IDEA’s Rob Thornton explains the road ahead for distributed energy in post-election Washington and why microgrid advocacy is crucial as the nation considers infrastructure investment.
The outcome of the recent election alone will do little to change the condition or age of the energy infrastructure serving our cities, communities and campuses. If anything, this election brings into even sharper focus the need for accelerated investment in renewal of infrastructure for more efficient and resilient energy for our nation’s industry, healthcare, airports, campuses, and central business districts in cities, large and small.
One important aspect of investing in modernizing urban energy and water systems is the catalytic potential for high wage employment growth among skilled labor — pipe fitters, electricians, contractors, engineers and constructors — the people who build and built America’s infrastructure.
Deploying more efficient distributed generation systems like district energy/CHP/microgrids across our national landscape will dramatically improve energy efficiency here at home, strengthen local economies and enhance energy security. As an added bonus, the environment will also benefit through reduction in regional emissions and conservation of fuel and water resources.
Heading into the election, both presidential candidates were espousing plans for infrastructure investment to spur much-needed job growth and support our economic future. President-elect Trump has frequently commented on the vast difference in quality between roads, bridges, and modern airports in foreign countries when compared to America’s cities. He has suggested a plan to support $1 trillion in capital investment for rebuilding infrastructure.
Case for microgrids
I contend that district energy microgrids would be a worthwhile sector to qualify for such program support as cities, communities and campuses rightly need more private/public partnerships to fund a 21st century energy grid, integrating power and thermal generation closer to the load centers.
But let’s be clear, microgrid advocacy is crucial. Unless those of us in the industry stand up and make the case, any program support or infrastructure funding will flow to the squeakier wheels. After all, the American Society of Civil Engineers in 2011 scored US energy infrastructure with a D+ and an investment gap in distribution systems alone approaching $730 million per year by 2040 and electricity service interruption costs of over $200 billion per year in constant 2010 dollars.
In Washington, DC circles, there remains ongoing discussion of an ‘Infrastructure Bank’ to leverage private and public capital for these long-life investments. Often, one of the key criteria is that the qualifying asset contain a revenue stream to provide capital replenishment or support to related community activities, such as schools or other municipal services. Certainly, microgrids can yield valuable revenue to stakeholders and when operated effectively, can support other economic multipliers by utilizing local energy resources and improving trade balances.
One of the challenges IDEA encountered in previous iterations of infrastructure bank program planning was the high project thresholds of between $100 million and $1 billion to rationalize the complicated capital funding schemes and at the DOE, high issue costs associated with debt security, processing and even cash deposit requirements for loan guarantees.
I don’t profess to have exact game plan in hand, but I believe the microgrid industry deserves consideration for inclusion in this effort. And frankly, it will fall to us to make our own case, describe our potential, estimate our needs and compete for resources. I think it is worth the effort.
MRC’s Baird Brown and IDEA’s Rob Thornton
Upcoming microgrid advocacy events in Washington, DC
IDEA and the MRC are planning two near-term events in early December to ‘get on the radar.’ First, is a Senate Briefing on Capitol Hill on Tuesday Dec. 6, 2016 in the Dirksen Senate Office Building to brief U.S. Senate and agency staff on the attributes and advantages of district energy/CHP/microgrids. Our intention is to familiarize an appropriate audience so that when infrastructure funding for energy is under consideration by the new administration as part of an economic or jobs bill, our sector can make a forceful case for inclusion.
As Wayne Gretzky once said, “You miss 100 percent of the shots you don’t take.” We feel that timing is critical to take our shot.
The following day, IDEA and MRC are hosting “Microgrids: Transforming the Grid” at the National Press Club on Wednesday, Dec 7. The full day program will feature panel discussions with key state public utility commissioners who are seeking guidance and industry input on regulatory planning for a more distributed energy future.
Other panels will include owner/operators of highly-sophisticated microgrids at numerous institutions as well as new systems currently in design and development for mission-critical applications, multi-use residential communities and dense urban clusters.
Leading industry technology providers, developers, integrators and consulting firms will also share insights and the MRC will host an interactive session for industry leaders to discuss policy and regulatory objectives for 2017 and beyond. More information is available at www.districtenergy.org or “Microgrids: Transforming the Grid”. A few exhibit spaces may still be available and registration is nearing capacity, so please act now if you would like to attend.
At IDEA/MRC, we believe that our technologies hold great promise for tomorrow’s cities and communities. We know that mayors want access to more resilient and sustainable energy resources, and they need industry support to make the case for prudent regulatory and policy reforms. We know that research institutions and healthcare, with mission-critical applications, absolutely demand more reliable, local energy supplies and our sector has proven highly effective for decades. We know how to build, own and operate the most efficient, resilient and economically competitive district energy/CHP microgrid assets.
As an industry, we need to work harder at sharing our stories and educating our leaders so that they can pull us along to a more efficient energy future. They want what we offer, they just don’t know it yet.
Rob Thornton is the CEO and president of the International District Energy Association (IDEA), which includes the Microgrid Resources Coalition.