Renewable Energy Resilience

Nanogrids, Microgrids and Virtual Power Plants

Expert on new energy business models such as nanogrids, microgrids and virtual power plants, covering cutting edge energy and environmental issues for over 25 years.

Do Microgrids Disrupt the Traditional Utility Business Model?

The classic story line about microgrids is that they challenge electric utility monopolies in multiple ways. Up until recently, the vast majority of microgrids deployed in North America, currently a global hotspot for microgrids, were developed by third parties. Not only that, they were designed primarily to offer economic and resiliency benefits to consumers, with the interests of the incumbent utilities almost an afterthought.

That simpleminded view of the world is being challenged by the concept of a “utility distribution microgrid (UDMs),” a concept first put forward by Navigant Research in 2012. Since that time, the number of utilities exploring their opportunities in the microgrid space is growing dramatically.

One could argue that microgrid sprung up as a response to customers not getting what they need from traditional utility service. UDMs turn this premise on its head. They can help utilities manage recent distributed energy resource (DER) employment trends to their advantage. Microgrids owned or operated by utilities can serve the distribution grid first and foremost as well as be a platform for new services for customers.

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How Developing World Is Pushing Innovation in Microgrid Space

Microgrids are being developed in mature industrial markets such as the U.S. to provide premium, high quality clean power to a broad array of customer segments, even more dramatic creativity is occurring on the business model front in developing world markets such as India, Africa and Iraq. Here are three companies moving the needle in terms of technological advances fueling new creative ways to control, finance and implement microgrids.

The first company is SimpliPhi, which got its start in 2002 developing off-grid portable power systems for Warner Brothers and Disney film shoots. The company’s portable power units – “libertypaks” - were used in locations as diverse as the Amazon and New York City. The company then found a home for its technology for the Marine Corp. in forward operating bases in Afghanistan and Iraq, relying upon lead acid batteries and diesel generators, optimized to reduce fuel consumption and save lives. 

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Public Utilities + Solar PV + Energy Storage = Win-Win

The stars appear to have aligned for distributed energy resources (DER) to play an increasingly important role in providing energy services to consumers. Some see this growth in capacity from devices such as solar photovoltaic (PV) panels, fuel cells, advanced batteries, and other forms of DER as the supreme threat to incumbent distribution utilities, echoing the much-ballyhooed “utility death spiral” story line. Others see this evolution as an opportunity for utilities to reinvent themselves, aligning their business strategy and business models with the emerging digital economy.

Either way, it is going to be a bumpy ride into the future. Yet there are signs that it is possible to create win-win scenarios by leveraging the diverse services that energy storage can provide. Advances in software that can optimize DER to provide bidirectional value along with the bridging capabilities that energy storage brings to the market can create order out of what would otherwise be chaos.

Is there a way for everyone to come out as winners? The key is intelligent distribution networks, an ecosystem of solutions that spans concepts such as nanogrids, microgrids, and virtual power plants (VPPs.) These three platforms were described in a previous blog

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Arctic Circle Hot Spot for Renewables

The market opportunity for remote, off-grid power is immense, as was verified in a report released late last year sizing this market including projects that met Navigant Research’s definitions of both nanogrids and microgrids. According to this analysis, the total value of the assets and services that could flow into this huge global market over the next ten years could reach more than $200 billion.


As was reported in a previous blog, one could make the argument that Alaska, sitting within the Arctic Circle, is a global leader on remote microgrids, with almost 140 such systems identified in the most recent version of the Microgrid Deployment Tracker representing over 900 MW of capacity. The vast majority of these remote microgrids incorporate some level of renewable energy. In fact, Kodiak Island reached nearly 100% renewable energy generation during 2014. Several local utilities have set goals ranging from 70 or 80% renewable penetration within the next 5 to 7 years

It turns out innovation on renewables and remote microgrids is not limited to Alaska. The Alaska Center for Energy and Power (ACEP) is co-leading a new program to be launched this summer for countries whose borders venture into the Arctic Circle. Dubbed the Arctic Renewable Energy Network Academy (ARENA) program, this program is a formal project under the US Chairmanship of the Arctic Council, with 4 of the 8 countries co-leading (so far), including Canada, Finland, and Iceland, along with the U.S. (Alaska). This program is designed to bring together practitioners from throughout the Arctic to learn from one another with the goal of increasing the number of hybrid-renewable energy systems installed across the Arctic.  “ARENA is focused on the Arctic now, but we are hoping to expand it to other regions in the future, if we are able to find some partners,” said Gwen Holdmann, ACEP director. 

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New York County Shows the Way on Community Choice Microgrids

I tried to help develop a microgrid in the small rural community of Point Reyes Station back in 2008. I was an independent writer and community organizer at the time, and Marin County was set to launch California’s first “community choice aggregation” (CCA) program, which empowered local governments to contract for power supplies, while the incumbent investor-owned utility still maintained the poles and wires as well as billing.

Due to some last minute snafus, the project, which would have incorporated existing solar, wind and biogas power generation, did not get funded. A study I conducted also concluded that the CCA market structure alone could not support a full microgrid implementation since it did not have the authority itself to manage the power grid itself, enabling safe islanding and requiring an interconnection agreement. As I reported in the San Francisco Chronicle, a small solar PV and battery nanogrid was installed at the site – a community center – but it was quite primitive and not rolled into the CCA, which now goes by the moniker of Marin Clean Energy.

Flash forward to the present. Westchester County in New York is moving forward with a unique CCA program that breaks new ground on several fronts, including an attempt to create a community-based energy program incorporating several features beyond the typical CCA menu of wholesale power purchases and local distributed generation.

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Paris Postcard: Can the Developing World Do Its Part to Slow Climate Change?

With negotiators gathering in Paris Climate Summit this week, talks will likely be dominated by the need for mega-projects of scale to help stem the rise in global temperatures linked to our deep addiction to fossil fuels. Though there is no doubt that developed economies such as Europe will need large off-shore wind farms in the North Sea and equally massive solar farms in North Africa to reach existing targets, a much more interesting question is this: How can the developing world contribute, given the fiscal challenges facing the Bottom of the Pyramid (BOP) populations?

A quick answer: Through a major scaling up of both remote microgrids and nanogrids.

In a forthcoming report, Navigant Research forecasts the size for both of these off-grid networking platforms designed to increase renewable energy content for off-grid power. Ironically enough, it is here, in the deep jungles near the Equator or the frozen tundra of Siberia, where renewable energy resources such as solar and wind actually reduce energy costs. 

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Will One Company Conquer the Distributed Energy Space?

I have often suggested that I don’t see any single company ever dominating the distributed energy space with networking platforms such as microgrids. My recent Microgrid Leaderboard report, which ranks microgrid developers/integrators that offer their own distributed energy resource (DER) controls platform, underscores this point. All 15 companies that were ranked were, in the very least, contenders, with only three emerging as leaders according to this report’s criteria.

Some disagree. After this report was released, General Electric made a major announcement that raised some eyebrows, launching a new company called “Current,” an aggregation of existing business units currently valued at $1 billion. Jan Vrins, global energy practice leader here at Navigant, suggested in a recent blog this move positions GE in a role of the “network orchestrator,” a business model that may prove to be the most profitable over the long term.

Current is designed to bundle previously disparate business lines offering LED lights, solar PV, energy storage and electric vehicles into a single start-up located within the walls of GE.. Many in the industry are curious as to how this will play out, among them yours truly.

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Transactive Energy: Up in the Cloud with Virtual Power Plants

Much has been made of how changes in the way energy is bought, sold, and managed could spell trouble for utilities.  This is also known as the much ballyhooed theory of the utility death spiral.  Though some dinosaurs may indeed fail, the vast majority of utilities will still be around for quite some time.  Those who will profit the most will be those who understand – sooner rather than later – how new technologies and new markets are transforming the electricity business.

The evolution of energy markets is accelerating in the direction of a greater reliance upon distributed energy resources (DER).  The technologies and new frameworks necessary to manage this increasing two-way complexity remain unclear.  Nevertheless, successful strategies are being deployed today all over the globe.  One such strategy is a virtual power plant (VPP).

VPPs can be viewed as one manifestation of the concept of transactive energy, whereby new technologies such as demand response (DR), solar photovoltaic (PV) systems, advanced batteries, and electric vehicles (EVs) are transforming formerly passive consumers into active prosumers. At the beginning of this year, the GridWise Architecture Council defined transactive energy in the following way:

“Transactive energy refers to technologies managing the generation, consumption or flow of electric power within an electric power system through the use of economic or market-based constructs while considering electric reliability constraints. The term “transactive” comes from considering that decisions are made based on value. The decisions made may be analogous to or literally economic transactions.”

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Microgrids: From Apples to Oranges

The chief challenge with putting together the recently published Leaderboard report on microgrids -- our first ranking of companies active in the microgrid market -- was trying to develop an apples-to-apples comparison. I tried to narrow the field to just developers and integrators with their own controls platforms, but there were still lots of grey areas.

What if we were to turn the general assumption for our leaderboard format on its head? In other words, why not an apples to oranges listing? In this blog, I will go out on a limb and highlight three companies not included in our leaderboard report, but which I think deserves special mention due to their near-term impacts on the overall global microgrid market, regardless of what their role is in this market. In my last blog, I already highlighted two companies, a utility (Commonwealth Edison) and an energy storage and smart grid innovator (S&C Electric) not included in the Leaderboard, both being disqualified for inclusion since the ranking excluded utilities and vendors primarily focused on energy storage integration. 

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Locavolts Unite: Volume I: Fun Facts on Wind Power, Manufacturer Energy Costs, Nuclear Power and Drones

The traditional argument has always been the being green is great, but it costs more. That basic assumption is being turned on its head these days on a variety of fronts.

Here’s just one example. The much ballyhooed federal Environmental Protection Agency (EPA)’s ‘Clean Power Plan” has been assailed by the fossil fuel industry – especially coal – as a disaster for the economy. Consumers would bear the brunt of this transition to cleaner power sources, and our fragile economic recovery would also be jeopardized.

Yet a recent study shows that the cost of natural gas – which currently supplies roughly 58% of California’s electricity supply – would go down, not up, if wind power is substituted for traditional polluting fuels. In fact, the benefit could add up to $20 billion nationwide every year

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©2016 Peter Asmus. Photo credit: David Clites. Website by: