Why Microgrids? It’s All in the Name

Sept. 21, 2017
Microgrids enjoy a certain “cool” factor. People like microgrids; they like the name. It has an inherent appeal to consumers even if they don’t fully understand what’s under the hood. In three syllables, the name says a lot: something small (micro) with power (grid). The public gets this concept; they have iPhones.

When Steve Jobs released the first iPhone ten years ago, Bloomberg predicated only “a few gadget freaks” would find it appealing. Bloomberg wasn’t alone. Many other reputable analysts failed to foresee the iPhone’s appeal and how this small device would redefine markets.

Who knew a little box could do so much – be a phone, but also a banking device, a news feed, a library, a camera, a stereo, a television. Who knew it would make paper maps near obsolete? Who knew the masses would like it so much?

Today’s microgrids are analogous to the iPhone in many ways.

First, both are small units and can do a lot. Just as an iPhone (or Android) is a phone but more, a microgrid is a power generator but more. Microgrids create shelters in a storm. They can manage energy pricing, guard against cyber threats, orchestrate a myriad of energy resources, provide grid services, store energy and save energy. They can enable renewable energy use on the grid and reduce carbon dioxide .

Here’s another similarity between the two. What would an iPhone be without the web? Not much. And what would a microgrid be without a connection to a larger central grid?

True, microgrids offer a lot of value as standalone energy providers during a power outage. But when the grid is working fine – most of the time — the microgrid is connected to it. The connection allows microgrids to offer customers serious benefits, such as pricing arbitrage, revenue, and savings on utility bills.

The “cool” factor and why it matters for microgrids

The parallels between the iPhone and microgrids continue: among them, and not to be underestimated is the “cool” factor each embodies. People like microgrids; they like the name. It has an inherent appeal to consumers even if they don’t fully understand what’s under the hood of a microgrid. In three syllables, the name says a lot: something small (micro) with power (grid).

This idea of small, connected objects with great ability appeals to contemporary consumers. They are familiar with the concept; they have iPhones.

Why should the microgrid industry care about mainstream appeal? After all, microgrids aren’t sold to households, at least not many, not yet. Buyers are mostly institutions, like the military and colleges, or utilities, business parks and manufacturers.

In truth, what the public thinks can greatly influence how energy markets evolve. It has to do with the somewhat unique way government influences the electric power industry. While many industries see regulation as an impediment, in electric power regulation often drives new markets. Consider how state renewable portfolio standards spurred growth in solar and wind, or how industry restructuring opened up markets for independent power companies (and some would argue even gave rise to today’s proliferation of innovation in energy.)

Mayors, governors and legislators take notice of what their constituents like and act accordingly. Look at the policy support from across the political spectrum for green energy. It stems, at least in part, from the poll after poll showing that the public values ‘green.’

In addition, products with mass appeal are more likely to have early champions. Microgrids have their own Steve Jobs, in fact many of them. Check out our Microgrid 2017 conference and see who is participating. You’ll find the names of major international energy and infrastructure, large utilities, and well-known competitive energy supply companies and engineering firms. The microgrid industry is still small, but many of its champions are not.

What will be energy’s paper map? Find out at Microgrid 2017

“You never know where you are until you are in the future and look back and say, ‘Ah ha,’” — Kevin Self, Schneider Electric

So how can we expect microgrids to influence markets? How fast will they take hold? What will they make obsolete?

“Industries go through S-Curves. New industries are formed and there is a lot of hype and interest upfront. But it takes longer than people anticipate for the shift to start happening, for the change to start occurring. But once that shift does start occurring, it happens faster than anticipated. You never know where you are until you are in the future and look back and say, ‘Ah ha,’” said Kevin Self, senior vice president of strategy, business development & government relations at Schneider Electric.

Self will be one of the guest speakers at a plenary panel,“Accelerating a Microgrid Market – How Do We Get There From Here,” at Microgrid 2017 in Boston on November 7, and these will be some of the ideas we will explore. Please join us in the discussion about the big changes ahead.

For the full agenda and registration details, go to Microgrid 2017.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

Twitter: @ElisaWood

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