US Senate Recognizes Hybrid Microgrids as Part of Energy Modernization Act

Microgrids at Corner of Energy and EconomicsThe US Senate passed a bipartisan “Energy Modernization Act” last week. Despite its many shortcomings (Katie Herzog, writing for Grist, describes the bill as an “…energy modernization bill that would have been modern in 1980”), the bill has one feature particularly noteworthy for those of us in the microgrid world – it explicitly calls out microgrids as part of the future US energy solution, for both basic electricity delivery in remote communities and resilience for the grid-connected communities that make up the vast majority of US households.

What Exactly is “Energy Policy Modernization”?

If you care about climate and the environment, there is plenty to be unhappy about with this bill. Environmental groups are decrying it as an uneven compromise that continues to favor “dirty and dangerous fossil fuels.”  A concrete example is classifying the burning of biomass as carbon neutral. (While it’s true that biomass can be carbon neutral or close to it, certain biomass sources take so long to renew that they are definitely not neutral in any meaningful way.) It includes provisions to make natural gas exports easier. It’s a bipartisan bill passed by a Republican-dominated Senate – it’s going to have stuff that many don’t like.

But – there is a lot to like in the bill, despite its shortcomings. In particular, Senate Bill S.2012, the “Energy Policy Modernization Act of 2016,” contains section 2303, “Hybrid micro-grid systems for isolated and resilient communities.” Plenty has been written about the bill and its contents elsewhere (see links at the end of this article). Promoting renewable energy and energy efficiency is not rocket science, and neither are these concepts particularly new ideas. They are, however, critical ideas to include in energy policy. But explicitly calling out not only microgrids, but hybrid microgrids? That is truly revolutionary.

The bill defines a “hybrid micro-grid system” as “…a stand-alone electrical system that (A) is comprised of conventional generation and at least 1 alternative energy resource; and (B) may use grid-scale energy storage.” The significance of this definition is that the bill explicitly recognizes that the microgrids being promoted here must contain an “alternative” energy resource. Hybrid microgrids are not VHS technology in a digital world. Hybrid microgrids are as significant to the revolution of our energy landscape as the internet has been to information. Recognition from the lead US legislative body that microgrids are an important part of the US energy future – both for isolated communities and for grid-connected communities – is revolutionary as well.

From the Village to the City – Native Alaskan Villages Lead the Way

It’s no coincidence that the bill’s co-authors are from Alaska and Washington (Lisa Murkowski, R-Alaska, and Maria Cantwell, D-Washington). Alaska has more than 180 communities not served by a regional grid, most of these with native Alaskan majorities, and all of them with extreme climates, in which the stakes are high for electrical power. These communities have been completely energy “self-sufficient” for decades, but they have accomplished this primarily with diesel generators, leaving them vulnerable to issues of both cost and delivery.

HOMER Energy and other organizations have been working with the Alaska Energy Authority for years to develop cost-effective, reliable hybrid microgrid systems for Alaskan villages. These are cutting edge “smart grids” – they combine diesel, wind, and storage. They use wireless technology that combines distributed load control and energy storage to produce some of the highest renewable energy penetrations in the world (http://microgridnews.com/the-first-true-smart-grids-are-being-built-today-in-alaska/).

The grid-connected microgrids just coming to light, recognized in the bill as “resilient communities” have somewhat different technical and economic challenges than those in remote communities. But the fundamental lessons of these first systems will lead the development of microgrids elsewhere. In the end, it will be the villages that light the way.

Microgrids Must Stand at the Corner of Energy and Economics

The hybrid microgrids that already light up villages in Alaska, Africa, remote Australia, and islands throughout the world were not built because of some kind of idealism. They were built out of economic necessity. The HOMER software that HOMER Energy continues to improve and distribute was originally developed at the US Department of Energy’s National Renewable Energy Laboratory to find the intersection between economics and technology that could bring affordable power to remote areas.

And that’s where we believe that microgrids have the real potential to change the world – at the corner of energy and economics. This single “technology” (hybrid microgrids are more of a framework than a technology per se) has the potential to reduce carbon emissions and bring power to every village and home in the world, no matter how remote, provide resiliency and stability to grid-connected systems, save the lives of soldiers by reducing fuel deliveries to forward operating bases, and put control of electricity generation and distribution back in the hands of the communities that use it. The seeds of change may begin with idealism, but change takes off because it brings tangible benefits. The US energy landscape has been driven by policy and subsidies for decades. Microgrids have the potential to drive the shift from subsidy to solid economics. We think that’s worth some recognition.

Next Steps for the Energy Modernization Act

Passing this legislation was no small feat in a divisive congressional climate where the political stakes for the bill’s co-authors were extremely high. Now the real political challenge begins as the bill goes to conference committee to try to hash out the differences between the Senate version, lauded as a hallmark of bipartisanship by some, and the divisive, partisan House version, which has been called “worse than nothing.” Let’s hope that Senator Murkowski can manage the conference committee as skillfully as she managed the Senate and get a bill to President Obama that he can sign.

More articles on the Energy Modernization Act of 2016:

Senate Energy Bill Better than Doing Nothing

https://www.washingtonpost.com/news/energy-environment/wp/2016/04/19/the-surprising-things-democrats-and-republicans-agree-on-when-it-comes-to-energy/

http://www.nytimes.com/2016/04/21/us/politics/senate-passes-broad-bill-to-modernize-energy-infrastructure.html

http://thehill.com/policy/energy-environment/276965-senate-passes-energy-reform-bill

https://www.washingtonpost.com/news/energy-environment/wp/2016/04/20/the-senate-just-passed-overwhelmingly-an-actually-bipartisan-energy-bill/

https://ecowatch.com/2016/04/21/senate-energy-bill-ignores-climate/

http://grist.org/news/senate-passes-energy-modernization-bill-that-would-have-been-modern-in-1980/

http://www.alaskapublic.org/2016/04/20/how-murkowski-crafted-an-energy-bill-that-80-senators-have-a-stake-in/

http://www.platts.com/latest-news/electric-power/washington/us-senate-passes-wide-ranging-energy-policy-bill-26424158

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