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Microgrids Are The Past and Future of Our Electrical Consumption

When Thomas Edison’s first electrical systems were installed in the 1880s only a few privileged homes in New York City could afford it. One of which was the not-so-humble abode of the banker J.P. Morgan, who had his own generation station first set up by Edison himself in 1880. These electrical systems, usually used for lighting, soon became a very coveted luxury. Everyone wanted electricity but only those that could afford a generator in their home or business were able to take advantage of this new technology. 

Seeing this demand, Edison and his colleagues created what was called Pearl Street, the first commercial power plant in the United States located at 255 Pearl Street in Manhattan. It powered a few nearby businesses by connecting everything together with underground copper cables. A central power plant with lines carrying power to each user cut costs and allowed more people the ability to have electricity. This was a stroke of genius and the steam from the plant also provided heating for nearby buildings. After the success of Pearl Street, in 1892 Edison launched a little company you may have heard of called General Electric. Edison, a scientist and engineer by trade, was assisted in the business aspect by J.P. Morgan and Charles Coffin, the first president of the company. 

Although back then electricity was for a few privileged individuals that could afford it, today microgrids, similar in principle to the first electricity systems in Morgan’s home, are providing stability and control that has been lacking for the ever more electrically dependent buildings and companies. Part of the usefulness of these microgrids has to do with the way energy is distributed. After the energy is generated, it must immediately be sent off to power a home or a business or else it goes to waste. Having to use the electricity immediately is the Achilles heel of our modern systems. The storage of massive amounts of electricity is a lot easier said than done. Different forms of energy storage are used, like pumping water to a reservoir uphill or a giant spinning metal flywheel, but battery technology to store electricity on a large scale has not been proven feasible yet. This has become painfully obvious in parts of the South West that are experiencing rolling blackouts as houses turn their ACs to high to fight the record heatwave.

Power lines are another weak link in our main grid system. After electricity leaves the plant, it travels from high voltage lines and slowly gets stepped down through transformers to a more manageable voltage to be used in buildings. With main grid systems power often has a long way to travel before reaching its destination. It is estimated around five percent of electricity is lost in this transmission phase. Having a shorter distance to move the electricity is much more efficient. The reason voltage is so high when leaving a power plant, (upwards of 750,000 volts) is because the higher voltage reduces the current or amp flow through the line which reduces friction and heat. Less heat means less energy lost in the form of heat. 

Microgrids are gaining popularity to help increase resiliency. For many, losing power can be an incredibly expensive or even dangerous possibility. In the event of a power outage, a microgrid can kick on and start powering a building until the problem with the main grid is resolved. Currently, most microgrids are only used as a short term solution to power outages because they typically store electricity in large batteries that are filled by solar panels, wind turbines, or the main grid. If the energy generation from the solar or wind can’t keep up with demand, the grid will no longer be of use. 

Microgrids are now, like most everything it seems, becoming smart. This analytical ability provides a huge benefit to our larger power networks. Smart grids can help inform power generation companies exactly what is needed. They can also provide a way for consumers to adjust their consumption based on the supply constraints at any given moment. Because of these benefits, many local governments are working to provide incentives to those who install and utilize microgrids. Right now, federal incentives exist for solar energy and resilience but not necessarily microgrids as a whole. Companies like Schneider Electric are helping to finance, build, and maintain microgrids where individual companies might not be able to afford the full install. Energy-as-a-service (EaaS) is a financing model for microgrids that allows users pay only for ongoing services and avoid upfront costs. 

As we continue to become more dependent on electricity, we will also see a rise in microgrids and self-contained private systems. Having multiple forms of energy generation and more responsive ways to distribute electricity helps our energy networks become more resilient. Now, more than ever, we are learning the importance of resiliency, a lesson that will likely extend to the way we source our power.

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