Business Drivers across the Microgrid Landscape
I was at the 3rd Annual Grid Modernization Forum in Chicago in May and was a panelist on the “Keys to Financing Microgrids” session chaired by Matan Metial of S&C. Other panelist included Mark Everette of MWE Consulting and Patrick Norton of Javelin Capital.
I set the framework for various microgrid applications for what I called the “MUSHDIES” market:
M – Military: DOD driven initiatives for energy independence and high resiliency
U – Utilities: Interest in Non-wires Solutions or Alternatives
S – Schools and Universities: Leveraging Owned assets (e.g. wires and CHP) for self-sustaining operations
H – Hospitals: Critical Facilities for life-support and high availability
D – Data Centers: Contractual Uptime Service Level Agreements (SLA’s)
I – Industrial Customers: Energy Savings; Peak Avoidance; Macrogrid Parity
E – Economic Draw and Development: Meeting Green Building codes and Net Zero Energy requirements
S – Safe Haven: Places where power is maintained during emergency conditions and where people can access resources.
While this is not an exhaustive or complete list of applications or use cases, it does provide some of the foundational drivers behind the economic justification.
Mark Everette highlighted the need to build a sound business case that takes into account both “hard” benefits, (tangible) such as cost avoidance or reduction, lost revenue or production, and participation in potential markets for ancillary market service support, etc. and the “soft” benefits (less tangible) such as societal comfort, avoided inconvenience, etc.
Patrick Norton covered the current investment market and funding vehicles for these, and indicated various options exist in the marketplace today.
Microgrids are a reality; EnerNex is helping many of our clients understand the technical challenges, integrate these assets into the distribution network and value their economic value streams.
I welcome your comments on the market for microgrids.