October 3, 2023

Utilities’ Role in Developing and Deploying Microgrid Technology

5 Min. Read

The U.S. energy infrastructure is facing some challenges linked to aging and the sharp increase in energy demand that stems from EV adoption and electrification. By moving power production and storage to the local level, microgrids are emerging as a new approach that increases resiliency, improves production capacity without hurting the environment, and adapts to the unique needs of communities.

Adoption is still in its early stages, and utilities can play a crucial role in building a modern infrastructure ready for the future of electrification by focusing on microgrids now. Read on to learn more about the role of utilities in microgrids.

Collaborating With Technology Providers to Design and Install Microgrids

A microgrid is a local power infrastructure that combines multiple sources of energy. It usually includes a battery system and the main power grid interface. The role of utilities in microgrids begins with identifying and developing new technologies that will make this decentralized model more effective.

The Importance of Microgrid Technology

Microgrids are flexible systems that leverage the latest utility technologies to automatically switch from one power source to another or interface with the primary grid when needed.

Most systems use an intelligent load controller and management software to operate a stable and effective microgrid. Utilities can make a difference by forming partnerships with innovative companies to develop the next generation of smart power management systems.

How AI Supports Resilience and Renewable Energy Integration for Direct Relief

Here is an example of how the right partnership can enhance outcomes for a microgrid project:

Direct Relief is one of the leading distributors of medical and humanitarian relief supplies in the U.S. Located in Santa Barbara, its main facility had a high risk of outages due to its location.

After building a microgrid that integrated solar power, a backup generator, and a battery storage system, Direct Relief looked into expanding this system to enhance resiliency further and discharge enough energy to the grid to offset the project’s cost.

Direct Relief partnered with Australian company Plant Ark Power to deploy eleXsys. EleXsys is a smart grid edge management system that uses AI to adjust voltage and allow the primary power grid to interface with a large solar array without requiring a costly grid upgrade.

Investing in Research and Development for Advanced Microgrid Solutions

Close to 700 communities have access to a microgrid in the U.S. While adoption is still early, experts believe the microgrid market will grow 19% annually throughout 2027.

Research & Development

The role of utilities in microgrid research cannot be overstated. Utilities can position themselves as leaders and seek new ways of integrating clean sources of power, optimizing the interface with the primary grid, and building intelligent systems that adapt to the unique needs of communities.

Now is the right time to invest in research and development projects resulting in advanced microgrid solutions with optimized performance.

Research Trends

These research topics are representative of the latest trends that shape microgrid development:

• Microgrids are decentralized systems that can adapt to the needs of each community. The role of utilities in microgrids includes conducting AI research to build systems that can automatically adjust to local needs.
• Integrating multiple power sources can be challenging due to voltage and production volume fluctuation. Developing innovative management solutions should be a primary area of focus.
• Research in battery technology can result in more effective storage solutions and reduce costs.
• Virtual Power Plants are emerging as a solution for managing energy production and storage based on real-time demand.
• Deploying microgrids requires adopting new pricing models. Some utilities are looking into leveraging blockchain technology to track the energy produced and traded with accuracy.

Developing Regulatory Frameworks and Policies That Support Microgrid Adoption

The role of utilities in microgrids continues beyond developing and implementing new technologies. Utilities have an essential role in shaping the regulatory framework and policies that will support microgrid adoption on a large scale.

Barriers to Implementation

Utility providers are uniquely positioned to identify the main barriers to implementation. Common barriers include:

• Justifying the initial investment and operating costs.
• Potentially competing with local nonutility microgrids.
• Working with different net metering schedules for other sources of energy.
• Developing a consistent pricing model when no microgrid rate schedules exist.

As a utility provider, you can pave the way for change by offering incentives to residential and commercial customers, either in the form of a preferred rate or energy credit for discharging power into a microgrid system.

You can also open the dialogue with your local government and explore new regulations that benefit everyone involved.

Adopting a Distribution System Operator Model

Many of the challenges faced by utilities stem from the fact that these organizations operate as service providers. Rethinking this business model is essential for developing a framework that supports microgrid adoption.

Innovative utilities like S&C Electric have been transitioning to a Distribution System Operator model instead. With this approach, utility companies act as a marketplace that provides access to a service rather than delivering the service directly.

Collaborating With EV Charging Infrastructure Providers

The EV charging infrastructure is growing fast. Financial and state incentives drive this trend, and major automakers are also investing in developing an infrastructure to support EV sales further. Several major automakers are working together to add 30,000 charging ports to major cities and travel corridors by 2030.

Partnerships With Utilities

Microgrids are an ideal solution for utilities facing the increased need for energy production tied to EV charging.

However, working closely with the organizations developing the EV charging infrastructure is crucial. These partnerships can help utilities anticipate demand and better adapt to the unique needs of local EV drivers.

A partnership can also lead to negotiating charging rates that benefit all the parties involved. As more EVs support bidirectional charging, a collaboration with a charging network could facilitate the integration of EV batteries into microgrids.

National Electric Highway Coalition

Over 60 utility providers are already partnering to build a fast-charging network. Their combined service areas include over 120 million customers, and this project could set a precedent for developing EV charging networks on a large scale and cement the role of utilities in microgrids.

Developing Microgrids With the Right Partner

Utilities have a crucial role to play in the development of microgrids and the modernization of the current energy infrastructure. Now is the right time to invest in research projects and form partnerships with innovative companies to facilitate effective microgrids’ design and deployment.

As an electrification leader, Qmerit can help you identify opportunities and develop an infrastructure for a more resilient and sustainable future. Contact us now to learn more.