IEEE Electrification Magazine - March 2014 - 104

viewpoint

Microgrids Help More
Than They Hurt
By David B. Chiesa and Spencer K. Zirkelbach

here did the myth that
microgrids are going to be
the end of utilities start? We
use the word myth specifically. a myth
is a work of fiction, a story that no one
can explain or trace back to a fact. We
have seen the myth that microgrids
are a threat to utilities grow more
common in conversations at conferences, in publications, and on social
media. We can make assumptions
about how the myth was started.
microgrids are becoming a popular
idea, with analysts forecasting billions
of dollars in revenue potential over the
next five years. major weather events
that knock out service for millions of
customers are sparking discussions
on the reliability and quality delivered
by the electricity utilities. New technologies such as energy storage (eS),
fuel cells, renewable generation, and
grid automation are making the idea
that customers can own, control, and
operate their own power system(s) a
growing reality.
But microgrids are not a future
concept; they are already here. they
are utilized in hospitals when utility
power is lost but the lights and lifesaving equipment in the emergency
room must stay on. they have been
in the northwest territories of Canada for decades, where oil is abundant
but electrical utilities are scarce,

W

Digital Object Identifier 10.1109/MELE.2013.2297182
Date of publication: 18 March 2014

104

I E E E E l e c t r i f i c ati o n M agaz ine / MARCH 2014

forcing companies to run their own
power grids to support the plants and
community infrastructure that make
their businesses possible. they make
sure that the data centers that run
the servers that host the financial
transactions of the world's economic
markets never ever lose power.
in fact, our entire power infrastructure began as a series of microgrids.
the story of the first microgrid reaches back to 1882 when thomas edison
built the Pearl Street generating station in New york City. Pearl Street was
the first commercial power station,
and it supported the loads of lower
manhattan with local generation.
With no support from any other generation sources, Pearl Street was an
islanded grid conveniently located on
an island. as the demand for electricity grew, edison added additional
sources of generation, eventually connecting these small grids throughout
New york to one another.
in the late 1800s, as the demand for
electricity grew, companies were created to invest in the infrastructure and
generation needed to bring power to
everyone. this was ignited by the
invention of the electric meter, which
allowed these companies to accurately
bill customers for the actual cost of
energy instead of, for example, basing
their bill on the number of lamps that
were being powered. Over the next 100
years, these early electric utility
companies expanded their systems

with larger sources of generation, and
the grid as we know it was born.
this historical review is important
because it provides the backdrop of
history against which we can view the
myth of microgrids destabilizing utilities. if all electrical usage started out
as microgrids and early small systems
had to generate and distribute their
own electricity, why was it necessary
for utility companies to be formed in
the first place? the answer is cost. it
was, and still is, vastly more economical to generate power in mass than
for consumers, large or small, to generate it on their own. Sure, there will
always be instances where the economics behind buying, operating, and
maintaining an independent grid
makes sense. But these are few and
far between when compared to the
group of electrical consumers as a
whole. it costs consumers far less to
pay an entity, whether publicly traded
or not, to deliver electricity than it
would if every consumer chose to generate his or her own power. But there
is more than economics at stake. if
every electricity consumer decided to
generate his or her own power 24/7,
365 days a year, the environmental
impact would be astronomical as well.
the simple truth is that economies
of scale will always make the traditional centralized utility-based method of power generation, transmission,
(continued on page 96)

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