The Smart Grid has officially stolen the cleantech spotlight this week, with the Department of Energy announcing the distribution of $3.4 billion in stimulus grants for utilities championing a cleaner, more efficient electrical grid. And this has set the stage for new, innovative grid ideas to gain some traction. One of the most promising: Microgrids, smaller-scale electrical systems spanning college campuses, municipalities and business parks, where energy is generated, stored and very closely managed on an intensely local level. And today, Pike Research released a report predicting microgrids to be a $2.1 billion market by 2015.
It’s a novel concept with several distinct advantages: Microgrids are more suitable for the integration of renewable energy systems like rooftop solar panels, waste heat generators and fuel cells. On a smaller scale it is easier to track now only how much energy is actually being produced from these sources, but also how it is being used and distributed for more consistent service. Right now, the majority of the 455 megawatts being circulated in microgrids right now is still generated by traditional coal and natural gas operations — but this will probably change rapidly.
Since microgrids operate on their own, without being hooked into one of the larger national grids, there are less likely to be disruptions due to peak demand or excessive power loads. They are easier to repair and easier to automate with demand response or conservation programs. For example, it is much easier to make a difference with smart refrigerators (that only make ice during off-peak hours) on a microgrid, than on a larger scale.
Perhaps the biggest advantage, however, is that microgrids can store enough energy to keep power flowing during blackouts or other disruptions. This makes them ideal for emergency services, hospitals, and of course, the military — which has taken a deep interest in the microgrid concept of late. Microgrids could be an ideal solution for military bases. As such, defense contractor Lockheed Martin has taken some steps in this direction, for example — perhaps as an entree into the broader Smart Grid business. Here’s a rough sketch of what a military-based microgrid might look like:
As the Pike report points out, $2.1 billion out of today’s $40 billion Smart Grid market (projected to be a $210 billion market by 2015), seems like a drop in the bucket. But the real potential could be microgrids’ impact on larger Smart Grid roll outs. Their success could influence utilities to take a more modular approach to Smart Grid initiatives that need to reach millions of customers.
As is, they are taking a one-size fits all approach, focused almost exclusively on installing as many smart meters as possible, and maybe experimenting with home energy monitors and demand response programs if time and money allows. But this strategy could begin to break down as more consumers — residential and commercial alike — choose to integrate solar, wind and fuel cell technology into their energy mix. Accordingly, some major utilities have already caught onto the microgrid trend. Duke Energy, San Diego Gas & Electric and Commonwealth Edison are all taking a closer look at this potential via pilot projects.
Right now, microgrid companies, still finding their footing, have turned to campuses — where research and interested residents could help refine the concept. Right now, existing microgrids are serving 322 megawatts to institutional campuses — predicted to soar as high as 1.2 gigawatts by 2015. If the technology can be proven in these locales, it might have a better shot at residential deployment — with whole neighborhoods operating on the same microgrid.
One of the most promising players to watch in the space is Viridity Energy, provider of a technology platform that allows microgrids to run demand response programs — rerouting and rebalancing power loads to decrease disruptions and maintain grid health while paying consumers for the energy that they conserve. Viridity CEO Audrey Zibelman, formerly COO at PJM Interconnect, one of the largest grid management companies in the world, will be featured at GreenBeat 2009, VentureBeat’s seminal executive conference on the Smart Grid.
VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore and Kleiner Perkins’ John Doerr. Get your discounted early-bird tickets before Oct. 31 at GreenBeat2009.com.