Texas Model Builds the Business Case for Californian Resiliency

Modular, low cost microgrids can provide long-duration resiliency services to local government critical facilities and a wide-range of host customer sites. They also help integrate variable renewable energy supplies from large-scale wind or solar farms at the transmission grid operations level. The duality of modular microgrids is demonstrated in the Electricity Reliability Council of Texas market, the largest US wind power market. Can a similar approach be applied to other markets like California, which has faced several long-duration outages over the last 3 years?

Can Modular Microgrids Help California?

California is on a growing list of states establishing longer-term 100% clean energy targets. As the state pursues its aggressive renewable energy goals it bumps up against the need for greater resilience due to wildfires and utility public safety power shut-offs. And while state and local regulators look to phase out all fossil fuels, the state is increasingly reliant upon diesel generators and other fossil fuels to keep the lights on during outages.

The state is in a conundrum. Despite California adding 7,228 MW of distributed solar PV under the California Solar Initiative beginning in 2007 and 2018, most of this capacity is not available during power outages. Due to long-standing safety protocols, the majority of solar PV deployed to date shuts off when the larger distribution grid goes down. While recent outages spurred interest in pairing such solar PV systems with batteries, the goal to sustain long-duration outages with these two resources often renders this approach uneconomical for most customer-facing outages 4 hours or longer.

Flexible resources that respond quickly, ramp up and down, and operate in ways that minimize greenhouse gas emissions (compared to diesel backup generators and traditional gas peaker plants) are particularly valuable to grid operators. If deployed at the distribution level, cleaner burning natural gas appears to offer a viable solution—especially if only called upon in rare instances. These instances could include unplanned outages, or responses to signals from the transmission system where balancing resources are required on short notice to fill in when the wind stops blowing or clouds cover large solar PV farms.

Natural gas-based microgrids, like those built for Enchanted Rock, can be deployed quickly. This process is detailed in a recent white paper, Resiliency Microgrids, from Guidehouse Insights and Enchanted Rock. If the microgrids are allowed to give back to the grid under a new shared economy business model they can often be paid off in 1-2 years. The company’s approach to microgrids flips many assumptions about this platform on their heads. For example, the company, along with a growing pool of other vendors, challenge the idea that microgrids are expensive, time-consuming projects out of reach for most electric utility customers.

Regulators Tackle Cleanliness and Resiliency

Utilities, regulators, and other energy stakeholders in places like California face serious, often-conflicting challenges in delivering both clean and resilient electricity. Cleanliness and resiliency are often tackled separately, but the white paper argues that smartly resourced microgrids can help support both goals. Regulators are working to solve these issues. One strategy is through the Order Instituting Rulemaking related to SB 1339, but further reforms are needed. For example, reforms to California’s resource adequacy program, which still revolve around transmission level resource assessments, could help encourage this market. California could take a lesson from Texas as to how to create greater value from microgrids that offer resiliency and help build bridges to a renewable energy future.