NEWS IN THE WORLD OF POWER AND INTEGRATED BUILDING SYSTEMS
> IN RECENT YEARS, utility customers and
electrical contractors have become “winners”
as a result of the growth of distributed
generation (DG), such as rooftop solar,
small wind, microgrids, etc. Customers
have been able to secure their own
sources of power, not only reducing costs
but also becoming less grid-dependent.
Contractors have seen increases in
business as a result of being able to install
and maintain these DG systems.
However, electric utilities have been
behind. As more customers rely on DG, utilities
are finding their revenue streams thinning. In
addition, as a result of a practice called “net metering,” where
public utilities commissions (PUCs) in various states require
utilities to purchase excess DG power from customers, many
utilities actually lose money because they are required to
purchase this excess power at costs higher than they can
purchase “original” energy on the wholesale market or
generate it themselves.
For these reasons, as one might expect, most electric utilities
have not welcomed DG, which has tended to curb even more
significant growth in the DG market.
However, a new concept developed by the Rocky Mountain
Institute, and recently implemented by Fort Collins (Colorado)
Utilities, might be the missing piece that, if adopted nationwide, also can make everyone winners in the DG trend.
The concept is called the integrated utility
services (IUS) model, which deploys various
products and services for residential and small
commercial customers with on-bill financing.
Specifically, the utility is able to seamlessly
weave together various products, services and
financing tools that have not been integrated in
the past, enabling customers to access a broader
range of energy services, including efficiency,
DG and demand-response, into a comprehensive
package, with monthly payments on their electric bills.
When a customer expresses interest in this utility-sponsored package, the utility arranges for an experienced third-party provider (such as a local electrical contractor) to meet with
customers, walk them through the various product and service
options and combinations, conduct audits, and then install the
package selected by the customer. Such a program preserves
utility revenue because the utility is actually the “vendor” for
these products and services.
“These services, many of which continue to experience
technology-driven cost reductions, are likely to be more
profitable than traditional sales of electricity,” according to a
report from the Rocky Mountain Institute.
—WILLIAM ATKINSON IST
Distributed Generation Is a Winning Proposition
Role for Microgrids Expanding
> THE GROWTH OF RENEWABLES
and other energy technology is not just
changing the way consumers get their
power. The trend toward nontraditional
fuel sources also is contributing
inadvertently to the growth of other,
previously ancillary systems that are
riding the wave of green technology.
In some cases, they have become
indispensable to it.
Microgrids, for example, were once
the domain of military bases, universities
and other isolated locales. A variety of
factors is contributing to a transformation
of microgrids into essential tools of grid
That is the conclusion of a recent
study released by GTM Research, a
division of Greentech Media. The July
study, “North American Microgrids
2015: Advancing Beyond Local Energy
Optimization,” examines a number of
changes underway. The conclusions
point to rapidly evolving technology and
an equally rapid market expansion.
For example, according to GTM,
various state-level resiliency programs
are encouraging development
and standardization of microgrid
technologies. Regulatory and legislative
changes to utility franchise rights and
rate structures are also creating a more
favorable market for microgrids. Finally,
microgrids are benefitting from the
growth of renewables. In particular,
they are becoming an essential tool for
integrating the exploding capacity of
The convergence of these trends has
helped transform microgrids into a grid-modernization tool for utilities, cities,
communities and public institutions.
While the market is growing, the
technology is also evolving. According
to GTM, this new wave of microgrids is
cleaner, more flexible and increasingly
complex, with the potential to
dramatically alter the power landscape in
the United States.
The report projects the microgrid
market to more than double in the next
five years, both in terms of installed
capacity and annual value. Total
microgrid capacity in the United States
is expected to exceed 2. 8 gigawatts (GW)
by 2020, rising 127 percent from 1. 3
GW at the end of this year. The annual
market value is expected to grow 267
percent during that period, to more than
$829 million annually.