Small-scale power grids face giant hurdles

Seen as way to keep power on in towns, none were built amid regulatory challenges
Credit: (Brian Talbot from Flickr; CC BY-NC 2.0)
File photo: Microgrids were touted as ways to keep the power on locally during emergencies.

Town-center microgrids are not proving to be an answer to dealing with power outages that leave critical facilities like local police stations and administrative complexes in the dark.

In a new report prepared for the New Jersey Board of Public Utilities, these microgrids — once touted as a way to increase the resiliency of the electrical network in the wake of extreme storms and widespread power outages — are finding it increasingly difficult to overcome financial, regulatory and legal barriers.

“These microgrids right now are more aspirational and are very hard to accomplish,’’ said Marc Pfeiffer, assistant director of Rutgers’ Bloustein Local Government Research Center and the author of the report “Development of Local Government Resilient Microgrids.”

“It’s the regulatory structure,’’ he added. “We never developed a model to accommodate this type of project.’’

After Superstorm Sandy left 3 million people without power — some for weeks — the state searched for ways to limit the extent of those outages and keep power flowing to critical facilities. One possibility to emerge was town-center microgrids, an alternative favored by a number of local communities.

The BPU provided funding to 13 towns to conduct design studies about building town-center microgrids, and then again to eight of those localities to launch feasibility studies. None yet have moved to actually begin developing the microgrids.

The report concluded that there are examples of successful single-site microgrids, but town-center versions are far more complicated and less common.

That is because town-center microgrids face significant policy-driven hurdles to development, Pfeiffer said.

“The potential for these local solutions can be found through regulatory changes, understanding their impacts on rate-based utilities, and framing public policies to address climate change and environmental justice communities,’’ he said. “These challenges are substantial but not necessarily insurmountable.’’

‘Rethinking’ is needed

Fred DeSanti, a consultant for one of the more promising local microgrid projects in Atlantic City, agreed big changes need to be made to advance the microgrids. “It is going to take a whole rethinking on the part of the utilities,’’ he said.

Among other things is dealing with utility rights-of-way, where microgrids seek to cross and interconnect with the incumbent electric distribution company, as well as how costs are apportioned among facilities served by the microgrid.

Unless those problems are resolved, the state’s efforts to create microgrids will face challenges, DiSanti said. Asked how many of the current projects could move forward without changes, he replied, “Hopefully all, but realistically half.’’

The report agreed. “It makes clear that the market and regulatory environment do not provide a clear pathway for most TC microgrids.’’

In June, a bill (A-5823) was introduced to create a pilot program for implementing town-center microgrids, although it has yet to be acted on. The legislation, sponsored by Assemblyman Andrew Zwicker (D-Mercer), aims to address some of the regulatory and legal problems holding up microgrids in towns like Hoboken, Paterson, Trenton and Montclair.

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