Utility Commissions Speak on the Future of the Utility: Microgrids in California, Part I

by Bob Shively, Enerdynamics President and Lead Instructor

In May, we began exploring what state regulators are thinking about the future of the utility. We started by discussing the vision laid out by the Public Utilities Commission of binocularsHawaii.[1] This month we will explore a perspective on microgrids laid out by the Policy and Planning Division of the California Public Utilities Commission (CPUC).[2]

Unlike the vision from Hawaii, it should be noted that the CPUC paper was prepared by the CPUC staff, and it is explicitly stated that the paper has neither been approved nor disapproved by the CPUC. However, it is a good overview of many of the issues that regulators will need to consider in addressing development of microgrids.

What Is a Microgrid?

In defining a microgrid, the CPUC paper uses a definition from the U.S. Department of Energy:

“A group of interconnected loads and distributed energy resources (DER) with clearly defined electric boundaries that acts as a single controllable entity with respect to the grid [and can] connect and disconnect from the grid to enable it to operate in both grid-connected or island [disconnected from the grid] mode.”

So key aspects of a microgrid include:

  • Interconnected loads and DER
  • Defined electric boundaries
  • A single controllable entity
  • Ability to operate connected to the grid, or isolated from the grid

While under this definition a microgrid could serve a single customer, the CPUC paper focuses on what they call an Advanced Microgrid. This includes multiple customers, multiple DERs, resources interconnected on both the customer side and the grid side of the meter, capability to provide grid services, and use of existing distribution infrastructure as well as new dedicated distribution infrastructure.

According to a recent study by Sandia Labs, such Advanced Microgrids are currently evolving from <1 MW in size each to 2 to 10 MW. And in future years individual microgrid projects may become as large as 60 to 100 MW, which is equivalent in size to a small utility generator.[3]

A Simple Microgrid

microgrid diagram


The Benefits of Microgrids

The CPUC paper notes multiple potential benefits associated with microgrids:

  • Provision of high levels of reliability (the ability to avoid outages) and resilience (the ability to quickly recover from outages)
  • Management of local intermittency of renewable resources such as solar and wind
  • Provision of grid resources including dispatchable energy resources, ancillary services such as voltage support, local load shedding resources, and storage or load to absorb over-generation
  • Opportunities to avoid costly transmission or distribution upgrades
  • Financial benefits for customers

However, attainment of these benefits is not guaranteed as multiple regulatory and business barriers impede the development of microgrids. In next week’s blog we will explore what the CPUC paper has to say about these.


[1] See https://blog.enerdynamics.com/2014/05/22/utility-commissions-speak-on-the-future-of-the-utility-a-new-type-of-regulation-for-hawaii/

[2] For a copy see: http://www.cpuc.ca.gov/NR/rdonlyres/01ECA296-5E7F-4C23-8570-1EFF2DC0F278/0/PPDMicrogridPaper414.pdf

[3] See http://nyssmartgrid.com/wp-content/uploads/The-Advanced-Microgrid_Integration-and-Interoperability-Final.pdf, p. 11

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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1 Response to Utility Commissions Speak on the Future of the Utility: Microgrids in California, Part I

  1. Pingback: Utility Commissions Speak on the Future of the Utility: Microgrids in California, Part II | Enerdynamics

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