We are seeing new developments almost daily in energy markets. Julian Spector writes in The Guardian about a new microgrid developed for a social housing complex in Brooklyn. Have you seen similar efforts in other cities? Let us know.
Brooklyn’s social housing microgrid rewrites relationships with utility companies
Residents of a social housing complex in Brooklyn, New York, can’t stop another tempest like Superstorm Sandy from crashing through their city, but they can feel secure that it won’t cause a power cut.
In June, the 625-unit Marcus Garvey Village cut the ribbon on its very own microgrid, a localised network of electricity production and control. Rooftop solar panels produce clean power when the sun is up; a fuel cell takes in natural gas and churns out a steady current all day; when it’s more valuable to save the electricity for later, the largest lithium-ion battery system on New York City’s grid does just that.
These contraptions – which cost $4m (£3m) to install – reduce the community’s monthly power bill by 10% to 20%.
“It helps keep the housing cost affordable,” said Doug Staker, co-founder of Demand Energy, the company that developed and operates the microgrid.
In a disaster like the storm that ripped through the country’s eastern seaboard five years ago, many people will lose power. During Sandy, approximately 8m homes and businesses lost power, some for more than a week. But if this happens again, the complex’s microgrid will switch into what’s called island mode, isolating itself from the broader grid to run like its own miniature utility.
Residents need not flee to find safe temperatures, light and a phone charger because the community centre and critical offices can maintain power for about five days. And, if clouds clear, the solar power can charge the batteries again.
Microgrids have been around for a long time, often featuring diesel generators hooked up to lead-acid batteries. But clean power microgrids are gaining popularity as they become more affordable.
Falling costs for solar panels and batteries are making them more economically compelling, and they have the potential to rewrite relationships between people and the big utility companies. Microgrids offer something that rooftop solar alone cannot: the ability to leave the grid entirely.
Just a few miles from Marcus Garvey, the experimental Brooklyn Microgrid – designed by tech company LO3 Energy – aims to let households with rooftop solar panels trade power among themselves, cutting out the middleman.
“We need to make energy a product and a service that people can purchase on their own and not rely on a large centralised entity,” one participant told the New York Times in March.
That sort of rhetoric has prompted consternation among utilities, which for a century have controlled electricity access.
If customers make and store electricity, they won’t need to buy as much from the utility. That could mean utilities don’t recover the costs of their investments and have to raise their rates, which hits customers who don’t have the wherewithal to install their own generating capacity.
“While tariff restructuring can be used to mitigate lost revenues, the longer-term threat of fully exiting from the grid (or customers solely using the electric grid for backup purposes) raises the potential for irreparable damages to revenues and growth prospects,” the Edison Electric Institute, a US utility industry group, wrote in an emblematic 2013 report (pdf).
Going it alone is hard work
Those irreparable damages have not yet arisen, largely because staying connected to the grid is almost always more convenient than switching to full self-reliance.
Turning solar panels and batteries into a microgrid requires adding an electrical switch to disconnect from the grid, a more sophisticated inverter and system controls to balance electrical supply with demand for every second of the day.
“It’s fairly complicated to set up your own microgrid and have enough generation resources to cover the load in the system,” said Bill Torre, director of energy storage and systems research at the University of California San Diego (UCSD), where he helps design one of the world’s most sophisticated microgrids.
The Marcus Garvey solar and fuel cells both produce a maximum of 400 kilowatts, but typical summer energy demand for the housing complex, including air conditioning, is 1,500 kilowatts, according to Staker. Fulfilling all that demand in island mode would take a lot more generation capacity; instead, the islanded microgrid powers critical functions to keep the community safe.
Successful microgrid business models have targeted larger sites (such as military bases and university campuses) with professional energy managers, in situations with specific needs.
“One of the primary benefits of the microgrid is improved reliability of service, and the cost and development of a microgrid is insurance to having a better degree of electric reliability,” said Torre.
In those cases, you pay a premium up front to prevent an even costlier outcome. And if the microgrid provides additional benefits on top of that, like cheaper utility bills and cleaner power production, so much the better. UCSD reports that its microgrid serves 92% of the campus’ electricity needs and saves more than $8m annually compared to buying that power.
New England states, still reeling from Sandy and subject to severe winter storms, have begun sponsoring clean energy microgrids to keep municipal governments up and running in a natural disaster.
Montgomery County, Maryland, contracted with a subsidiary of major utility Duke Energy to run a solar-powered microgrid at its public safety headquarters. This operates as a subscription service. The county government pays Duke for a higher level of reliability than was available from the grid before.
This project represents a possible turning point. Even if almost all customers find it easier to stay connected to the grid, efficient appliances and rooftop solar can reduce the volume of kilowatt-hours they purchase. Utilities can counter that lost revenue by offering new, more sophisticated products, like Duke’s.
Back in Brooklyn, the Marcus Garvey microgrid helps reduce peak demand for utility Consolidated Edison by consuming its own stored energy on the hottest days when New Yorkers crank the air-conditioning simultaneously, freeing up Con Ed to supply the other people who need more power.
The utility has an agreement to pay Marcus Garvey Village for using its stored energy to reduce demand on the grid at key moments. That local demand reduction contributes to a broader effort by Con Ed to avoid a $1.2bn electrical infrastructure upgrade by using cheaper, localised alternatives. That, in turn, saves all ratepayers money.
“Utilities are starting to see that as a bonus: let’s partner with this group and deploy these systems,” Staker said. “It’s more win-win.”