Governments and businesses seek resilience in a changing climate

Flood protection sandbags with flooded homes in the background
ShutterstockMarc Bruxelle

Billion-dollar weather is a growing trend. But even when extreme weather doesn’t produce damage, weather-related power outages such as those currently gripping California can be costly and people are looking more closely at microgrids and other technologies to help.

Ten weather and climate disaster events across the United States this year through September caused losses exceeding $1 billion each, according to the National Oceanic and Atmospheric Administration. They included three floods, five severe storms and two tropical cyclones, including Hurricane Dorian, which alone has been estimated to cost the Bahamas as much as $7 billion.

"The overall velocity, intensity and impacts of disruptive events is increasing significantly," Andrew Zolli, vice president of global impact initiatives at earth-imaging company Planet Inc., said during a VERGE 19 workshop about extreme weather technologies. Even if you don’t count the additional impact of more severe weather, with population growth, extreme weather events are affecting more people.

This year’s weather-related losses could top last year’s 14 official natural disasters, from hurricanes to wildfires to winter storms, which cost U.S. businesses, residents and governments an estimated $91 billion, according to NOAA. Eighty percent of the total loss, $73 billion, was caused by just three events: Hurricane Michael in Florida; Hurricane Florence in the Carolinas; and wildfires in California and other western states, which caused at least $24.5 billion in damage, according to the agency.

Losing power adds to the impact of a disaster, but even blackouts by themselves can cause economic losses. 

Millions of Californians have experienced blackouts in the past weeks and months, as PG&E and other utilities have shut down the grid to avoid sparking wildfires during exceptionally dry and windy weather conditions. Some economists have estimated that blackouts by PG&E in early October might have caused more than $2 billion in losses to consumers and businesses, according to reports by The Guardian and other news outlets. This week, more than 1 million PG&E customers lost power due to the utility’s proactive shut-offs, and additional outages were predicted in the coming days when high winds were expected to return, according to the utility.

To combat power outages, people are increasingly looking to microgrids.

"Interest in microgrids is going through the roof," said Peter Asmus, microgrids research director at Navigant. "It’s not the only solution, but it’s part of it."

Diesel or gasoline generators are still a popular way to address blackouts. But as more residential and commercial property owners install solar panels and as prices for battery storage systems come down, people are looking at microgrids, either in the near term or in the future, as a way to keep the lights on when the grid goes down. 

Nearly 4,500 microgrid projects representing 26,800 megawatts of capacity are being planned or installed, according to a recent Navigant reportMicrogrids increasingly are being deployed in Puerto Rico and other islands that face hurricane threats, as well as in Asia Pacific countries such as India, where power service in remote areas can be unreliable. The United States is the largest market for microgrids connected to utility grids.

Solar panels in the microgrid that powered the main stage at GreenBiz's VERGE 19 event
Kathryn Cooper
Solar panels in the microgrid that powered the main stage at GreenBiz's VERGE 19 event.
In some recent examples, four Dallas area H-E-B and Buc-ee’s stores weathered high winds and tornadoes earlier this month without losing electricity, thanks to natural gas-fueled microgrids installed by Enchanted Rock, as part of a late 2016 rollout of the company’s onsite natural gas-fueled power generation as a service at H-E-B groceries in Houston, Dallas and other Texas cities. After Hurricane Harvey hit Houston in August 2017, knocking out power to more than 25,000 homes and businesses, the lights stayed on at 18 H-E-B. stores and three Buc-ee’s. 

In the Silicon Valley, manufacturer JSR Micro and Extreme Networks, a network infrastructure company, have tapped Bloom Energy to install microgrids that generate power continuously, using Bloom’s natural gas-fueled fuel cell energy servers, and provide backup power in the event of an outage.

Enterprise software firm VMware, also of Silicon Valley, is partnering with the city of Palo Alto on a solar-powered microgrid to provide resilience and power to critical facilities when the utility grid is down. VERGE Vanguard Award winner Nicola Peill-Moelter, VMware’s director of sustainability innovation, is helping lead that project, which will include a demand flexibility demonstration.

Local governments such as Montgomery County, Maryland; Beaverton, Oregon; and Oakland, California, are also looking to adopt microgrids to boost resilience. Montgomery County, near Washington, D.C., hired Duke Energy Renewables and Schneider Electric to install two microgrids last year at its Public Safety Headquarters and Correctional Center to ensure resilience during a blackout. The effort was undertaken after a severe windstorm in 2012, called a derecho, knocked out power to dozens of county facilities and hundreds of thousands of residents over several days.

The city of Beaverton announced in September that it will partner with its utility, Portland General Electric, on a microgrid composed of solar, battery storage and a backup generator. The Oakland microgrid, EcoBlock, will include home solar and storage, and will be designed to allow residents to go off the grid for several days.

Oakland is also developing "resilience hubs," located in spaces such as neighborhood libraries and recreational centers, where people can go to recharge their phones, obtain a mask on days when smoke from wildfires is severe and have a place to go when the power is out, said Alexandria McBride, Oakland’s chief resilience officer. While the hubs currently use diesel generators to provide backup power during grid outages, Oakland is looking to install solar plus storage at properties that can accommodate it, she added.

Many utilities also want to install microgrids, but often are stymied by state regulators who won’t allow the costs of the microgrids to be spread across all of a utility’s customers when only some would be connected to the microgrid. Utility microgrids cost roughly $2.5 million per megawatt of capacity, on average, according to an October 2018 report by National Renewable Energy Lab (PDF).

San Diego Gas & Electric Co. wants to install 100 megawatts of microgrids backed with battery storage systems in rural areas of San Diego County, as part of efforts to prevent wildfires. The utility has estimated the total cost at $285 million (PDF). But the utility can’t start construction due to a requirement by the California Public Utilities Commission to allow other companies to compete for construction contracts to complete the work.

The utility has spent years testing the capabilities of its solar-powered microgrid in Borrego Springs, a rural community of 2,800 people. The microgrid uses solar power from a nearby solar farm and customers’ rooftop panels, as well as batteries and diesel generators, according to the utility and a report by Lawrence Berkeley National Lab.

"We are seeing in California a strong need to have fully functioning off-grid energy systems powered by clean, abundant renewable energy," said Chris Johnson, chief operating officer of energy storage systems company Blue Planet Energy.

"Most people do not realize that when the grid goes down, solar panels do not work," Johnson continued. "The microgrid is a solution that allows customers to keep some or all of their energy circuits operating when the grid is down, by isolating from the central grid. This 'islanding' is key to resilience and energy independence."

Blue Planet Energy has installed its energy storage systems at solar powered microgrids at schools and clinics in Puerto Rico, Hawaii and other islands. 

The answer to utility power shut-offs is installing microgrids and removing barriers utilities face, primarily from state regulators, to strengthen the grid, a California utility representative said during the VERGE 19 session about addressing extreme weather. 

In addition to microgrids, California utilities want to develop other new technologies to improve and strengthen the grid and accommodate more renewable energy and electric vehicles, the utility representative said.

PG&E said earlier this month that it may accelerate development of 40 microgrids to keep the lights on when the main grid is shut down to avoid sparking wildfires. Areas that experience high winds and fire danger would be prioritized, the company said.