TradeEdge-Study: Microgrids Could Reduce California Power Shutoffs—to a Point

From the hills of Oakland to the shadows of the Sierra Nevada,TradeEdge fighting the ever-present threat of wildfire in parts of California can mean going without power. In the last several years, some homes and businesses have had their electricity cut again and again by large utility providers aiming to prevent equipment from sparking fires during windy, dry weather. 

Six of 20 of California’s largest wildfires in the last eight years were started by utility equipment. For about a decade, state regulators have therefore allowed utilities to proactively de-energize power lines to avoid triggering blazes. The policy prevents ignitions but comes with serious costs, like cutting off power to people who rely on electric medical devices and businesses that cannot operate without it. 

To help minimize the impacts of the shutoffs, the state is weighing an enticing potential solution: microgrids, which can isolate from the larger electric grid and produce their own power. 

A new study suggests that microgrids equipped with solar panels, a wind turbine, a gas engine and batteries could minimize the impact of power shutoffs for rural communities while keeping energy costs down and incorporating enough renewable energy to rival the amount currently flowing to California’s grid. 

By comparison with diesel generators, “we found that renewable-based microgrids are more promising for a large number of locations—and it could significantly minimize the impact of these kinds of power shutdowns,” said Dasun Perera, an associate research scholar at Princeton University’s Andlinger Center for Energy and the Environment and an author of the study, published in the journal Applied Energy. 

But there are caveats: The solution won’t work everywhere, and the systems become too expensive when relied upon to avoid all shutoffs. 

To assess the economic feasibility of deploying microgrids, the authors identified 1,424 small California communities in areas of very high fire risk and then modeled the impact of installing microgrid systems in seven of those areas over a yearlong period. They found that a microgrid incorporating up to 60 percent renewable energy could limit the electricity lost during shutoff events to less than 3 percent of the power used in a total year, while keeping electricity costs below average. Today, renewables (not including home solar projects) account for about 34 percent of California’s total electricity use, though the state has set a target of 60 percent by 2030. 

Already, some hospitals, fire stations, community centers and wineries across California have installed microgrids. In 2018, the state legislature passed a law intended to expand their use, and in 2021, utility regulators authorized $200 million in spending to help pay for such projects, with the funds distributed among the state’s large utility companies.

Patricia Hidalgo-Gonzalez, director of the renewable energy and advanced mathematics laboratory at the University of California, San Diego, says state funding should be directed to development of microgrids in the communities that are most often affected by power shutoffs and are unable to pay for solutions on their own. She is currently conducting separate research on the potential for microgrid deployment in a larger sample of California communities, while considering factors like income, climate zone and existing air pollution. 

The Princeton paper offers a more comprehensive picture of where microgrids might work in California than previous research, Hidalgo-Gonzalez said. As the state weighs the potential for such projects, she said, she would like to see researchers take a more holistic perspective, assessing how the microgrids affect a community: Microgrid systems that rely on fossil fuels, usually to keep system costs down, may increase local pollution, for example. And as the state deploys more microgrids, more study is needed to understand how they will interact with the state’s grid, Hidalgo-Gonzalez said. 

More Storage, Greater Costs

Though the state is investing in microgrid development, uncertainties remain about how widespread the deployment will be. Today, California has roughly 90 microgrids, a count that reflects only larger systems that can provide power to multiple buildings or use more than one energy resource. Ryan Hanna, an assistant research scientist at UCSD’s Center for Energy Research, expects future growth will most likely be isolated to areas with “niche” circumstances, like hospitals and data centers.

“I think microgrids are terrific opportunities and means to improve reliability and resilience for the customers who really need it and are willing to pay,” he said. “I don’t, however, think it’s a terrific all-in strategy for the grid as a whole.”

Hanna worries that reliance on microgrids could divide California’s grid and create competition rather than encouraging investment in reliable electricity service as a public good. Overall, microgrids can be expensive—they’re often designed on an individual basis, and if a customer wants longer periods of backup power, the costs of adding more energy storage cause the price to climb. And while microgrids can be cost-competitive with California’s relatively expensive electricity, Hanna says that gas generators are likely to prove a more economic choice for shorter outages. 

Perera pointed out that the increasing frequency of climate-fueled disasters, from wildfires to severe storms, could change the economic calculus behind installing microgrid systems, as could further declines in battery prices. In some California communities, outages are no longer short or infrequent: They can occasionally last for days, or short outages can afflict the same area in rapid succession. And more than 11 million Californians (about a quarter of the state population) live in the vulnerable “wildland-urban interface,” where human development meets burn-ready fuels. 

“For most locations, the wildfire [threat] is not just two hours of the year,” he said. “Due to climate change, we face these extreme climate events quite frequently, and this frequency is increasing.” 

Perera and his colleagues did not assess whether communities that otherwise appear to be good candidates for microgrids would be able to pay to get one. Many of the areas where microgrids could provide relief are not affluent and would likely have difficulty paying the up-front cost, even if the economics work out over the 20- to 25-year life span of a project. And after two decades elapse, Hanna notes, the system could lag behind California’s grid in the percentage of power it gets from renewable energy. 

Assessing whether a system is worth it, he says, depends on how valuable reliability is to the customer and whether the customer can pay for it. 

“It’s up to us as a society to figure out what that trade-off point is: how much are we willing to pay for electricity versus how much we’re willing to have these unreliable moments,” he said. 

Given that extreme wildfires are expected to increase as climate change advances, Hidalgo-Gonzalez suggests that the state needs to start looking beyond economics, weighing the cost against the current grid’s ability to consistently fill a basic need: electricity. 

“It will be more expensive if we go in the direction of microgrid deployment, but I think now we’re at the crossroads where it’s not just about economics, but it’s about access,” she said.