New Generation of Microgrids Hampered by Outdated Utility Rules


Microgrid at Alabama Power’s Smart Neighborhood
Photo by Oak Ridge National Laboratory

Peter Asmus, Research Director at Guidehouse Insights, has been tracking the development of microgrids for over a dozen years. He’s written more than 100 articles on microgrids. In a recent episode of The NetPositve Podcast, he talks about the genesis of microgrids. For the most part, they originated out of necessity in the developing world. Many, if not most, microgrids in the world today are not connected to the grid.

But now, microgrids are coming of age in the “developed world” where there is a grid. They operate in parallel with the grid for resilience. Asmus noted that initially Europe scoffed at that concept because its grid was so reliable. But today, given extreme climate events throughout the world, including recent and devastating flooding in Europe, and thanks to dramatic drops in solar and storage prices, coupled with smart control technologies, microgrids make sense in many applications and locations. In some cases, they can pay for themselves through daily operations. They can be financed. Microgrids have come a long way.

What is Holding Microgrids Back in North America?

In the podcast, Asmus talks about barriers to the implementation of microgrids. He characterizes the state of microgrids as “inching along to full commercialization.” He notes that yes, there’s lots of activity. Lots of microgrid projects are providing values. But he explains that microgrids are held back in some ways.

Outdated utility rules. Deployment is still hampered to some extent by old-school, monopoly rules, like the “over the fence” rule. In most states, you cannot run a line over the fence and power your neighbor’s property. Not even during an outage. That will change in time.

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