Inflection Points: The Dawn of a New Microgrid-Powered Era

At nightfall on December 20, 1880, twenty-three arc lights switched on in New York, casting the cityscape in a blue-tinted glow. In that moment, Broadway Street became one of the first thoroughfares in America to be lit by electricity. While eerie to some and dazzling to others, the invention of electric light introduced an entirely new way of life: the experience of illumination.

It’s hard to imagine that an act as small as passing a current through a filament could forever alter every aspect of culture, industry, and landscape. But as soon as electric lights switched on, communities were connected as homes and businesses became part of an energy network. Workdays also became longer, architecture was transformed by elevators and ever-taller buildings, and the surge of evening social activities added a new word to the lexicon: “nightlife.”

We find ourselves today in a new era of innovation as microgrids play an increasingly important role in our energy networks…and our lives. In today’s electron-thirsty world, the ability of these systems to support resiliency by providing electricity when grid failures occur is critical: it ensures the success of businesses, the safety of communities, and the protection of human life. Furthermore, their ability to integrate distributed energy resources and multiple electrical loads, while operating in concert with the utility power grid or independently in island mode, makes them not only useful, but essential. 

“The true turning point for microgrids in North America was Hurricane Sandy,” explains microgrid expert Dr. Peter Lilienthal, CEO of HOMER Energy. “It became apparent during that devastating weather event that backup generators are inadequate for an extended outage over a large region. Ensuring long-term power was impossible with a finite number of fuel trucks and roads that were unnavigable. Hurricane Sandy also made it clear that in an extended outage, the concept of critical infrastructure needs to be expanded to include facilities like grocery stores, gas stations, and pharmacies, in addition to hospitals and police and fire stations.”

Beyond resiliency, microgrids have proven beneficial worldwide by improving local energy delivery, reducing diesel consumption, enhancing reliability and power quality, and aiding economic growth, while supporting efficiency and clean energy production with the incorporation of renewable generation sources and energy storage.

The remarkable capability of contemporary microgrid systems to power remote sites, in locations otherwise without access to energy, further augments the technology’s indispensable role. “Some of the 1 billion people around the world without electricity may finally get it without ever needing a central power grid,” asserts a recent Quartz article. “While microgrids have given industrialized countries a way to increase resiliency and bring more renewable power sources online, they’re enabling regions without power to leapfrog the 20th-century electrical grid.” 

Remote microgrids currently represent nearly 40% of all microgrid capacity globally with a total of 7,604.4 MW, according to a report by Navigant Research, followed by commercial and industrial, and utility segments, representing 5,542.9 MW and 2,307.9 MW, respectively. 

From the developing world to urban landscape, the benefits of distributed energy systems are becoming widely recognized, inspiring increased investment in new microgrid projects and supportive policy development, as well as rapid market expansion.  

Studies indicate that within the next decade, the microgrid market is expected to reach $30 billion, with the commercial and industrial segment leading the way. And as the cost of supportive technologies and distributed energy resources such as solar PV, CHP, fuel cells, and energy storage decline and new business models emerge, experts believe that the industry will be further propelled. 

Even slow-moving utilities, which were once threatened by the influx of distributed energy resources and considered an impediment to microgrid development, are beginning to plan their own utility-scale microgrid projects. This marks not only an inflection point for microgrid markets, but an exhilarating moment in energy history. 

While the electric light bulb may have inspired one age of illumination, today our world is poised once again to experience an electron-inspired transformation: the global microgrid revolution.

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