What’s up with microgrids?

A Q&A with Dr. Peter Lilienthal about distributed energy

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This stand-alone photovoltaic system creates a mini-grid wherever it goes and creates enough power to run a small home.
Jim Yost / NREL

Dr. Peter Lilienthal has been in the renewables business a long time. In 1979 he started selling wind turbines from “the first small wind turbine company — pretty minor job to be honest,” he says. Then he taught alternative energy and sold energy management systems a little bit, too. 

But the bulk of his career has been in distributed energy — microgrids, specifically. From 1990 to 2007, he was the senior economist with international programs at the National Renewable Energy Laboratory (NREL), where he developed the hybrid power optimization software HOMER, which has been used by over 250,000 energy practitioners in 193 countries. In 2009, HOMER was licensed as a private company and in 2019 was acquired by the global safety science company UL, where Lilienthal now serves as the global microgrid lead. This year, he was selected to be on the City of Boulder – Xcel  Energy Partnership’s 18-member community advisory panel.

We recently caught up with Lilienthal to talk about his work, the potential for microgrids in Colorado, and what he plans to share at the Aug. 12 Empower Hour presented by Empower Our Future, a Boulder-based coalition of organizations and individuals in support of local clean power. 

This interview has been edited for length and clarity. 

Boulder Weekly (BW): How have you seen the field of distributed energy and microgrids change over time? 

Dr. Peter Lilienthal (PL): We didn’t call them microgrids in the early ’90s. We had a Village Power Program at NREL and the focus there was: Where’s renewable energy going to be cost-effective first? Because in the early ’90s, it really wasn’t cost-effective yet. And I decided it was places that burn diesel, so islands and remote areas. At that time there were 2 billion people — there’s still a billion people — without any energy access at all. And so microgrids are the best way for them to get power. 

Over the years there’s been a lot of experience with these remote microgrids that stand alone all the time. But now solar and storage have gotten cheap enough that the same concept — with some changes but similar in many ways — is cost effective here in the U.S. And so this concept of microgrids, which used to be real niche, now has a lot of experience and expertise that has been built up that is relevant here for anyone that wants real high reliability or their own power to be predominantly renewable, and there’s a real growing interest in grid-connected microgrids.

BW: How do you define microgrids? 

PL: Some people define it by limited geographic area. Some people define it by a single power station, but that can get ambiguous. So I think simpler is better. I have a really simple definition, which is any system that is capable of standing on its own. So the remote microgrids stand on their own all the time. And a grid-connected microgrid is capable of standing on its own, but typically wouldn’t — only when the grid has an outage or emergency or something. The only problem with my definition is there’s no logical upper bound on what that means. We work on a lot of islands in the Caribbean and Pacific and Alaska; if they’re big enough to have conventional generation — like Puerto Rico, the island itself has a pretty large power system — that’s getting too large for me to call the whole island of Puerto Rico a microgrid. But most of the other Caribbean islands are microgrids — they are only tens of megawatts maybe.

BW:  In Colorado, several laws were passed this year that could make way for more grid-connected microgrids in the future — HB21-1269: Public Utilities Commission Study of Community Choice Energy, for example. Are you hopeful that will change the picture in the state? 

PL: I’m wildly optimistic but I’m just starting to get involved in local policy issues. Worldwide and nationwide, there is a growing interest in this. California was already a trendsetter in terms of microgrids, which really need to have storage, and they were pushing storage before anyone else. But these public safety power shutoffs — where the utilities are cutting off power to whole communities for days at a time just to prevent wildfires — means everyone in these communities needs a microgrid, need to be able to stand on their own. So there’s a lot of interest now in California and there are pockets of other places: Green Mountain Power in Vermont is doing innovative stuff. Austin Energy is doing innovative stuff. It’s not always exactly a microgrid, but you know, it’s moving in that direction.

BW: I was going to ask, with these power shutoffs, precipitated by extreme weather events caused in large part by climate change, how do microgrids ensure resiliency? 

PL: The only way to really have high reliability is to have the source of power where you are going to use it. The vast majority of outages are caused by problems in the distribution or transmission and distribution system; if the problem is winds or fires or tornadoes or ice storms or whatever are taking down the lines, you need the power on your side of the line. So the extreme weather events absolutely are creating a huge incentive or are making people recognize the value of distributed energy. But distributed energy coupled with the right controls and storage and maybe a backup generator means that you can stand on your own. Just rooftop solar by itself doesn’t do it, because if the grid goes down the rooftop solar by itself can’t continue to produce power. You need the right kind of switch gear controls and some storage. And one of the things that our software really focuses on is storage, because storage still is expensive, but it’s come down dramatically and it’s really cost effective if you design it correctly, you don’t overbuild, and you know exactly what you’re going to use it for. 

Dr. Peter Lilienthal

BW: Your HOMER software helps with design optimization, correct?  How does it help foster these microgrid situations?

PL: It’s a combination of a simulation software that simulates how the system will operate embedded within an optimization framework. So it will simulate one system and then it’ll say, well, what if we added more storage, or what if we added more solar, or what if we changed the control strategy? And it will simulate hundreds of different systems and calculate all the costs associated with that system — the capital costs, the operating costs, the replacement costs, fuel costs, if any, and get you the total cost of ownership and rank them so you can see, OK this is the least-cost system. 

BW: You specialize not just in microgrids but microgrid economics — what are the financial benefits of using distributed generation? 

PL: The economics depends more on the utility tariffs than on the solar resource. You’ll get about twice as much out of a solar panel in Phoenix as you’d get in Seattle. That’s not insignificant, but the difference in electricity costs from one part of the country and others, it’s a lot more than a factor of two. So the electricity rate matters. The rate structure matters. And then the load shape, like residents typically have a very peaky demand where they’ll use a lot of power at night when everybody comes home and turns on everything, whereas industry usually has a flatter demand. Some places have very seasonal demands… And so that’s why you need software. It’s too complicated; rules of thumb don’t work that well. It can be very cost-effective, but it’s site-specific.

BW: You were recently selected to be on the City of Boulder – Xcel  Energy Partnership’s 18-member community advisory panel. What do you hope to bring to the panel? 

PL: I’ve got decades of experience with distributed renewables and all these different applications and sure some of them are in a very different context than Boulder, but there’s valuable information there. On distributed energy and microgrids and how the industry has evolved and where it’s at now, where we expected to be in the near future. I don’t look out 20 years that much at all, but I do look out a couple of years and say, this technology is improving, etc. — I just want to see stuff get done. I want to see stuff happen. I want to see acceleration of movement now.

So, it’s my expertise on distributed energy — and microgrids are a subset or a form of distributed energy — that’s what I bring. 

I don’t know what to expect, frankly. But we’ll see. I’m very hopeful that Boulder can continue to be sort of a cutting-edge leader in this area. We certainly have the knowledge and the interest— the support from the city government and the people. I don’t really know what Xcel’s plans are, so we’ll find out. But I’m very hopeful.  

ON THE BILL: Dr. Peter Lilienthal: What’s Up with Microgrids. 6 p.m. Thursday, Aug. 12. Virtual. Registration required: empowerourfuture.org/events