The Grid, Part 2: DERs and Microgrids
In issue, I summarize some of the problems facing the grid, and dive into a potential solution, and talk to Robert Ferry of Land Art Generator, who is doing important work around microgrids
Part 1 of this series was about how the existing grid works. Part 2 focuses on what needs to change for the grid to be up to the challenge to electrify everything, which is a huge part of decarbonizing.
In short, here are the big problems:
We don't have enough transmission lines. To meet growing demand, from things like EVs and heat pumps, to the relatively new demands from data centers to run artificial intelligence platforms, we need many more miles of lines. Pretty much everything we need to do to decarbonize involves electricity, which has to move from place to place. Transmission is currently the biggest cost facing the utilities and ratepayers.
The current design of our electrical grid is for carrying large amounts of electricity from a central place out to homes/businesses/etc. It’s also largely regional. Big transmission lines to move electricity from the plains or the desert to cities on the east coast don’t exist. We need transmission lines to connect the different regions.
Moving electricity from small generators, such as rooftop solar arrays, to the grid is also problematic. By building microgrids and using distributed energy resources it’s possible to supplement the power supply, but some utilities simply aren’t set up for it.
Permitting is an issue. Companies are addressing both points 2 and 3, but the permitting problem is serious. Getting permits for big projects takes years, and even getting permits for rooftop solar can be onerous and varies from state-to-state. Streamlining the permitting for building new power generation and for interconnection is a complicated process, requiring congressional action. Smaller projects like microgrids must be handled by local and state permitting authorities, which are complex just in their variety.
Each of those four points could be an entire book, but this series will at least provide a basic introduction. In this issue, we’re going to talk about distributed energy resources (DERs, which can be pronounced as a funny-sounding word, or as letters) and microgrids.
DERs and Microgrids
DERs are a group of technologies, like rooftop solar panels and battery storage. The International Energy Agency defines DERs as “small-scale energy resources usually situated near sites of electricity use.”
A microgrid is “a group of interconnected loads and distributed energy resources that acts as a single controllable entity with respect to the grid. It can connect and disconnect from the grid to operate in grid-connected or island mode.”
A couple of examples:
A hospital campus may have some DERs, like solar panels and battery storage to keep essential services running in the case of a power outage. If those solar panels create more energy than the facility needs, it may send the excess to the main grid. If they can turn off that connection and operate as an island, the campus has a microgrid.
A housing development could work in the same way. The houses may each have solar panels and battery storage (DERs), and the development might be able to disconnect from the grid in the case of a weather event or wildfire and operate as an independent microgrid.
Most experts predict it will be extremely challenging to build out the grid to the extent needed to reach net zero. DERs and microgrids can be a way to supplement while all the policy questions get hammered out.
DERs and microgrids effectively create small pools or lakes of electricity that can contribute to the needs of the overall community or provide resilience for a smaller group of homes or businesses. As the weather becomes increasingly volatile, resiliency grows in importance.
If you imagine those kinds of pools of electricity being generated in places like big box stores with huge roofs and enormous parking lots, and on warehouse roofs, or in public spaces like parks, you can see the enormous potential. Suddenly instead of depending on one aging, over-burdened grid, we have back up in the form of thousands of microgrids.
Land Art Generator Adds Beauty
I had the pleasure of talking to someone working to make these microgrids come into existence, and also to make them attractive and provide additional benefits to neighborhoods. Robert Ferry is an architect by training, and now, along with his wife Elizabeth Monoian, co-directs Land Art Generator, which “engages the public in the co-design of our clean energy future, bringing together the disciplines of public art, urban planning, creative placemaking, renewable energy, and environmental justice.”
The organization runs design competitions around the world. They are currently working on their ninth competition to engage creative interdisciplinary teams of artists, architects, engineers, scientists, and so on in tackling some of the challenges associated with bringing clean energy generation to a much more local level.
Here’s an example of one of their winners. The structure is called Arch of Time, and will be installed in a public park in Houston. The designer, Riccardo Mariano, is based in Berlin, and designed this structure so that “each beam of light is uniquely composed throughout the seasons and hours of the day by the geometry of the artwork, which responds to the specific latitude and longitude of Houston.
It’s gorgeous AND it will generate around 400,000 kilowatt-hours of electricity each year, which is about what it takes to power 40 homes in Texas annually. Obviously, not every solar installation can meet this kind of standard and be both art and practicality but there’s not really a good reason we can’t build many more microgrids.
It’s Just Good Sense
Climate change mitigation and the energy transition should transcend politics, and while the major parties in the United States have decidedly different takes on what needs to happen, there are signs that average people mostly agree about some things—like microgrids.
Here’s one of my favorite Facebook memes:
I like it for its message, but also because who shares it. I’ve seen folks who are confirmed conservatives share it, as well as people who are a bit to the left of progressive. In other words, pretty much everyone agrees that solar panels on parking lots is a really good idea. I asked Ferry why it doesn’t happen more often, and his answer was what I expected:
“It’s what we value, and what we decide to spend money on as a society. It comes down to that.”
Essentially two kinds of solar projects are happening right now. One is homeowners installing solar panels on their homes. The second is big companies building big solar arrays. “Energy developers are going to take the lowest hanging fruit,” says Ferry.
These organizations are looking to maximize their profit per kilowatt hour. “So these developers are thinking over a 30 year design life for their installations, and they want to install it for the cheapest dollar per watt and they want to operate it for the cheapest dollar per kilowatt hour,” he adds.
Right now, that means finding undeveloped land, just far enough away from population centers to be inexpensive rather than choosing brownfields—places like former sites of coal mines, or where factories once stood. The current model doesn’t lend itself to prioritizing parking lots or shared land uses like agrivoltaic or others.
“Though these solutions do exist, they’re not what the developer is going to be making the largest margin on, and at the end of the day, they have a responsibility to their shareholders because we live in a capitalist economy,” observes Ferry.
That all sounds pretty depressing, doesn’t it? But there’s a potential solution, and it’s one that looks like it could improve the bottom line for some companies. Imagine if a company like Walmart chose to install solar panels over their own parking lots. They could then use the energy they generate and save significant money on the cost per kilowatt hour compared to purchasing that energy from a utility. They could also sell that energy by installing chargers for EVs in their parking lots.
Ferry elaborates, “If you’re a business owner who has a rooftop, you’re paying a kilowatt hour retail price. Maybe that’s 15 cents. Maybe that’s 20 cents. If you know you’re going to be in business at the same address, it makes a whole lot of sense. The installed cost of solar on your roof is about $4 per watt. You’re going to have a certain payback period for making the return on your installation, but after that they’re getting free electricity going forward.”
“While change is not happening as fast as it should or could, I'm certain we will get to a net-zero electricity grid by 2040. It seems inevitable that we will find a way there just based on the economics of solar, wind, and storage.” -Robert Ferry
It’s not especially outlandish to imagine companies choosing this route. In fact, Walmart began doing such installations in 2020 in partnership with Sol Systems.
Challenges
Even though experts estimate that as much as 30% of our electrical needs could be met through microgrids, several barriers exist. One is simply cost, as Ferry noted during our conversation.
Under the current system, utilities make more money when they invest in big, centralized, fossil-fuel powered plants, which means that they are both unlikely to promote distributed energy solutions and may also work to impede them.
Another issue, that seems like it should be solvable, is that of permitting. In the next issue, we’ll look closer at what the problems with obtaining permits for DERs and microgrids are, as well as why permitting is a particular problem when it comes to large transmission lines.
Note from Dava:
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