Utilities Betting Big on Microgrids

Many utilities have viewed microgrids with skepticism because of their apparent impact to the bottom-line. This attitude is changing as new technologies now enable utilities to tap into the huge reliability and resiliency value of microgrids. A more practical consideration that is driving this change is the unforgettable impact of Hurricane Sandy. In the midst of this disaster—8.5 million people lost power and more than a million people were without power for a week—two microgrids remained functional. Princeton University and South Oaks Hospital on Long Island, though disconnected from the grid for 3 and 15 days respectively, continued to generate and provide their own power.

Some major utilities are no longer sitting on the sidelines. They are betting big on the microgrid revolution, and given that DERs are no longer a farfetched concept, they are going to come out ahead of the curve.

Below is a sampling of utilities with functioning microgrid projgects, the power generated/used, and the kinds of investments that are driving these projects.

Oncor, Texas
Sixth largest transmission and distribution utility; serves more than 10 million consumers

Microgrid Assets
Operates a combination of 4 microgrids:

  • 9 different distributed generation sources
  • 2 solar PV arrays
  • 1 microturbine
  • 2 energy storage units
  • 4 generators

Power Generated: Total peak capacity of 900 kW
Funding: Utility

Duke Energy, North Carolina
Serves electricity to 7.4 million customers

Microgrid Assets
McAlpine Creek microgrid (test site for new technology):

  • Solar array: 50 kW array; 207 monocrystalline panels (230 with panel)
  • Battery, Inverter, and Control House: 200 kW/500kW Lithium-Iron-Phosphate
  • Solar Inverter: 50 kW three-phase 480V inverter

Power Generated: 24 kV utility-scale microgrid that powers a city fire station located adjacent to the McAlpine Creek Substation
Funding: Fully funded by this investor owned utility

San Diego Gas & Electric, California
Owned by Sempra Energy; serves 3.3 million consumers

Microgrids Assets:

  • Diesel generators
  • Storage
  • Demand Response technology
  • 26 rooftop solar installations (a total of 597 kW)
  • Smart meters
  • Residential energy storage

Power Generated:

  • 26 MW utility-scale solar array
  • (2) 1.8 MW diesel generators
  • 700 kW of distributed solar
  • 1,550 kWh from energy storage

Funding: Public: $10.8 million; Utility: $7.2 million

BC Hydro, Canada
A Crown Corporation; serves 1.7 million customers; Serve 94% of British Columbia

Microgrid Assets: BCIT microgrid:

  • Solar panels
  • Wind Turbines

Power Generated: One MW

Funding: Sources:

  • $4.4 million from Natrual Resources Canada’s Clean Energy Fund
  • $2 million through BC Hydro
  • Third party contributions

Smud Energy
A community-owned electric service since 1947

Microgrid Assets:

  • 10 kW PV
  • 3-100 kW natural gas engines
  • Thermal energy storage
  • Integration and interoperability with demand responsive load control
  • Advanced reciprocating engines

Power Generated: 310 kW


  • $2.9M over 3 years by California Energy Comissioned
  • University of Wisconsin

What we have here is an indication of the changing attitudes towards microgrids. Utilities are no longer sitting on the sidelines. As more utilities— IOUs, municipalities, and cooperatives—are increasingly becoming engaged in the designing, building, and operation of microgrids, it is also becoming clear that the technology to optimize their operation has grown and matured.
Today, utilities can use advanced grid optimization software solutions to integrate and control dispersed microgrids on their footprint in order to maximize the reliability, resiliency, and other auxiliary benefits of microgrids while delivering the sought-after benefits for their C&I customers. The adoption and use of microgrids and Distributed Energy Resource Management Systems (DERMS) to enhance grid operations is only going to grow in the coming years.