Every Canadian province along the U.S. border is electrically interconnected with a neighbouring U.S. state or states, with many provinces boasting multiple international connections. The result of the integrated Canada-U.S. electric grid is a flexible, reliable and secure grid on both sides of the border.
Maintaining grid infrastructure is expensive. In a 2015 report on grid modernization, the U.S. Department of Energy cites a study claiming that it could cost utility companies up to US$2 trillion by 2030 just to maintain current levels of service reliability.
It can be disconnected from a large (macro) grid network easily, if required.
Such systems can increase reliability and drive down carbon emissions when renewable energy is used.
When combined with smart meters that reconcile inflows and outflows of electricity, microgrids provide real-time energy data. When a microgrid goes down, it only affects the local region and not an entire state or province.
Because of their scalability and flexibility, microgrids may be less expensive to build when compared with energy mega projects and their associated transmission and distribution infrastructure. But for this shift to succeed, interconnection standards need to be developed to optimize a two-way flow of electricity.
Microgrids have the added benefit of being able to use a large percentage of existing wiring within communities to contain costs.
Additionally, they may fit better with the wants and needs of communities, generate local employment opportunities, lower consumption of electricity and take advantage of regional energy sources.
Market mechanisms including peer-to-peer energy trading based on blockchain technologies like Bitcoin can be used within microgrids to track transactions and to increase market penetration.
This has been demonstrated in Australia where owners of household solar arrays were able to buy and sell energy at an agreed upon price using real-time data.
When combined with a strategy to increase the adoption of electric vehicles, microgrids can take advantage of vehicle-to-grid technology by using energy stored in batteries of vehicles to reduce peak demand.
By co-founding a solar non-proft called GabEnergy I was able to move the community in that direction somewhat. But provincial legislation granting the utility company exclusive rights in the region killed anything more ambitious.
Although microgrids have a lot of potential, they still face some challenges before they achieve wide-scale support.
Energy storage remains expensive. The cost of lithium ion batteries has dropped to about US$175 per kilowatt hour (kWh) of storage in 2019 from US$1,200 per kWh in 2010. But many industry experts say the cost must fall below US$100 per kWh to be competitive.
There are also several financial challenges, given the absence of a long track record. So far, investors have been reluctant to support microgrids, but this may be shifting.
Schneider Electric is now partnering with investors to focus on microgrids to offer a hedge to companies who want longer term security with respect to the price they pay for electricity.
Legislation challenges also represent a barrier, and new regulatory frameworks and standardization are essential. Work to improve electrical codes for interconnecting with other grids will ensure safe operation of microgrids.
In short, climate change represents a significant threat to electrical utilities and the communities they serve. It also offers the greatest opportunity for innovation, community development and risk minimization.
Smart microgrids are a leap forward in how we generate, transmit and consume electricity. We have the potential to make grid failures like what happened in Texas a thing of the past.