Executive Perspective: Grid Resiliency and the Role of Microgrids

Between 2003 and 2012, an estimated 679 widespread power outages occurred due to severe weather. A report issued in August by the President’s Council of Economic Advisers and the U.S. Department of Energy estimates the average annual cost of power outages caused by severe weather is between $18 billion and $33 billion per year. To address this, the report calls for increased spending on the nation’s electric power system in order to increase grid resilience and reliability. An increasing number of industry players are seeing island-able microgrids as part of this strategy. The following interview with Andrew Bennett, Senior Vice President of Infrastructure at Schneider Electric, focuses on this need for greater grid resiliency and how grid-tied microgrids can make a contribution.

Q: What do you think about the conclusions of the Obama Administration’s report?

A:  We’re pretty ecstatic that this Administration continues to look at the problem of grid resiliency. It’s like looking at a bridge that’s about to collapse – it’s not a political issue, it’s an issue of leadership. The report did a good job of quantifying the overall economic impact of outages and taking the guesswork out of it. Whether its 30, 50, or 100 billion dollars per year, we are talking about billions in any scenario.

Q: What are the key technologies to focus on for improving grid resiliency, from Schneider Electric’s perspective?

A:  First, we need to push more and more distributed intelligence out into the network, including automatic reclosures, self-healing capabilities, and a better feeder segmentation strategy, etc. For example, putting no more than 200-250 people on a feeder can isolate the impact of an outage.

Second, we need to bury more infrastructure, which is far more common with European-style networks.

Third, the concept of being able to mobilize substations is going to be an important strategy for costal utilities going forward, as is predictive damage estimation in advance of storms.

Fourth, the need for advanced distribution management systems (ADMS) is an underlying need in all of this. The core solution within ADMS is better SCADA control of your devices. While many utilities are planning to increase investment in smart grid capabilities such as SCADA, a large number of circuits currently have no SCADA control. As a result, utilities don’t have visibility into certain parts of the network, making it difficult for them to respond to outages. Utilities must get to the point where they can quickly identify and isolate faults.

Also, whenever we have a large storm, utility crews from dozens of utilities get involved helping out a stricken area. This creates challenges. Most utilities do not have the IT infrastructure to deploy these extra crews effectively. Building geospatial applications that see the status of connected assets in these situations is critical. Understanding just how difficult this is important.

 Finally, it goes without saying that the proliferation of microgrids will help from an overall islanding perspective. Schneider Electric is extremely bullish on the future proliferation of microgrids.

Q: What do you see as the key drivers behind the trend toward microgrids?

A:  There are three critical things at play here. One, obviously, is grid resiliency and the ability to have island-able sections of the grid if necessary.

 Another is the fact that, at the end of the day, many citizens care deeply about the fuel source for their energy, and more municipals will want to go down the route of distributed generation and renewables. What we’re experiencing in Boulder [Colorado] will happen more often and is a lesson for the industry as a whole: smaller municipal utilities not seeing eye to eye with bigger utilities regarding fuel source.

 Another key driver is the growth in distributed generation. What we’re seeing are a lot of developers taking a larger, campus-wide approach. They know distributed generation will be an important part of their development, and they’re asking us what we can do to help facilitate DG.

Q: How can large, investor-owned utilities leverage the trend toward microgrids?

A:  Investor-owned utilities see microgrids as a possible threat, though there is incredible opportunity here. Many of these utilities need to have a deregulated section of their management in order to take advantage of the microgrid trend – if a section of their user base wants a microgrid and renewable resources, what better entity is there than the utility itself to provide the expertise and network for it? This could equate to more revenue than they would have received from a rate case.

Q: How big is this opportunity going to be?

A:  It’s probably going to be bigger than most of us think today. In three to five years, it will not be uncommon for people to participate in grids that are managed by subsidiaries or third parties apart from their traditional utility. Schneider Electric believes it’s in a great position to be not only a provider of hardware and infrastructure for microgrids, but also be an operator of these systems for customers and take on some of the financial risk. Energy efficiency goes to the core of our company, so it’s a natural move for us to move into reliability – that is, augmenting existing contracts to take in reliability in addition to energy efficiency. In the future these could be for multi-user, multi-site microgrids.

Q: Getting back to grid resiliency, where should the investment be spent?

A:  Not on AMI [advanced metering infrastructure]. It needs to be about pushing distributed intelligence further out into the network and getting intelligence into the feeders – more reclosers, more switching devices, more tie devices. If it was my money, I’d be spending it on that and on overhauling some of the infrastructure, such as the outage management systems that are 10-15 years old. There is some very antiquated outage technology on the network – it’s not just a software thing or hardware thing.

Q: And how are we going to pay for this?

A:  The ratepayer needs to understand it’s about reliability. Most people think we’ll probably see another Hurricane Sandy in our lifetime. So they pay $3,000 for a generator for their home, making personal economic decisions based on their lack of faith in the distribution network. Yet I think most would be glad to spend an extra $200-300 per year as a homeowner in order to not have an outage.

Three years ago all we could talk about it seemed was cybersecurity. That took the conversation away from the reliability of the distribution network, which was unfortunate. We need to get back to that.

EDITOR’S NOTE: Of related interest, Microgrid-News.com is a media partner for the Microgrid Deployment Workshop, November 8-9, 2013 in Cancun, Mexico. Hosted by HOMER Energy, the workshop will feature technology experts and project managers from around the world discussing microgrid systems for remote, off-grid, and island environments. Early bird discount is good through October 20.