Biggest Stumbling Block to Microgrids? “We’ve Always Done it that Way”

May 8, 2018
What is the biggest stumbling block to microgrids? It’s no longer cost or financing or technology. Instead, the problem is more human centric: Fear of change.

What is the biggest stumbling block to microgrids? It’s no longer cost or financing or technology. Instead, the problem is more human centric: Fear of change.

That’s one of the insights Schneider Electric’s Kevin Self offered in an interview leading up to Microgrid 2018, underway this week in Chicago.

Kevin Self, Schneider Electric

Self, senior vice president strategy, business development & government relations, is part of a team at Schneider educating customers about energy-as-a-service, a model becoming increasingly popular in the industry because it de-risks microgrids for customers. Customers accrue the benefits of a microgrid without making a large upfront capital expenditure. A third party owns and operates the unit.

Similar outsourcing approaches have stimulated markets for solar and energy retrofits, and Schneider hopes it will do the same for microgrids as distributed energy undergoes what Self described as exponential growth.

But it’s not slam dunk – and a lot of education still needs to be done.

“We’ve managed energy in this country in a similar fashion for 140 years,” he said. So introducing new models “takes a bit of time.”

Some customers fear giving up control of energy management, he said. Yet, he noted, they will do so for other areas of their business, outsourcing services that detract from time spent on their core competencies.

For example, college campuses often hire third parties for food services. “So why would they feel compelled to run their energy? It’s because they have always done it that way,” he said.

Despite fear of change, other motivators are tipping campus and corporate decision-makers toward microgrids and other smart energy technologies. A big one, he said, are goals they’ve set for carbon-neutrality or sustainability.

“In 2017, 84 multi-national companies committed to 100 percent renewables, up 58 percent year-over year,” Self said.

These companies, as well as communities, universities and others that responding to customer demand – their customers want them to go green.

Tech giants, like Amazon, are now seeking out locations for data centers with access to renewable energy as a key condition in the selection process. Some have goals to make renewables 100 percent of their electric supply. So green energy development is becoming an economic development play for governments.

“It is becoming a market issue. If states want to compete for economic growth, my hypothesis is that they are going to have to look at this closely,” he said. “We have that beginning with the big corporates and I believe it will trickle down now more quickly to other companies.”

Sustainability has become a priority for many college campuses, as well. They want to be good world citizens – and students expect it of them. So their use of green energy becomes a recruitment tool. But sustainability come at a cost, especially for campuses that can have anywhere from 50 to 1,000 buildings, Self noted. Energy-as-a-service offers them a more cost-effective option.

“You start talking to them about how they can do energy differently. It’s an engaging conversation, but it takes time for them to get to the point where they are handing it all off,” he said.

So the energy industry finds itself running up against the peculiarities of human psychology as it tries to find ways to make it easier for customers to decarbonize and decentralize energy supply.

“It just takes a while,” Self said.  But once the dam breaks…”

What stumbling block to microgrids do you see? Respond below or on our LinkedIn Group, Microgrid Knowledge.

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

LinkedIn: Elisa Wood

Facebook:  Microgrids

Exploring the Potential of Community Microgrids Through Three Innovative Case Studies

April 8, 2024
Community microgrids represent a burgeoning solution to meet the energy needs of localized areas and regions. These microgrids are clusters of interconnected energy resources,...

Driving Resiliency Through Your Organization’s Energy Infrastructure

Leaders in large corporations, government agencies, and other organizations face numerous challenges in running their day-to-day operations. For them, energy – the lifeblood of...