Gregg Morasca of Schneider Electric explores how organizations in the western United States are addressing climate change by undertaking the necessary and urgent introduction of microgrid solutions.
The last year has brought a sense of reevaluation to the world, with both individuals as well as businesses pausing to take stock of what is critical, and what new practices or habits we should implement for newfound success.
One area where this sense of reexamination hasn’t yet reached its potential is in energy resiliency, reliability, and, most importantly, consistency throughout, following and thereafter an unexpected event. In today’s world, these events are no longer reserved for equipment failure and weather-related disasters – they now extend to cybersecurity threats, like the recent Colonial Pipeline ransomware event.
Alongside natural changes altering our approach to energy management over time, society has become increasingly reliant on electricity to live their daily lives. More widespread need for heating and cooling in addition to our increased need for data, entertainment and electric vehicles will only foster greater demand. As innovators look to reduce the use of fossil fuels, reliance on electricity will continue to increase, and a resilient supply in response to this demand is required to make that a reality.
New resiliency solutions are needed far and wide to support the country’s energy infrastructure vulnerabilities and additional megawatt usage, as well as to avoid planned service disruptions. Solutions driven by the philosophy that the future will only become more electrified – and our society more reliant on uninterrupted access to electricity – are a necessity to ensure both supply and reserve are adequate to meet total demand from customers and reduce interruptions and limited access to energy, while remaining environmentally sustainable.
West Coast leading the charge
We have seen the catastrophic impact that can occur when a grid fails and reserve systems are determined inefficient with, for example, the winter storms in Texas earlier this year. These types of events are a sobering look into the future of what can happen if the increasing reliance on electricity isn’t adequately assessed, planned for and addressed at the state and national level.
States such as California and Washington have begun to act on this urgent, growing need, and are implementing a variety of policy and infrastructure enhancements. California aims to eliminate greenhouse gas emissions by 2045, driving the need to install more energy storage. While the state is just at the starting gate of battery storage capacity, it is setting a precedent by adopting more batteries to back up wind and solar power – the foundation of energy storage for the grid or a microgrid – intending for 10 times more battery energy storage available than last year. California also introduced policy and market-design changes last year, while adding 3,000-4,000 MW of production to its electrical grid this year to prevent repeat rolling blackouts before they occur. Washington has also been leading by example by implementing a myriad of climate and energy policies, including The Clean Energy Transformation Act to reach carbon neutrality and address utility business-model reform, HB 2042 for transportation electrification and EV tax incentives, and the comprehensive Climate Commitment Act designed to deliver emissions reduction and cultivate critical co-benefits that foster a more prosperous and resilient state. While these steps will help to address some of the historic grid issues California has faced during the summer months and that Washington seeks to avoid, there is additional action that states, and the US as a whole, must take to drive climate action and prepare for the future needs of the grid.
Western states obtain power from neighboring states within the Western Electricity Coordinating Council (WECC), which also provides additional resources during a peak weather or grid event. However, with temperatures rising, last summer saw an interruption in resource sharing as the Southwest and Pacific Northwest needed to utilize their backup resources locally to address increased power usage from residents and businesses.
Municipalities that are required to rely on importing electricity from surrounding areas by state independent system operators (ISO) are likely to continue to see increasing shortages of these shared resources as summer temperatures continue to rise and drive up electric dependency and demand in new areas. What was a stopgap solution is no longer solvent, and state and federal government agencies owe it to their local constituents to create reliable, long-term solutions for their electrical needs.
It is a must that the United States increases the pace on implementing smarter, cleaner energy solutions to address and mitigate these risks in service consistency. This starts with three key areas: decarbonization, digitalization and decentralization — upon which the future of electricity resilience and sustainability will be built. While the need for lowering carbon emissions (decarbonization) is well understood – in fact, over 50% of Fortune 500 companies include lowering carbon emissions in their current plans – the opportunities found in decentralizing and digitizing power generation are yet to be completely harnessed.
Powering on communities
Not unlike other organizations that have undergone recent digital transformations to keep pace with the speed of global business, so must the energy industry. With regulation and policy changes, the introduction of renewable energy alternatives, and the cost and time dedicated to the upkeep of generations-old equipment – the energy industry is being faced with new, complex problems that traditional infrastructure cannot solve. As the “electrification of everything” continues to drive forward, an increasingly complex energy system will require more sophisticated tools for management.
This digital evolution not only targets updating the equipment needed – tools that will provide remote capabilities like monitoring and predictive maintenance, increased grid stability and more adequate protection against cybersecurity concerns – but also the introduction of new energy business models and technologies to democratize access to clean, reliable energy. This requires smart equipment and real-time data results to create financially and environmentally sustainable road maps to convert electric consumers to electrical prosumers able to individually manage creation of power and author critical and routine response processes by transitioning to a microgrid solution.
Business owners, local governments and critical facility managers concerned with energy reliability are now seeking control over their energy, increasing on-site ownership when it comes to power generation and storage. This shift is leading to a decentralization of the traditional power grid, with investments in wind, solar and batteries enabling localized, on-site energy, storage and consumption. This trend has accelerated in the last few years because of shrinking costs for adoption, increased consumer focus in low-carbon energy sources, as well as the rise of new, mobility-first infrastructure paving the way for new solutions. In addition to the increased usage of renewable energy, decentralization of all electric generation leads to more efficiency (by eliminating losses due to miles and miles of transmission and distribution lines) and thus greater sustainability.
These emerging megatrends will drive more efficient, reliable, sustainable electricity – which is critical because the Energy Information Administration forecasts electricity demand will nearly double in 2050 from 1990, while we need to consistently cut carbon emissions in half.
Democratizing access to energy via microgrid solutions
Considering these megatrends, energy-as-a-service (EaaS) provides a significant business model to address the need for more decarbonized, decentralized and digitized electricity. Microgrids are a key technology piece within the EaaS platform. Microgrids are inherently decentralized, meaning they create, store and distribute energy locally. When the main grid goes down, energy generated on-site is available to provide resiliency for critical loads. This reduces disruptions and the financial burden of a prolonged outage.
EaaS transfers the risk of owning, installing, managing and financing energy from an individual business to a third-party expert. The “as-a-service” model provides an outcome-based solution that addresses energy needs and supports the development of digitally enabled infrastructure projects that meet the growing need for sustainable investment in critical assets and services.
This type of forward leaning business model facilitates accelerated adoption of resiliency solutions, especially with organizations with CAPEX restrictions, as EaaS agreements are OPEX based, providing critical support to necessary assets, making sustainability and energy a strategic advantage for clients through microgrid solutions that involve no complexity, risk or upfront costs to the client.
The formalized future of microgrids
Schneider Electric has worked closely with a variety of local and governmental organizations, including Marine Corps Air Station Miramar, resulting in a fully tested microgrid solution that provides additional, uninterrupted power to critical infrastructure on the base and allows the base to become entirely self-reliant, in real-time, to take strain off the local grid and ensure secure, customized access to its on-site energy generation.
Introduced earlier this year, the Making Imperiled Communities Resistant to Outages with Generation that is Resilient, Islandable and Distributed (MICROGRID) Act is designed to encourage governmental and nonprofit groups to implement microgrid infrastructure to prevent grid fails and safety-related power shutdowns via tax credit for qualifying properties, incentivizing the expansion of microgrids at the local level. Schneider applauds Congressman James Panetta and his staff on this critical piece of legislation and is working to build support for its passage in Congress.
With energy consumption and prioritization of uninterrupted access to electricity increasing across the country, the MICROGRID Act is primed for this moment in time. The cost and operational knowledge requisites are being addressed by EaaS solutions, and tax incentives will further lower barriers to entry.
The benefits of microgrids are many, and this is just the beginning in bringing resiliency to the next level for our country. Microgrids increase resiliency while also addressing sustainability goals. With EaaS, the risk is taken off the facility owner and taken on by firms that specialize in designing, building, operating and maintaining microgrids. Leveraging progress plus policy along with outcome-based business models to add sustainable, customized microgrid solutions to power systems is the next step in the US’ energy transformation process and is leading the future of sustainable energy consumption.
While organizations in the West have already begun to undertake the necessary and urgent introduction of microgrid solutions for more sustainable uninterrupted access to electricity, there is still capacity for others to follow suit. As regional and national efforts to transform existing infrastructure into sustainable energy production gain priority, and awareness of the financial support – and savings – these solutions provide spreads, the optimal solution of microgrid systems will facilitate the country’s greener, more resilient future.
Gregg Morasca is vice president of strategic customers and microgrid content, smart grid at Schneider Electric.