When superstorm Sandy knocked out power all across lower Manhattan last month, one apartment building had its electricity, heat, and water service restored in a matter of minutes, rather than days. The secret? A miniature power plant resting in the building’s basement.
The Breevort, on 5th Avenue in Greenwich Village, has a natural gas-fired co-generation unit that’s capable of supplying most of the 20-story building’s electricity and heat, even when the power grid is in normal working order. But when the storm hit and the lights went out, the co-gen system shifted into “island” mode—and ran, with enviable smoothness, completely independent from the grid. The Breevort’s residents and their neighbors—many of whom visited to warm up and charge their gadgets—were able to witness for the first time just how this generator, installed as part of a green building initiative, can operate as a “microgrid” when the larger power grid around it has failed.
“You see the value of having a system like this,” says Diane Nardone, the president of the Breevort’s board, who spearheaded the microgrid initiative. “At first people were upset and didn’t want to spend the money on it. But I have to say, for the most part, they have been converted.”
Microgrids were trusty workhorses at dozens of locations during Sandy. As many business owners and universities saw, this type of distributed energy helps make the grid more reliable, even if it’s just in pockets. And in the wake of Sandy, expect more organizations—such as hospitals, city offices, and shelters—to consider switching to microgrids as a way to ride out the next storm.
Co-generation machines aren’t new, but technical advances and cheap natural gas—a result of the domestic drilling boom—are making them more appealing. With the right type of inverter, a generator can switch to independent microgrid mode and tie in solar panels and wind turbines, too.
Compared to power that comes directly from the grid, co-generation systems are super-efficient. They use fuel to make electricity on-site, and all of the heat given off during that process—which in a conventional power plant would likely go to waste—can be captured and used to heat water, or even a building. For customers who need both heat and electricity, the energy savings alone can make microgrids an attractive option.
But another draw is just basic self sufficiency—and for some, it’s the biggest draw of all. Retail giant Wal-Mart is already pretty far along in using distributed energy: 75 percent of its U.S. stores will have solar panels by the end of this year. Now the company is exploring power systems, including a new fuel cell system that can keep part of a store working if the grid fails, says David Ozment, the director of energy at Wal-Mart.
“We are so dependent on [electricity from the grid] to keep the whole business machine running, it really presses companies to start thinking more about being grid-independent,” he says. “That creates its own economic incentive to look at these things.”
Given all these benefits, why, then, do microgrids make up such a tiny portion of our power distribution system overall? Part of the reason is the upfront cost. A typical military base, hospital, or jail might be willing to invest in a microgrid, because continuous and uninterrupted power is absolutely vital. But microgrids require a significant investment and some degree of expertise to operate. And the dividends they yield aren’t always immediate.
More fundamentally, microgrids are simply at odds with how the current electricity grid operates and how utilities are regulated. For one thing, utilities—which, after all, are in the business of controlling as much of the power flow as possible—typically don’t have a financial incentive to encourage the development of microgrids. There’s also the fact that any kind of micro-generator that might feed power back into the transmission network needs to be carefully monitored to avoid danger to line workers.
“The whole grid was designed so you could not have microgrids,” says Peter Asmus, a senior research analyst at Navigant Consulting. There’s definitely been a recent uptick in interest in microgrids, he adds, “but that interest is coming from customers, not utilities.”
Still, there are signs that rules and attitudes may be changing—at least in part because of more frequent weather-related power outages. After Sandy, Connecticut governor Dannel Malloy—who estimates that his state lost $1 billion from three big storms in the past two years—said he will seek $3.2 billion in federal money for infrastructure “hardening,” including burying transmission lines that are currently located above ground and building microgrids in high-density areas. The state this year already created a $15 million grant program to test distributed generation at critical facilities.
Given how microgrids could redraw the electric grid map, don’t expect most utilities to embrace the concept. But a few are experimenting and even considering new business models. “We can go to regulators and say, for public policy reasons, you should want us to run [microgrids] for hospitals, schools, fire houses, or municipalities, ” Ralph Izzo, the CEO of the New Jersey utility PSEG, told me at a recent conference.
In the meantime, though, it’s big energy users—understandably concerned with the grid’s fragility—who will ultimately drive the acceptance and adoption of microgrids. One of these big energy users happens to be the federal government. A number of military bases and large government campuses, such as the FDA’s White Oak research lab in suburban Maryland, are already experimenting with microgrids as a means of avoiding costly outages and the many headaches they can cause.
In the case of the Breevort apartment building in New York City, it will take a little longer than the seven years residents had been told it would take before their co-generation system recoups the upfront expense. But whatever financial sting residents may have felt when the system was first installed had been all but forgotten when it worked exactly as billed, right when they needed it most. “Once you go through a storm like we just went through,” says the Breevort’s Nardone, “all of a sudden, that doesn’t become the primary focus.”