in this energy revolution.”
“And this is a revolution. They don’t come around often but we are in the midst of one right now. It is sometimes called the third industrial revolution. It is sometimes called the fourth industrial revolution. Whatever you name it, the convergence of digital communications technology and energy technology, and its smartphone, smart tablets, smart platforms and smart grids, is reinventing the way we work, communicate, shop and socialize,” she said.
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Because microgrids are “smaller scale and localized they allow the kind of low risk, high upside experimentation this moment requires,” Pramaggiore said.
“Microgrids will allow us to find answers to some of the most important questions facing our industry. How do we make the entire system more resilient? How do we integrate cleaner and more distributed forms of energy? How do we develop new services and technologies that offer the kind of choice and customization that abounds in other markets? And how do we create laboratories that allow us to experiment without putting our most crucial system at risk?” she said.
Rise of microgrids, demise of grid?
Does the rise of microgrids signal the demise of the central grid, as some predict?
“To this chorus of the disconnected, I simply paraphrase Mark Twain: ‘Reports of the grid’s death are greatly exaggerated,'” she said.
Instead, utilities will transition from acting as pipelines to acting as platforms, she said. Pipeline business models are linear pushing mass production through lines of distribution.
“That is not how most companies function anymore, not in the era of the smart phone and the Internet, the age of Ebay, Facebook, Uber and Airbnb – each of them platforms that provide architecture for people to interact, move, rent, buy, sell and work. Simply put, platforms are the dominant business model of our time, with over half of the 100 largest companies in the world, earning over half of their revenue from a platform,” she said.
Wireless and telecommunications networks offer the most iconic examples of the value of networks. And the electric grid is just “one big network connecting people, homes, schools, hospitals and virtually anything or anyone that require power, which in our modern economy means everyone and everything.”
Rob Thornton, IDEA president & CEO, described Pramaggiore as an “enlightened utility executive.”
She added that “in a world where each and every household can be its own personal power plant, where there are more electric vehicles on the road, and where power is coming to and from many different places, where communities can create power eco systems and where microgrids emerge as a defining infrastructure, the grid becomes more important not less.”
Commonwealth Edison envisions developing microgrids that protect essential infrastructure like police facilities, pumping stations and health and education centers.
“The advantages grow when you create a microgrid cluster, as we are working on in our Bronzeville neighborhood on the south side of Chicago. The idea is to connect a series of microgrids to one another so that they can serve a larger geographic area, share resources in the event of major problems and modernize the distribution system all at once,” she said.
The Bronzeville microgrid is designed to connect to a microgrid at the Illinois Institute of Technology by way of a multi-microgrid controller that Commonwealth Edison designed with a U.S. Department of Energy grant. The $25 million Bronzeville microgrid project is undergoing review before the Illinois Commerce Commission.
Addressing the audience at Microgrid 2017, Rob Thornton, president & CEO of the International District Energy Association (IDEA), described Pramaggiore as an “enlightened utility executive.” Her remarks evoked a loud round of applause from the audience.
Microgrid 2017 was hosted by Microgrid Knowledge, IDEA and the Microgrid Resources Coalition.