Power outages cost the US economy between $104-$164 billion each year, according to the Energy Policy Research Institute. Even brief outages can damage equipment or idle labor, wasting critical resources and creating ripple effects for downstream firms. The far-reaching impact of extended outages have been demonstrated in weather events like Hurricanes Katrina and Sandy, and in a string of blackouts over the last 15 years resulting from equipment failure.
The US energy system is facing mounting threats: Increased frequency and severity of extreme weather events; water scarcity crises, which will continue to confound traditional power generation (currently responsible for nearly half of all water use in the United States); and aging infrastructure that’s increasingly vulnerable to equipment breakdown as well as sabotage. These threats are compounded by the complexity and interconnectedness of our energy infrastructure, which can turn a small-scale failure into a widespread problem.
Understandably, communities and businesses are increasingly seeking new localized strategies to prepare for shocks to their energy supply. Hitachi has embraced this approach: Motivated by the outsized impact of power disruptions on individual facilities and communities, Hitachi’s Social Innovation Business is developing local solutions. Within this local frame, a new energy paradigm has emerged that can allow customers to take control of their energy supply. Known as a microgrid, this technology takes all the elements of the formerly far-flung electrical grid and brings them together on-site, in close proximity to end-users.
In contrast to the traditional electrical grid, in which energy may be transmitted over hundreds of miles from power plant to final user, a microgrid allows an institution to generate power locally. Instead of a large, centralized power plant, microgrids are built around smaller resources, like solar, wind, and small-scale natural gas turbines.
Perhaps the most important benefit microgrids offer is the ability to go into “island mode,” allowing an institution to disconnect from the regional grid during a power outage, and rely instead on on-site energy generation. Without a microgrid, even a building with solar panels on the roof will go dark when the regional grid goes down.
In Japan, Hitachi has become a leader in smart city design and development, especially in the use of microgrids to enhance the energy resilience of local communities and institutions. Now the company is applying best practices developed in Japan to protecting vulnerable institutions and communities in North America.
Hitachi’s microgrid offering is designed to bring customers through every stage of the development lifecycle, from feasibility study to final implementation. Currently, the company is partnering with ten New York State communities to take part in the “New York Prize” competition, an initiative led by the Governor’s office as a way to promote the development of microgrids in communities across the state. Hitachi is engaged with each of its partner communities to identify critical facilities, plan the development of on-site energy generation, and design a microgrid that will allow these facilities to stay powered even when the regional grid goes down. In each case, the company is ensuring that the microgrid will allow the community to accomplish three goals:
- Improve energy security through on-site generation and the ability to go into “island mode”
- Improve environmental performance through energy efficiency measures and the development of clean energy sources
- Reduce energy costs through the development of efficient generation sources like solar and combined-heat-and-power plants, as well as the ability to control the system to manage loads and dynamically employ the least expensive energy source
In microgrids, university administrators, business owners, and local mayors see an opportunity to mitigate the risks associated with an insecure electrical grid and unpredictable energy costs while simultaneously achieving their environmental goals. As other states and countries look to replicate the success of early adopters like New York, there may be increasing policy support for this technology.
This article was produced by Hitachi and not by the Quartz editorial staff.