Agreement with Illinois’ Largest Utility Could Jump-Start Private Microgrids

April 19, 2018
In this edition of Industry Perspectives, Christie Hicks of the Environmental Defense Fund, sheds light on a new agreement with Illinois’ largest utility, ComEd, that may pave the way for private microgrids to use utility wires.

In this edition of Industry PerspectivesChristie Hicks, of the Environmental Defense Fund, sheds light on a new a new agreement with Illinois’ largest utility, ComEd, that may pave the way for private microgrids to use utility wires. 

Christie Hicks, manager, clean energy regulatory implementation, Environmental Defense Fund

Imagine you and your neighbors have solar panels on your roofs. You want to create a mini-power grid so that your neighborhood can operate solely on your panels’ electricity, even sending excess power from one home to another. And if there’s a storm that affects the main power grid, your homes can disconnect and stay powered.

This is the vision that microgrid proponents have promised for the past decade: small sections of the broader grid that incorporate rooftop solar and batteries, and can isolate from the grid as a whole when needed. Yet, this promise faces a major hurdle: The utility owns the wires that connect your homes and has an exclusive monopoly on that electrical infrastructure. This has driven most microgrid projects in the U.S. to either be completely “behind the meter” of a single customer, or owned and managed by the utility itself.

A new agreement with Illinois’ largest utility, ComEd, is poised to jump that hurdle to private microgrids. Working with Environmental Defense Fund (EDF) and the Citizens Utility Board (CUB), ComEd will begin a process this year to allow customers or third parties to develop and manage their own microgrid projects – working with the utility’s existing infrastructure rather than having to avoid it.

We have received lots of questions on how this will work. Here are your questions answered.

What is a microgrid?

A microgrid is a local energy system, connected to the broader grid or sometimes a subset of the grid. In the event of a power outage affecting the larger utility grid, the microgrid can separate and function as an “island” – i.e. it continues to operate and provide power to homes and businesses connected to the microgrid. This ability is often referred to as “islanding,” and it is what makes a microgrid a microgrid.

There is no defining set of characteristics for a microgrid’s size: It can be a single building, an entire campus or neighborhood, or even larger.

Learn more about EDF’s work on a microgrid tariff at Microgrid 2018’s panel: “How to Elevate Microgrids in Government Resilience & Climate Strategies”

Who can develop or own a microgrid?

To date, the overwhelming majority of microgrid projects are completely “behind the meter,” meaning they’re owned by and serve a single customer (like a military base or a university). These projects interconnect to a utility distribution system, but the utility does not own or operate any aspect of the microgrid itself. Princeton University’s campus microgrid is an example of this setup.

Another option is that the utility owns and manages all of the microgrid, such as ComEd’s Bronzeville project on the south side of Chicago. In some cases, including Bronzeville, solar panels and batteries may be owned by third parties, but are still controlled by the utility.

Because of the way utilities are regulated and how cities grant utilities monopoly control, people typically can’t run private electrical infrastructure between different utility customers or over public rights of way, with few exceptions. As a result, most microgrids in the U.S. have been of the two varieties listed above.

There should be a third way, a way in which a microgrid wouldn’t have to be limited to one customer, nor would it need to rely on the utility to own and operate all of the assets and control. But so far, there has been no process to allow a third-party to manage a microgrid that overlays on a utility’s existing wires and coordinates with its infrastructure.

What about virtual microgrids?

Many communities have “virtual microgrid” pilots, which allow different customers in a neighborhood to be compensated for the services their solar panels or batteries provide to the grid, like shifting energy use to off-peak hours, or trading energy peer-to-peer amongst themselves.

Virtual microgrids typically cannot island. They are virtual because the microgrids are primarily financial arrangements that aim to recognize the value distributed energy resources provide a section of the grid.

What’s happening in Illinois?

Illinois is opening the door for non-utility-owned microgrids that seek to use the utility’s infrastructure.

As part of the proceeding to gain approval of its Bronzeville microgrid project, ComEd has made a commitment to work with EDF and CUB to develop a first-of-its-kind tariff, which will enable third parties to create and manage microgrids with the option to use ComEd’s wires. This tariff, to be filed by January 2020, will serve as a way for customers to request ComEd install equipment to enable a section of the grid to “island” – creating a microgrid.

When the microgrid is islanded, managing the solar, batteries, and energy use will be the responsibility of the third-party, not necessarily the utility. Were the utility to want to manage these elements of the microgrid, it would have to compete among service providers. The utility will be involved, however, when its equipment is needed to disconnect or connect back to the broader grid, and for the regular operation of the grid.

Why is this innovative?

This innovative process will find a way for groups of people to:

  • Opt in to a microgrid project without having to build their own wires between buildings,
  • Incorporate their own solar, batteries, energy efficiency, and/or building controls into a microgrid that could be managed by a non-utility third-party,
  • Use the existing utility wires to send and share those resources,
  • Coordinate with the utility to have islanding switches installed, and
  • Create a way to work with the utility to coordinate operation of the microgrid.

Through the tariff, microgrids could provide power to a cluster of businesses or an apartment complex, or serve as a platform for smart cities. An entrepreneur could create one, and individual customers could buy into the microgrid at their choosing. The list goes on.

Microgrids offer myriad possibilities to increase the use of clean energy and enhance efficiency, and cut pollution by reducing reliance on traditional power plants. Future microgrids are likely to be customer-driven, and we look forward to working with ComEd to develop a tariff that accelerates that future – opening the door for a cleaner, more efficient Illinois.

Christie Hicks is manager, clean energy regulatory implementation, at the Environmental Defense Fund. This post originally ran on the Environmental Defense Fund blog. 

On May 9, Andrew Barbeau, senior clean energy consultant for Environmental Defense Fund, will speak at Microgrid 2018 in Chicago. 

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