Ask New Yorkers what they remember about Hurricane Sandy, and they’ll say the blackout. Floods cut power to most of Lower Manhattan, plunging America’s financial and cultural epicenter into total darkness. Or rather, near-total darkness.

New York University continued to buzz and glow throughout the night. The reason? NYU runs on a microgrid, a semi-independent energy system able to generate and store its own power. When the storm hit, NYU kept humming along. Cut off from a central utility, it continued to produce its own electricity.

“If you take a look at the blackouts that were in the New Jersey, New York, Connecticut realm of Superstorm Sandy, the only places that were up and operating were those places that had a microgrid,” said Steve Pullins, Vice President at Hitachi Microgrid Solutions.

In an effort to build more resilient power systems and provide more low-carbon energy, theNew York State Energy Research and Development Authority is awarding $40 million for the design and construction of microgrids across the state. Microgrids can help communities keep the lights on during the next Sandy, all while providing cheaper and cleaner power than the local utility.

How do microgrids work? Think of a microgrid as an energy island. It connects homes and businesses with local power generation and battery storage. It can be as small as a strip mall or as large as a Division I university. It acts as single entity able to connect and disconnect from the central grid

A microgrid is made up of several interlocking parts.

  • Renewable energy. Rooftop solar panels and small-scale wind turbines provide power with no fuel cost.
  • Combined heat and power. A combined heat and power plant houses natural gas-fired turbines that generate electricity and, as a byproduct, heat that can be used to warm water.
  • Energy storage. Home batteries store surplus power generated onsite. Electric cars provide additional storage when plugged in.
  • Point of common coupling. This is where the microgrid connects to the central grid. Think of it as a faucet that can be turned off and on, allowing electrons to pour in from a centralized power utility.
  • Microgrid controls. This is the brain of the microgrid. It manages the flow of electricity throughout the system. The better the software, the more efficiently the microgrid will operate.

In the morning, wind and solar ramp up as the sun breaks and winds start to blow. By midday, power from renewables surpasses demand. Home batteries and electric cars soak up the surplus energy.

As the sun falls and wind dies down in the late afternoon, batteries discharge stored electricity to meet energy needs. All the while, the combined heat and power plant and the central grid provide a baseline level of energy.

Ideally, consumers use energy-efficient appliances — LED light bulbs, power-thrifty dishwashers, etc. — that curb demand and keep the whole system running smoothly.

The result looks something like this.

Image for post
Source: Rocky Mountain Institute

Microgrids provide cheaper, cleaner energy. Microgrids can provide cleaner energy than the central grid. Rather than rely on a coal-fired power plant 100 miles away, users draw energy from solar panels on their roof and batteries in their basement.

Microgrids can also save consumers money. Wind and solar incur no fuel costs. A combined heat and power plant relies on natural gas, but it runs more efficiently and cheaply than a utility-scale gas-fired power plant, providing more energy — in the form of electricity and heat — per liter of gas burned.

So, why not disconnect from the central grid entirely? It is easier and more cost-effective to manage a microgrid when it is linked to an external source of power.

Image for post
Source: Hitachi

“If we’re producing about 80 to 86 percent of the required load from the customer, and we’re doing that with onsite resources, that’s the most economic point of operation,” said Pullins. “We’re a net user from the grid, so therefore the interconnection agreements that you do with utilities are simpler… And it also gives you a little bit of buffer, using the grid basically as a battery.”

Granted, under this arrangement, utilities have every reason to oppose microgrids. Decentralized power generation threatens their core business — producing and selling electricity. As part of its push for clean energy, New York reworking incentives to get utilities to support microgrids.

There are about to be a lot more microgrids in New York.

New York state is reforming its energy system so that utilities have a stake in renewable power. The New York Public Service Commission just approved a plan that incentivizes utilities to work with developers to set up microgrids. Under the new structure, utilities stand to earn money by the making systems more efficient and resilient. Speaking at a conferencein Manhattan last month, New York Energy Czar Richard Kauffman said, “The good news is that there are going to be a lot more microgrids.”

The shift is already underway. Hudson Yards, a behemoth real state development on the west side of Manhattan, officially opened last week. The neighborhood is powered an onsite microgrid. Its core components live 40 feet above sea level, providing reliable power out of reach of from potential floods. The developer lists the microgrid among the neighborhood’s many perks.

Is that what the future of power generation looks like? Maybe. According to Kauffman, “The current system is not only energy inefficient; it is financially inefficient. If we can do things better, we have the opportunity to add many more microgrids.”

Jeremy Deaton writes for Nexus Media, a syndicated news service covering climate, energy, policy, art and culture. You can follow him @deaton_jeremy.