Microgrids and DER: Are We Getting the Terminology Wrong?

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In the summer of 2017, another S&C blog item delved into whether, for utility microgrid adoption to grow, we need to change the microgrid name to something else. A similar topic came up again at a recent Hawaii Public Utilities Commission microgrid meeting. During one of the presentations, the presenter made a great point. He said the most important thing for everyone to remember about a microgrid is that first and foremost it’s a distributed energy resource (DER).

The presenter went on to say microgrids are actually a subset of a DER. They are a specialized case of DERs because they are able to separate from the grid and continue to provide power to their supported loads.

This point came up for discussion again later in the day, and the most common response was, ‘what do you mean?’ The group was asked to think about it this way. Consider the possible DER components of a microgrid—solar, energy storage, wind, diesel, natural gas, hydro, and others. If just one of them connected to a utility grid, how would the utility handle it? The response was they’d use a standard interconnection.

My point here is, the utility would treat that singular generation source like any other DER–because it is. But what if we put one or two additional energy sources on the grid at the same point? Or three? Wouldn’t it still be the same, albeit a little more complicated? I think it would.

Now, when I tell an interconnection agency my DERs can disconnect from them whenever I want them to and continue to run–it’s called a microgrid. Because of one additional feature, my DERs are now classified as a microgrid and don’t get treated like a traditional DER. Why not? When the DERs are grid-connected, they are just like any other DER, aren’t they?

At the same time, I can see the other side of the problem as well. What if the utility is counting on one or more of those distributed energy sources for grid services? Say a third party has contracted to dispatch an energy resource for frequency regulation. Now, because it’s part of a microgrid, if its owner is notified of an upcoming storm, it will want to island away from the grid during the storm. In essence, under the scenario I just described, we took an asset the utility could rely on to help maintain grid stability and made it unavailable. So yes, this subset of DERs could compound a utility’s problem by disconnecting that potentially beneficial source just when it’s needed most. That potentially could make their jobs harder.

One team at the conference had a ready answer for this scenario: This should be compensated as a less-valuable type of DER if the ability to island away is retained by the DER owner. It’s just another business case for the DER owner to consider. Is the ability to island or an improved return more valuable to the DER owner?

Here’s my point. Microgrids are a subset of DERs. To utilities, they are a less-valuable subset of DERs to a grid-serving entity. To customers, they are a more valuable form of DER because they are flexible and have the ability to island. They can be used like a traditional DER or be reserved from those markets for reliability.

Why is everyone treating microgrids differently from DERs? Let’s view them first as a distributed energy resource and then as a subset of DERs that can island away from the larger grid. Financially separate, but technically very similar.

I’d be interested in learning your thoughts on how the role distributed energy resources plays in defining microgrids in the Comments section below.