US Government Recognizes Microgrids as Pieces in Solving the Climate Change Puzzle

Microgrids are more recognized as effective tools for climate change adaptation as mentioned in the US Global Change Research Program's Fourth National Climate Assessment (NCA). A microgrid is a network of distributed energy resources (DER) that is capable of islanding whether or not it is connected to a traditional utility power grid.

The NCA was released in November 2018, after the US suffered from natural disasters such as Hurricanes Harvey, Florence, and Maria and the California wildfires. For the first time ever, an NCA highlighted the value of flexibility, resilience, and reliability that microgrids provide. The three previous renditions of the assessment (2000, 2009, and 2014) used the word microgrid a grand total of zero times. The 2018 report, however, uses it six times.

The link between microgrids and climate solutions is not as readily apparent as other popular ideas. On one front, microgrids are appealing as a means of integrating renewables. Perhaps more critically is the resilience they provide, as noted in the NCA. The ability of microgrids to provide power to critical facilities such as hospitals and military bases during extreme weather events that may cause grid failure are vital to providing safety and security.

Adapting to Climate Change

Adaptation to climate change will continue to play a key role in driving greater integration of microgrids in the energy sector. According to Guidehouse Insights, the global microgrid market is expected to grow from roughly $6.3 billion in 2018 to $30.9 billion by the end of 2027 with North America (US and Canada) accounting for about 30% of the market.

That said, the climate report did temper expectations of microgrid potential due to the complexities of the energy system and the inherent uncertainties in evaluating costs, benefits, and performance of resilience investments. To avoid unintended environmental, economic, and political consequences from implementing microgrids and other distributed technologies, the NCA recommends evaluating these technologies in a systematic manner with a standardized methodology.

Microgrid development would also benefit from greater geographic coverage in the US. According to Guidehouse Insights’ Microgrid Deployment Tracker, about half of all microgrids in the US are concentrated in Alaska, California, and New York. Such consolidation indicates potential for greater investment across the board, especially in states susceptible to hurricanes, flooding, and other natural disasters.

The Future of the Microgrid Market

Despite the ongoing transitions occurring in the energy sector, there is consensus that the current rate of implementing microgrids and other DER is likely insufficient in terms of pace, scale, and scope to improve preparedness and resilience. To overcome such shortcomings, it is imperative for the government and other industry stakeholders to act on the recommendations found in the NCA. Increases in microgrid deployment may result from actions like including microgrids as part of future infrastructure development, using microgrids for greater renewables integration, and implementing pro-microgrid policy at all levels of government. The recognition from an esteemed report like the NCA that microgrids are a key piece of climate change adaptation indicates a positive trend as the market continues to develop.