Making Sense of Utility-owned Microgrids

Delivering Distribution-level Resiliency with Substation Microgrids

Hurricanes and wild fires destroying electrical infrastructure and new threats of cyberattack have brought the need for energy resiliency to the forefront and put a spotlight on microgrids. Often touted as a catch-all solution to resiliency, microgrids are complex solutions requiring sophisticated engineering and solid, robust controls. The right technologies, architectures and controls can simplify the delivery of complex microgrid solutions to customers.

Customers who can benefit from microgrids take many forms. A hospital cannot function if lifesaving machines are not powered. Datacenters cannot function if servers are not online. But how does a utility offer a microgrid to a hospital? Can it own a distributed energy resource (DER) on customer-owned property? Is it even economical to deliver a microgrid vs. traditional poles and wires?

These questions regarding customer-sited microgrids will not be answered until lengthy regulatory, policy and tariff changes are enacted. Current regulations and policies, however, do allow utilities to own and operate a microgrid located in front of customer meters at substations. Rather than focus on delivering a microgrid to end users, this article addresses what utilities can do in the micro space today.

Before further discussion, however, it’s important to address the often-asked question, “what is a microgrid?”

As with many words in the lexicon of cleantech, microgrid is commonly used and seldom understood. Sometimes it is used to describe a solar plus storage installation; other times as a blockchain application to virtually net meter energy across two nonconnected loads. The latter is not a microgrid and the former is a microgrid only if it can work when the grid is down—this is the key.

A microgrid is any collection of DER(s) and load(s) that can be islanded away from the larger electrical grid, provide stable and reliable power while in this islanded state, and then safely synchronize and reconnect once the grid is back up and running.

Substation Microgrid

With microgrid defined, it now makes sense to discuss the benefits a microgrid can provide at a distribution substation. Those include: 1) downstream resiliency, 2) transmission-level peak shaving, and 3) increased headroom via power factor correction.

A tangential benefit worth mentioning is that substation land is generally owned by the utility. Determining site control and land lease terms lengthen and add expense to project development. With this a non-issue for microgrids located at the substation, real costs are immediately realized relative to customer-located microgrids.

Downstream Resiliency

A properly designed substation microgrid will provide instant backup power to downstream customers, should delivery from the transmission grid fail. Once the transmission grid is repowered, a microgrid with real time control will immediately detect the return, synchronize across the open point of common coupling and then reconnect the microgrid in parallel.

Transmission Peak Shaving

Just as large commercial customers pay demand charges to utilities, utilities pay similar charges to independent system operators (ISOs). A set of DERs, such as battery energy storage and natural gas generators can run at times of peak load demand and realize real costs savings for the utility.

Increased Headroom

Smart, next generation microgrids will incorporate energy storage. If intermittent renewables are in the equation, storage is a must-have asset to commutate and balance renewables under islanding. Today’s leading energy storage systems come with four-quadrant inverters that can inject and withdraw reactive power, or vars, to balance power factor. With the ability to deliver a power factor near 0.99, energy storage can help a utility avoid building traditional poles and wires should load growth outpace substation capacity at today’s power factors. | PGI

Steven Lichtin is the director of business development at Go Electric Inc., which develops customer side of the meter energy solutions that help facilities, communities and military bases be energy resilient and sustainable. Steven has been building and developing clean and resilient energy projects for nearly a decade, and previously worked in finance after completing his undergraduate degree. He holds an MBA in sustainability from Bard College, and a bachelor of art’s degree in economics, with a minor in finance, from Vanderbilt University.

Previous articleStopping the Gaps
Next articleCustomer-Savvy Future
The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

No posts to display