AS THE FUKUSHIMA disaster unfolded in Japan, the Blue Lake Rancheria, in Northern California, was dealing with its own crisis. Several miles inland and uphill from the Pacific Ocean, the 100 acres of tribal land had turned into a haven for roughly 3,000 coastal dwellers who were fleeing a feared tsunami from that same earthquake. A huge line of cars assembled at the Rancheria’s gas station; one young woman ran in circles, holding her baby and weeping.

Local inundation ended up being relatively minor. But the Blue Lake Rancheria was shaken. “That was an eye-opener,” says Jana Ganion, sustainability and government affairs director at the Rancheria. “We need to prepare for the disasters that are reasonably foreseeable here.”

Tsunamis for one. But also the massive earthquake that’s going to devastate the Northwest. And California’s annual wildfires, made ever more vicious by climate change. These disasters all have one thing in common: They threaten to cut the Blue Lake Rancheria off from the grid for days, maybe weeks. Tucked behind the state’s “Redwood Curtain,” the Rancheria’s rural placement affords it few access points, and roads may be inaccessible in the aftermath of a disaster.

The answer was to help pioneer what could be the future of energy in California and beyond. Working with scientists at the Schatz Energy Research Center at nearby Humboldt State University, and the local utility PG&E, the Rancheria developed its own solar-powered microgrid, allowing it to disconnect from the main grid and run off Tesla battery power. The setup powers six buildings, including a 55,000-square-foot casino and 102 hotel rooms—over 140,000 square feet of total building space.

Microgrids would be eligible for federal clean energy investment or production tax credits under a bill recently introduced by US Sen. Ron Wyden of Oregon.

Wyden’s bill proposes to simplify long-term, performance-based energy tax incentives, replacing a jumble of 44 incentives that exist today. The bill strives for a technology-neutral approach that promotes clean energy and storage.

The proposed Clean Energy for America Act would shelve existing solar investment and wind production tax credits, which are scheduled to be phased out, as well as other clean energy incentives, in favor of investment and production tax credits linked to greenhouse gas (GHG) emissions reductions.

What’s eligible

Two common microgrid resources — energy storage and combined heat and power (CHP) — become eligible for clean energy investment tax credits (ITC) or production tax credits (PTC), the choice being left up to the applicant.

In addition, both microgrid software and hardware, along with demand response, would be eligible for either the clean energy ITC or PTC, according to Max Halik, a senior research associate at Lux Research.

Many of the benefits microgrids offer rely on software-based features, such as intelligent monitoring, real-time data collection, forecasting, analysis and systems management, as well as a new generation of digital power equipment and tools, Halik pointed out in an interview.

California is several years into a push to help commercialize microgrids in the state. Now, officials are taking stock of the performance of the first generation of microgrids supported under the effort.

These demonstration microgrids are delivering a reported utility bill savings of 20 percent to 60 percent, primarily in avoided demand charges, and some have successfully islanded during power outages.

State regulators believe microgrids, or localized grids that can operate apart from or in concert with the traditional power grid, offer solutions to some of the challenges facing grid operators, including integrating distributed energy resources.

The California Energy Commission (CEC), which has led the early work by state agencies to advance microgrids, has disbursed a total of $84.5 million to build 20 new microgrids scattered across the territories of the state’s three investor-owned utilities. Grant funding for the projects has come from the Electric Program Investment Charge (EPIC), a ratepayer-funded energy innovation research program.

The CEC recently convened a workshop on lessons learned from the seven microgrids funded under the EPIC program in 2015.

The projects include: a microgrid at the Blue Lake Rancheria, a tribal community in Humboldt County; a microgrid owned and operated by San Diego Gas and Electric Company (SDG&E) in Borrego Springs, which includes a 26-megawatt, ground-mounted solar PV array; microgrids installed at three City of Fremont fire stations; a microgrid installed at Kaiser Permanente’s Richmond Medical Center; a direct-current microgrid installed at a Honda distribution center; a microgrid on the Las Positas College campus; and a microgrid installed at the City of Santa Rosa’s Laguna Wastewater Treatment Plant.

The seven projects were awarded a total of $26.5 million, with project grants ranging from $3 million to $5 million each.

“Clear value”
“Across the board, we demonstrated that microgrids have a clear value, and in certain cases, can be very beneficial,” Mike Gravely, team lead in the California Energy Commission’s energy R&D division, told Greentech Media in an interview.

State Rep. Steven Johnson, a western Michigan Republican in his second term, says his first priority on energy policy is to “look out for ratepayers.”

That’s a driving theme behind his recently sponsored bill to expand the use of microgrids in Michigan. Johnson wants to bring the state up to speed on the emerging technology while allowing utility customers to be more self-sufficient and resilient during outages.

The bill, a component of an “energy freedom” package that failed to advance last session, already faces skepticism from a major utility.

“It’s not my job to look out on behalf of utilities,” said Johnson, who sponsored a similar bill last year. “They might be concerned our legislation hurts their bottom line, but this will be good for ratepayers.”

HB 4477 is the first step in what could be a broader push in Michigan to expand the use of microgrids, which allow utilities or their customers to build distributed generation in a small, closed network able to island itself off from the grid during outages. The bill is cosponsored by three Democrats and two Republicans. Lawmakers have proposed microgrid legislation for at least five years.

Microgrids are relatively uncommon in the Midwest compared to other regions, and generally involve private entities. Consumers Energy has launched pilot microgrid concepts in Jackson and Grand Rapids, though they don’t have islanding capabilities.

Johnson’s bill sets a framework for allowing utilities and private entities to create microgrids for “critical facilities” — such as hospitals, police and fire stations, and correctional facilities — during outages. The microgrids would be able to serve other facilities if they are “electrically contiguous” to critical buildings.

Many customers install microgrids for financial benefits and as a safety net to ensure a reliable, resilient power supply in the event of a utility failure. The traditional grid in the U.S., in service for the past 140 years, provides electricity 99.9 percent of the time. This leaves about eight hours per year when equipment issues in the power grid or extreme weather conditions lead to major power outages.

Many customers install microgrids for financial benefits and as a safety net to ensure a reliable, resilient power supply in the event of a utility failure. The traditional grid in the U.S., in service for the past 140 years, provides electricity 99.9 percent of the time. This leaves about eight hours per year when equipment issues in the power grid or extreme weather conditions lead to major power outages.

For example, the University of California, San Diego, operates a microgrid which supplies most of the energy need on campus that includes a 30-megawatt cogeneration plant a 2.8 MW renewable energy fuel cell and 2.4 MW of solar arrays. Other commercial facilities with microgrids might generate some of the power they use but rely on grid electricity for most of their needs.

As mentioned above, most microgrids are connected to a healthy utility grid 99.9% of the time. They rarely operate independently in island mode, presenting an opportunity. There is potential value in intelligently sharing the microgrid’s resources with the utility or other power consumers in the network, outside of the facility in which it is installed.

The utilities are responsible for keeping the grid system running, and they are willing to pay to ensure stability. Amongst other criteria, they must balance supply with demand, keep the voltage and reactive power within specified parameters, and maintain power quality within set limits. Connected microgrids could add value by providing these services.

Today, most microgrid solutions are planned and built with a focus on the customer’s internal power requirements and benefits. Alongside this important function, the system could be designed to maximize asset value by utilizing the energy resources intelligently according to the changing energy needs internally and externally. This ability to continuously optimize internal energy savings and external energy revenue opportunities can provide facility owners with maximum benefits. PXiSE Energy Solutions’ software-based Active Control Technology (ACT) is designed for such purpose.

The energy industry is poised for what some describe as a sizable investment shift. Oil and gas lose, and power wins with the growing electrification of transportation and buildings. So what does this mean for microgrids?

Mark Feasel, vice president of smart grid, Schneider Electric, offered insight in a recent interview leading up to Microgrid 2019, where Feasel will be a featured panelist.

Move over oil and gas. Here comes electrification
Electricity use is on the rise. Despite massive infusions of energy efficiency, demand for power grew 4% last year, its fastest pace since 2010 when it received a jolt as the global economy recovered from the financial crisis.

And that’s just the start, given long-term growth expected as the world increasingly uses electricity to run cars and heat and cool buildings. A federal study sees potential in the US for an “unprecedented” rise in electricity use from 2016–2050 — 80 TWh/year compared with 50–55 TWh/year over the prior 34 years.

For the oil and gas industries, this mean loss of market share to the power sector. Electricity already eclipsed those fuels globally in 2017 in terms of new infrastructure investment, drawing $750 billion compared to the oil and gas sector’s $715 billion.

How to get the electricity to the charging stations?
As demand for electricity grows, so does the need for new infrastructure to deliver it — more wires, poles and substations to serve the electric vehicle charging stations that will replace gas stations.

Will utilities — which invest via slow-moving regulatory oversight — be able to build infrastructure quickly enough to serve electric vehicle demand? Not alone, Feasel said. That’s where independently built microgrids come into play.

“I do expect regulated utilities to serve the electric vehicle segment in a major, major way,” Feasel said. “But the segment’s going to be so big — and some of it is starting to emerge so fast — the microgrid is going to have to be the answer.”

Washington State is getting greener now that the Snohomish County Public Utility District is building a microgrid powered by a 500-kW solar array, which will use lithium-ion battery storage and provide backup power in case of an emergency.

The project, which should be ready for testing late in 2020, will cost $12 million and it will receive a grant from the state of $3.5 million. The Arlington Microgrid and Clean Energy Technology Center project aims to leverage battery technology to provide backup power as well as peak shaving and the integration of renewable energy and electric vehicles.

“We are connected to the grid,” says project manager Scott Gibson, in an interview. “But if there is an earthquake we disconnect from the grid and our microgrid will power up our future local office building. A lithium-ion battery (1,000 kW/1,000 kWh) and a solar array will keep that powered instead of a diesel generator that uses fossil fuels.”

The contract to build the solar array was awarded to A&R Solar of Seattle.

After the project is tested, the ultimate goal is to look for other opportunities to expand the technology in the utility’s service territory. And right now, the batteries do not pay for themselves, although their prices are dropping by 10% a year. If the utility can get multiple uses from the devices — backup power, renewable energy integration and peak shaving to preserve the main grid — their benefits will add up.

To that end, the utility sees renewable energy as its future. Already, it relies on hydropower for 85% of its electricity. But coal and natural gas do have small roles through market purchases. The utility district wants to minimize their usage, necessitating that it be able to integrate more wind and solar onto the grid. One way the utility district can get close to achieving that goal is through the confluence of on-site generation and energy storage, or more microgrids.

Microgrids that regulators determine “serve the public interest” are back in play in Maine this year as lawmakers try to pass a bill that fell short a year ago.

Legislators passed a bipartisan bill last year more clearly defining how microgrids could be created, but former Republican Gov. Paul LePage vetoed it. Newly elected Gov. Janet Mills has clear majorities of fellow Democrats in both houses of the legislature.

Mills’ aggressive clean energy agenda has included a goal of 100 percent renewable energy, supporting a transmission project to import hydropower destined for Massachusetts, lifting a moratorium on wind pr0ject permits and expanded use of heat pumps. Legislative colleagues have introduced virtually the same microgrid bill that was vetoed last year, now known as LD 13.

Join Microgrid Knowledge for a special leadership workshop on government policy and microgrids May 13 in San Diego at Microgrid 2019: Shaping the New Electric Grid.

Rep. Mick Devin, the bill’s prime sponsor, said Vermont, which has aggressively promoted distributed energy resources and its utility Green Mountain Power was working to integrate clean energy into its power system. “It’s an example of how Maine might move forward on energy policy, particularly via the establishment of microgrids,” Devin said.

LD 13 would create a process through which the Maine Public Utilities Commission (PUC) could approve the construction and operation of new microgrids.

Local, green and under 10 MW
The microgrid could serve load no larger than 10 MW, and its generation resources must qualify as eligible under the state’s renewable portfolio standard (RPS) and would have to be located nearby. Investor-owned utilities or their affiliates could not own or operate microgrids.

At a Jan. 31 legislative hearing, Paulina Collins, legislative liaison for the PUC, said the commission would suggest some flexibility be written into the RPS requirement. “For example, a microgrid that contains solar generation, may need back-up generation from a source that does not qualify for the portfolio requirement,” she said.