Utilities competing with microgrids

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In the wake of increasingly severe weather, microgrids, a critical building block of the smart grid, are becoming a more and more attractive alternative to the power grid.

"At this point in time, microgrids can provide a quality and diversity of services that incumbent utilities have been unable to match," said Peter Asmus, principal research analyst with Navigant Research. "While utilities have shown institutional biases against the entire concept of microgrids for decades, extreme weather events and the growing recognition of microgrids as potential sources of demand response resources are building engineering and cultural support for these systems in a variety of settings."

In fact, projects globally are rapidly increasing, with at least 405 microgrid projects currently planned, proposed, under development or fully operational, according to Navigant Research.

"The microgrid market is highly dynamic, and many projects remain under the radar," said Asmus. "However, the microgrid platform is moving increasingly into the mainstream."

The U.S., where grid reliability is diminishing, is a hotspot for microgrid development. In North America alone, there are 219 projects with Connecticut being the first in the U.S. to move ahead with a policy program to support microgrids. The less reliable the incumbent power grid performs, the greater the interest in applying smart grid platforms such as microgrids to help solve the problem will be.

The full-scale commercialization of microgrids is being driven by falling costs of solar photovoltaic systems and the easing of prohibitions against the operation of distributed generation assets during times of grid stress, as well as an increasing awareness of and confidence in the capabilities of microgrids.

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