Freeing microgrids from ‘fences’

Nov. 28, 2022
Think Microgrid urges the DOE to focus on multiproperty microgrids

Building a microgrid for your operation is a relatively straightforward process in the US. But try to let your neighbors tap into the microgrid and the nightmare begins.

Multiproperty microgrids are difficult, if not impossible, to build in many places because they cross utility rights-of-way. California calls the prohibition the “over the fence rule.”

So, not surprisingly, multiproperty microgrids were a big part of the discussion in comments that Think Microgrid filed last week with the US Department of Energy (DOE).

An education and advocacy affiliate of Microgrid Knowledge, Think Microgrid was responding to the DOE’s request for input on its vision to make microgrids “essential building blocks” of future electric delivery, which the agency laid out in seven white papers.

Think Microgrid focused on white paper #7 that looks at regulatory and business models to encourage microgrid deployment.

So what needs to be done?

Don’t assume state regulators understand microgrids

First, Think Microgrid said it backs the DOE’s idea of offering regulators more education and technical assistance when it comes to microgrids.

“Regulators are busy and commissions are often understaffed. In many cases investigations into emerging technologies like microgrids can be complex and burdensome. In this context, the importance of providing educational resources to utility regulators and staff cannot be understated,” Think Microgrid said in its comments.

Think Microgrid also favors plans by the DOE to advance research and development of multiproperty microgrids, given that they “present a complex spectrum of technical, regulatory and business model barriers while potentially offering the greatest overall system benefits.”

What’s not working in California?

In addition, the organization urged regulators to look at state multiproperty microgrid policies that may not be working. In particular, the organization cited California’s attempt to create rules that support the commercialization of microgrids, as directed in state law SB1339.

“California SB1339, which directs the California Public Utility Commission (PUC) to develop policies and programs to support microgrid commercialization, has not yet resulted in the significant microgrid deployment originally anticipated,” Think Microgrid said.

Some parties believe utilities have delayed progress in California, particularly because of concerns about their ability to recover expenses in rates. “It is possible that more clear and firm rules from the PUC ensuring cost recovery for microgrid-enabling grid investments may have supported a more robust implementation of SB1339,” Think Microgrid said.

“While this is only one example, the cautionary tale that California’s SB1339 implementation provides is mirrored in other states. A comprehensive review of not only the successful programs but also the challenges, we believe, would strengthen DOE’s R&D,” Think Microgrid wrote.

Move away from the ‘one-off’ approach to microgrids

The DOE says in the white paper that it wants to develop frameworks that allow regulators and developers to move away from “one-off” projects.

The microgrid space has no shortage of pilot projects. Think Microgrid said such projects do not drive wide-scale deployment of microgrids. But sharing lessons learned from the pilots could help.

“Commissions across the country have approved numerous utility pilot microgrid projects reflecting diverse geographies, community needs and grid reliability performance. Presumably, each project has led to important lessons that would help the industry realize greater benefits from microgrids,” Think Microgrid said.

Leverage demand flexibility with microgrids

Resilience is the key reason to install a microgrid, but it’s not the only reason. Microgrids also can provide demand flexibility, which allows them to participate in demand response programs and offer other grid services. In providing these services, microgrids realize revenue streams that can offset their costs.

The white paper proposes exploring such grid services in the future, but Think Microgrid recommends that the DOE do so sooner, noting that microgrid developers are rapidly expanding into providing grid services.

“For example, in September 2022 Think Microgrid member Sunnova petitioned the California PUC to be granted ‘microutility status’ (Docket No. A.22-09-002). Under this proposal, the company would build, own and operate grid-connected microgrids, providing tariffed wholesale ancillary services and demand response to CAISO [California Independent System Operator] and regional distribution grids.”

More details about the DOE’s strategies and the white papers are available from the DOE Office of Electricity.

Do you have a story to tell about microgrids? Microgrid Knowledge is seeking speaker applications through Dec. 21 for Microgrid 2023: Lights On!, which will be held May 16-17, 2023, in Anaheim, California.

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, 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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