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Major Evolution of the Utility Paradigm

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John Benson's picture
John Benson 95969
Senior Consultant Microgrid Labs

PROFESSIONAL EXPERIENCE: Microgrid Labs, Inc. Advisor: 2014 to Present Developed product plans, conceptual and preliminary designs for projects, performed industry surveys and developed...

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  • Mar 15, 2021
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This item is part of the Special Issue - 2021-03 - Power Generation, click here for more

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The electric utility industry has operated under the paradigm that big generators are sufficiently more efficient than small generators to justify the considerable expense of the T&D network required to get their energy to widely distributed loads. This has been the case since Tesla and Westinghouse invented the modern electric utility industry (to a lesser extent Edison, who actually invented DC microgrids). But what if this was not true, at least in some cases?

The answer to the above question appears to be: this assumption is no longer true in limited cases, and this will start an evolution of the grid’s structure.

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The title evolution will not be rapid, nor will it initially be universally applicable, but it will start in the next year or two, and it will progress relentlessly for the next few decades. For areas with widely dispersed small communities that are susceptible to wildfires and thus public safety power shutoffs (and other widespread outages), the California Utility organizations appear to have made the determination that these would be better served by microgrids rather than the traditional grid. This post is about this evolution and its implications.

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Bob Meinetz's picture
Bob Meinetz on Mar 15, 2021

John, in a U.S. Senate hearing addressing grid reliability on Thursday, environmental activist Michael Shellenberger provided powerful testimony arguing against distributed generation and "microgrids":

"Congress took questions relating to the security of America’s electricity supply seriously before more than a dozen states experienced energy shortages last month, but those events make this hearing all the more urgent. In 2012, 2017, and 2021 the National Academies of Science and Engineering published three separate reports on threats to the grid, resilience, and the future of electricity. In its 2017 report, the Academies warned that U.S. electrical grids were increasingly “complex and vulnerable.”

Over the last 25 years, increasingly decentralized electricity generation in restructured electricity markets, along with growth in the number of regulatory institutions, has resulted in “divergent interests of federal, state, regional and local authorities,” wrote the Academies in the 2021 report. Electricity experts are not able to clearly answer the question, “who is in charge of planning, developing and ensuring the integrity of the future power system?” The Federal Energy Regulatory Commission and-the North American Electric Reliability Corporation are tasked to ensure electrical grid reliability and resilience. However, the Academies noted, 'they too face short-term pressures and fiscal constraints.'"

Shellenberger contends distributed generation is more expensive, less efficient (and thus more emissions-intensive), and more vulnerable to hacking:

"More decentralized electrical generation makes the grid more vulnerable. 'We’re adding a lot of stuff at the grid edge,' said the lead author of the Academies’ 2012, 2017, and 2021 reports, 'and if I start building microgrids does that increase my potential vulnerability? The answer is, "Yes, of course. The more complicated I make it, the more attack surfaces and, hence, the more possibilities of failure."'"

In comments at the hearing, Shellenberger said "I think we'd all agree  the reliability problems introduced by a cold snap in Texas were worsened by a complex and unwieldy system, guided by competing interests. Interesting, that other guests today believe a solution lies in making such systems more complex."

Matt Chester's picture
Matt Chester on Mar 15, 2021

Shellenberger wasn't the only one testifying on the topic, though! Here's what CEO of PJM Interconnection had to say on DERs:

The proliferation of “behind-the-meter” distributed energy resources can enhance reliability and provide customers with new self-help opportunities in times of system stress. However, for this to work well, we will need to ensure adequate visibility as the system operator and the ability, with customer consent, to dispatch those resources as a tool to ensure reliability. We have made a good start on this path through FERC’s Order 2222, but this effort will require a great deal of communication, coordination and cooperation among resource aggregators, customers, the system operator and the distribution utility.

Bob Meinetz's picture
Bob Meinetz on Mar 15, 2021

"The proliferation of 'behind-the-meter' distributed energy resources can enhance reliability..."

More nonsense, attempting to pawn off the cost and responsibility of providing a reliable supply of electricity on customers.

"...and provide customers with new self-help opportunities in times of system stress."

Sounds like a fire department letting homes burn down, then offering residents "new self-help opportunities" by handing out fire extinguishers.

"...this effort will require a great deal of communication, coordination and cooperation among resource aggregators, customers, the system operator and the distribution utility."

Exactly Shellenberger's point, Matt. Somehow, we're supposed to believe increasing complexity will increase reliability, or "what's never worked in the past, will somehow work in the future." The renewables story, in a nutshell.

 

John Benson's picture
John Benson on Mar 15, 2021

Thanks for the comments Bob and Matt.

In general, I believe that it is possible to deploy DER and microgrids in a manner that is safe and more resilient than widely distributed grids given a well engineered project. I have been involved in several successful microgrids. One of these was a large military base, and the other was a corporate headquarters for one the largest companies in the U.S. In both instances these were successful projects, and capable of offering higher resiliency vs. either a utility connection or a combination of a utility connection with back-up via UPS and conventional emergency generation.

Microgrids can also offer lower utility costs to their facility owners.

The above two projects were each the size of a small city (typical of full substation microgrid per the above diagram, although both facilities had multiple substations).

Also in the above diagram there is a "single customer microgrid". I call these picogrids. These are the new kids on the block, but are already viable. If I decided to implement one of these (for one of my homes), I would probably use a solar array plus one or more Tesla Powerwalls. I believe these are already viable, but there are still many details that need to be worked out regarding the physical and financial interface to the primary grid.

Finally, there is the subjects of this article "...areas with widely dispersed small communities that are susceptible to wildfires and thus public safety power shutoffs (and other widespread outages)"

I believe that the "...the California Utility organizations appear to have made the determination that these would be better served by microgrids rather than the traditional grid."

-John

Bob Meinetz's picture
Bob Meinetz on Mar 15, 2021

"One of these was a large military base, and the other was a corporate headquarters for one the largest companies in the U.S."

Both, then, are single customer microgrids or "picogrids". The military base would need one for security purposes; the corporate entity would ge a good deal from its utility (as well as have backup generation of its own).

"I believe that the '..the California Utility organizations appear to have made the determination that these would be better served by microgrids rather than the traditional grid.'"I

My belief is a bit less charitable. I believe that the California Utility organizations have made the determination that microgrids are, in those locations, more profitable than a traditional grid - whatever deleterious impact on prices, customer service, or the environment they may have.

Michael Keller's picture
Michael Keller on Mar 23, 2021

The generating resources need to be reliable, reasonably dispersed, and not controlled by the investment class. In other words, managed by municipal power companies or regulated utilities. Gee, pretty much what served us well for decades before the political left decided they could make things better.

Micro generators are fundamentally thermodynamically inefficient, expensive and not particularly reliable. Appears to me to be nothing more than yet another con-artist scheme created by the investment class and willingly aided-and-abetted by politicians whose campaigns are hugely bankrolled by the less-than-honest.

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