New York Offering $40 Million to Encourage Microgrids

A statewide competition aims to encourage the development of small, independent power grids that would help key neighborhoods keep the lights on during a severe storm.

by David Robinson, The Buffalo News / February 13, 2015
(TNS) -- New York is putting up $40 million for a statewide competition to encourage the development of small, independent power grids that would help key neighborhoods keep the lights on during a severe storm.

The idea behind the development of “microgrids” is that the local energy networks would be able to break free from the statewide power grid during severe weather or emergencies, and be able to help supply power to the grid during times of peak demand.

The result, state officials hope, will be a stronger statewide power grid that is more reliable, increases the use of renewable energy sources and is more energy-efficient because the electricity the microgrids generate largely would be used by nearby consumers.

The state this week launched its NY Prize competition that seeks proposals to create microgrids across the state, with as much as $7 million in funding available to the handful of projects that win top prizes.

The microgrids are small power systems built around key community assets, such as hospitals, schools or water plants, that would rely on local electrical generation, including wind and solar power, during a broader power outage. The microgrids also would serve other nearby power consumers.

“What we want to see is at least two customers, with one of those customers being a vital community asset, like a hospital or a school,” said Micah Kotch, the director of the NY Prize competition and a senior adviser for the New York State Energy Research and Development Authority.

Under the competition, about 25 proposals will be selected to receive $50,000 to $100,000 to conduct feasibility studies. That list of potential projects then would be narrowed to eight to 10 proposals that would receive $500,000 to $1 million for design work. At least five of the projects would receive construction funding of up to $7 million.

“It needs to benefit the customer. It needs to benefit the third party who is bringing the project to life. It needs to benefit the utility. And obviously, it needs to be green,” Kotch said during a session to outline the competition Thursday at the University at Buffalo.

Paul J. Tyno, director of energy initiatives at the Buffalo Niagara Medical Campus, said the group has worked with National Grid to develop an energy plan for the campus and has looked at the potential of small power generation networks that could serve the medical facilities, as well as the surrounding neighborhood. Tyno said the Medical Campus also has looked at ways to increase the energy efficiency of buildings through technology, as well as storing power in batteries and green energy generation.

“We’re looking for projects that are ‘first of a kind,’ rather than ‘one of a kind,’” Kotch said, noting that they hope good ideas can be replicated across the state. “This is a new concept. Our approach has been to set some parameters and let the market come up with a solution.”

The state’s electricity system is built so it has enough capacity to still supply consumers with the power they need during the hot summer days when power demand is at its highest. But maintaining a system of that size is expensive, when on an average day with a normal demand for electricity, just 54 percent of the power grid’s capacity is in use. Increasing the use of the power grid to 59 percent of its capacity would save consumers in New York about $2 billion a year, said Greg Hale, Gov. Andrew M. Cuomo’s senior energy adviser.

©2015 The Buffalo News (Buffalo, N.Y.). Distributed by Tribune Content Agency.