A technical analysis by the National Renewable Energy Lab on the feasibility of accommodating 25% solar-energy penetration in the western states identifies changes needed in both operations and infrastructure. The list includes building new transmission lines and incorporating state-of-the-art wind and solar forecasts into grid operations.

Microgrid systems are starting to pop up and attract growing interest. In April, Black & Veatch commissioned a microgrid system at its headquarters in Overland Park, Kan. It uses natural gas, solar energy, geothermal and battery storage to power the Rodman Innovation Pavilion at the headquarters. It reduces the carbon footprint of the facility and gives B&V a showcase for a quickly growing field.

The biggest technical challenge microgrids present is integrating controls for multiple generation sources with a building's energy management system, says George Minter, B&V spokesman. He says the company developed a custom controls system for the pavilion that gives it the flexibility to experiment with it as a "living laboratory."

A New Relationship

The disruptive entrance of DER and microgrids into the electricity industry is changing the way power is managed, distributed and used, shifting to a decentralized model instead of a centralized one. That is opening a growing space between traditional utilities and their customers. A few firms are angling for toeholds in it. Rather than displace the traditional utility, they seek to provide tools that keep the utilities relevant while greatly increasing the resilience and reliability of the decentralized electrical systems.

Tesla Energy's May 1 commercial rollout of the Powerwall, a wall-mounted battery for residential customers to store up to 10 kWh of power, has attracted much attention, but Kenneth Munson, president and CEO of Sunverge Energy Inc., says the real story is much bigger. A battery hanging on a wall is not a solution, he says. "If it doesn't have a piece of software to command and control and integrate it with the grid, you don't have a solution," he notes.

Sunverge sells systems to integrate storage batteries with solar panels, electric vehicle charging stations, programmable thermostats and other smart devices in the home "behind the meter." The system optimizes the loads and links the devices into a grid-interactive unit that is engaged in constant, bi-directional communication with the operator—presumably the utility. Users like integrated systems.

The system's potential is more fully realized when the command-and-control software is replicated in the cloud. While it is optimizing the load in the customer's location, the system enables connection in the cloud of numerous users' devices, turning the aggregation into a network of customers who may be on different circuits, different feeders or even in different geographic clusters, says Munson.

"Utilities now are able to deploy assets and engage with their customer in very different ways," Munson says. Every smart application in the house becomes a dispatchable asset on a very large network, like a node on the internet.

"Now the utility has the ability to engage and interact with the consumer in a more fluid, dynamic way—meaning that what was considered load five or 10 years ago is now a customer," he says. Utilities historically have managed blocks of load measured in megawatts on the grid. "Now you have 500 MW of load that can talk back," Munson says.