Steve Pullins, Vice President, Energy Solutions
With the waning performance of the electric grid from a reliability and economics perspective, many consumers have become prosumers, taking more control of their own energy environment. This trend will continue, and possibly accelerate, as the millennials take more and more leadership in companies and agencies in the coming years. As we consider the robust trends in the energy industry, microgrids show promise as an effective tool for consumers and utilities to address many of the reliability, resiliency, environmental, and economic needs on campuses and in communities.
Like many industries, electric and gas industries will become more and more dis-intermediated by distributed solutions and market forces. The shift from landlines to mobile phones, the democratization of travel, and growth of required social options all suggest similar long-term trends will persist in energy. New rules, driven by consumers, are chipping away at the 75-year history of major utility monopolies, and recent efforts in New York, Connecticut, California, Hawaii, and Massachusetts are putting the power of choice in the hands of energy consumers. These drivers are changing the energy market.
The expansive enablement of new technologies are opening doors to these changes in the industry, but it is clear that we have only a glimpse of how technology will enable future changes in the energy industry. Change begets change.
Thus, with waning performance, changes in rules growing out of consumer influence, and new technology enablement, the industry trends are demonstrating a radically different future in energy. The trends suggest that the average distance between generation of electricity and consumption of electricity is moving from tens of miles to tens of feet. The trends are showing the consumers will no longer rely on utilities for reliability and resiliency of service. The trends are showing that younger consumers, as they take on more leadership in society, will drive a much greater emphasis on sustainability and clean energy, even at greater cost. The trends are showing the importance of local energy markets at the city / community level (transactive distribution networks). These trends are suggesting that by 2050 90% of the energy will be produced at the consumer and distribution level and consumed within a mile. The remaining 10% role of the bulk power system will return to its original role (1930’s) of getting geographically constrained renewables to urban / suburban areas.
Microgrids present a new breed of complex solution in this changing space. They offer an optimized portfolio of resources (self-determination) that support cleaner energy supply. They offer a data-rich environment (local big data) where trend and signature analysis are important attributes in driving economics, reliability, and emissions reduction. They offer the flexibility to share energy across neighborhoods (markets) opening the door to shared savings. Microgrids also offer local solutions that “close the loops” on clean water, improved healthcare, retention of local culture, and fostering small businesses in developing nations, who are all challenged by access to affordable, reliable energy.
So, to meet the needs of consumers as the industry progresses to a vastly distributed 2050, much technical, policy, market, and educational change is required to facilitate, even follow, the change driven by new consumer realities. Microgrids are changing the vision of what is possible.