Big Corporations Embracing Microgrids: A Threat for Utilities?

by Ken Wells and Mark Chediak, Bloomberg
October 22, 2013

SAN FRANCISCO — Oracle Corp. Chief Executive Officer Larry Ellison plans to build one to power the Hawaiian island he bought last year. EBay Inc. has one to run a data center. The University of California at San Diego and the federal government have invested tens of millions of dollars in the technology.

Microgrids are emerging as a credible threat to the dominance of America’s 100-year-old-plus utility monopoly. The small-scale versions of centralized power systems, once just used against blackouts, are now gaining thousands of customers as homeowners in states with high power costs turn to them as a way to manage rooftop solar systems, cut electricity bills and, in some cases, say goodbye to their power companies.
The systems use computer software and remote measuring devices to control energy sources such as rooftop solar panels and natural gas-fueled power generators. They allow a home or business owner, a college systems engineer or a farmer on a mountainside to generate, distribute and regulate their locally produced power with an ease and sophistication that only utilities had a few years ago.

Not much of a factor a decade ago, microgrids are expected to explode into a $40 billion-a-year global business by 2020, according to Navigant Research, a clean-technology data and consulting company. In the U.S., about 6 gigawatts of electricity — enough to power as many as 4.8 million homes — will flow through microgrids by 2020, Navigant said.

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