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The Macro-Impact of the Microgrid

April 24, 2024
Approximately 80 million kilometers of the world’s power grids – which have served as the delivery method of electricity for more than a century – need to be replaced before the year 2040.

Why microgrids are key to a successful energy transition

The transition to cleaner energy is dependent on a sustainable power supply. It also requires electrification of buildings and transportation, further increasing dependence on the grid. If that is not enough, the loss of dispatchable generating resources like coal plants can increase the risk of system imbalance during extreme temperatures since the addition of renewables also needs substantial transmission build out. According to the International Energy Agency (IEA), electricity’s share in energy demand will need to increase by 4 percent per year, and generation of that energy needs to come primarily from renewable resources to meet net-zero goals by 2050.

Power grids also need to expand to accommodate demand. Approximately 80 million kilometers of the world’s power grids – which have served as the delivery method of electricity for more than a century – need to be replaced before the year 2040. That’s enough distribution and transmission lines to wrap around the Earth 2,000 times.

Nevertheless, the overtaxed power grid serves as the best avenue to bring renewable and clean energy sources online. But can the overtaxed power grid of today adapt for the needs of tomorrow? Are there options that can reduce the need for this substantial investment to serve growing peak demand?

Decreased Capacity, Insufficient Supply

At first glance, the obvious solution to a maxed-out grid is more power lines. However, experts estimate that a significantly expanded grid would take decades to complete, including a lengthy permitting process to ensure adequate right-of-way—much too long to serve as a practical option. Adding new, larger transformers and expanding power line capacity, along with necessary infrastructure improvements that can also support renewables and storage, will cost an estimated $2.5 trillion by 2035.

Meanwhile, increasing frequency and intensity of extreme temperatures and severe weather put additional pressure on the grid’s load and have the potential to cause lengthy and costly outages. The energy industry is very aware of this struggle. In a 2023 report from the North American Electric Reliability Council (NERC), the organization’s long-term reliability assessment showed that the power grid is at risk in just about every geography in North America because of extreme temperatures driving record loads.

The Answer Is Micro

In addition to investing in transmission to bring more renewables and storage to market and to connect new loads, industrial and community microgrids can play an important role in supporting local reliability and renewable integration – and reduce the dependency of new transmission since they are located close to loads.

A group of interconnected loads and distributed energy resources (DERs), a microgrid can connect and disconnect from the grid during power outages making critical infrastructure more resilient to grid failures and shortfalls compared to solely relying on generation from a central location.

In practice, microgrids can scale hundreds to thousands of megawatts in a way that provides local resiliency value and can support the grid by mitigating peak demand impacts. This dual purpose of local resiliency for critical infrastructure coupled with dispatchable capacity to reduce peak period demand earns microgrids a role in transmission and generation capacity planning.

Microgrids can also be the answer to allowing for a seamless transition to reliable, clean energy sources. Clean fuel microgrids are cleaner than diesel backup for local resiliency and more reliable than solar and wind, which helps balance their intermittency.

Making microgrids a realistic part of the electrical supply portfolio for millions of people around the world will require a change in thinking and fair market access for these distributed energy assets, but microgrids do not need the subsidies often associated with the energy transition.

In its current state, the power grid has real impact on the daily lives of users who depend on it for basic household and workplace functions. And conventional generation supplies located away from load centers that power those habits face challenges in transitioning to a cleaner future.

The world is ready for reliable and clean energy sources that aren’t vulnerable to extreme weather events. Reliable power is no longer out of reach, but it’s up to energy providers and regulators to make DERs and microgrid implementation a reality. To help maintain system reliability as we journey through the energy transition.

With more than 30 years of experience in commercial and industrial energy services and technology and innovative utility solutions, Enchanted Rock Chief Commercial Officer, Allan Schurr, is responsible for market development and expansion of resiliency solutions and partnering with utilities. Schurr is also a registered Professional Engineer in the State of California and is a co-inventor on seven patents related to distributed energy.

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