And because these systems are so new, many are customized, which drives costs up. Costs for battery storage-a keystone of DER enablement-are still fairly high. These regulations require rate recovery approval, which can make it difficult for a utility to recoup costs for the capital upgrades that are typically needed to integrate a microgrid into the main grid, and to operate and monitor the microgrid and DERs.Ĭost is a big issue for both utility-owned/operated and behind-the-meter microgrids. There are regulatory restrictions specific to investor-owned utilities, although municipal and cooperative utilities are a little different because they don't have that that level of oversight.

What potential challenges with microgrids and DERs might organizations face?Ĭraig Rizzo: The main challenges for utility companies are regulations and cost. This type of microgrid not only needs intelligence to separate itself from the primary grid when it goes down, but also load balance generation and storage to meet energy demands in real time.ģ. The other type of microgrid is “behind the meter.” It’s owned either by a single customer-like a business park-or a third party that uses DERs and systems to monitor and manage all the resources. When the utility experiences an outage, it can “island” that portion of the distribution system and service it with DERs that either they or third parties own, or a mix of the two. There are two categories of microgrids: The first is a utility-owned microgrid, in which the utility company installs DERs and has a controllable load on a specific portion of its distribution system. Trevor Loose: A microgrid is designed to separate itself from the electric grid and use DERs to operate when an outage is detected on the distribution system.

That’s reflected in different types of DERs, including traditional diesel- or gas-powered distributed generation like combined heat and power (CHP), renewable energy systems including photovoltaic solar and wind energy, and multiple different forms of energy storage. We're now seeing a transition to more energy generation, storage, and controllable load at the grid edge, like commercial, industrial, and residential sites. What are microgrids and distributed energy resources (DERs)?Ĭraig Rizzo: For more than a century, our power grid has generated energy centrally and then distributed it through electric transmission and distribution lines to customers at the edge of the grid.

Are micro grids becoming more popular