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The Growth of Microgrids

A microgrid is a small-scale electricity network connecting consumers to an electricity supply. A microgrid might have a number of connected distributed energy resources such as solar arrays, wind turbines, or fuel-burning generators to produce:

• Electricity
• Large batteries and electric vehicles to store that electricity
• Hardware and software to monitor and distribute it, and
• End-users such as homes, industries, or office buildings to consume it.

A microgrid can stand on its own (“behind the meter”) or can be connected to the larger grid (“in front of the meter”) but have the capability of keeping electricity flowing in the case of a power outage.

The Growth of Microgrids

Microgrids are nothing new. Hospitals, military bases, correctional facilities, fire stations, and grocery store chains have frequently installed microgrids to reduce their vulnerability to power outages.
While 80% of microgrids were supported by fossil fuels in 2020, that percentage is expected to decline as more organizations prioritize renewable energy.

Aiming to become carbon neutral, the Kaiser Permanente medical center in Richmond, California, implemented in 2020 a microgrid fed by renewable energy, replacing its diesel-fueled backup power system. Likewise, in October 2021, the U.S. Department of Energy’s Idaho National Laboratory launched a Net-Zero Microgrid program to integrate clean, renewable energy sources into existing and newly developed microgrids.

The growth in microgrids has been fueled by the precipitous drop in prices for wind, solar, and battery technologies in the past decade. While “behind the meter” microgrids, such as those on campuses, are subject to fewer government regulations, those “in front of the meter” are subject to the same regulatory framework and public utility commission oversight as any other energy supplier connected to the grid. Many states are still in the process of establishing specific regulations for “in front of the meter” microgrids.

To better integrate microgrids into the U.S. energy system, Federal Energy Regulatory Commission (FERC) issued new regulations in 2020 that require utility companies to allow microgrids to provide energy to the grid just like any larger power plant. FERC’s Order 2222 is intended to “lower costs for consumers through enhanced competition, more grid flexibility and resilience, and more innovation within the electric power industry.”

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