My friend Reggie believes the world is coming to an end.

No, he didn’t fall for that Mayan calendar nonsense. He’s a rational person, but he watches the news with an eye out for the endgame; he expects a global economic collapse, caused by the mounting global debt load. That is, if the world isn’t first devastated by nuclear war, sparked by religious jihad. And failing that, there’s a whole menu of natural disasters waiting to strike the planet, including wayward comets, solar flares, or a magnetic polar shift.

The point is, he expects the end of civilization as we know it, and every day the news seems to confirm his suspicions. From Superstorm Sandy to the fiscal cliff, the world seems to be falling apart—and Reggie is preparing for the end. He’s assembled a bug-out kit, with food, water, and survival gear for several days. He owns multiple firearms and stocks plenty of ammo. His plan is to get his family out of the suburbs as quickly as possible, so they can reach their cabin in Minnesota’s north woods. There, he reasons, they can hunker down and stay safe until the worst is over. Or they can just build a new life, far away from the zombie hordes.

Recently Reggie was telling me about his escape plan, and I noticed some weaknesses. For instance, if his vehicle’s tank isn’t full of gasoline, he’ll be in trouble. Gas pumps need electricity, and if civilization is ending, then the utility grid won’t continue magically functioning on its own. But even assuming he has plenty of fuel in the tank, once he arrives at his destination he’ll find there’s no electricity there either. He’d better hope Armageddon doesn’t happen before springtime, because although his cabin’s heater runs on propane (from a tank we assume will be topped up when he arrives), the thermostat, igniter, and fan all require a steady stream of electrons. He has a portable generator, but how long will it run on the fuel he’s managed to bring with him?

After this conversation, Reggie seemed annoyed with me. I’d shed the harsh light of reality onto his post-apocalyptic fantasy, and he didn’t like what it revealed. But he cheered up when I told him the utility industry actually is working on a solution to his problem: the microgrid.

With microgrids in place, Reggie might not need to worry so much about a global collapse. Even if the overall network goes down, intelligent microgrids will keep power going in some locations—perhaps locations that include gas stations. And in a world where distributed generation is cheap enough to make microgrids economically viable, Reggie probably will have a PV module on the roof of his cabin, and a battery back-up system. Further, oil and gas operations and pipeline pressure stations will run on CHP units and fuel cells. So at least in principle, the fuel could resume flowing soon and the economy could start back up after a collapse—assuming enough workers are around to restart the machines.

The question is, will we build microgrids? And if so, why? (Assuming we’re not actually planning for the apocalypse.)

Small is Beautiful

In this issue of Fortnightly, two articles address the prospect of microgrids. In “March of the Microgrids,” SAIC’s Stephen Schneider argues that multiple factors will make microgrids increasingly attractive for a range of customers—starting with remote military bases and gas field operations, and residential neighborhoods soon thereafter. And in my story, “Smart Grid at a Crossroads,” experts from DNV KEMA and Itron say that microgrids already make sense today, and will make more sense as the broader grid becomes more intelligent.

In each case, the key drivers are technology, reliability, and market competition. Over time, distributed generation and storage will get cheaper, eroding the scale advantages of large generation and transmission systems. Smaller local grids will be less vulnerable to system-wide blackouts, whether caused by the apocalypse or just another massive storm. Some locations are already pushing the idea on this basis; the Connecticut Department of Energy & Environmental Protection accelerated a $15 million program to finance microgrid pilot projects—which seem to be most attractive to communities that suffered long outages in the wakes of Hurricane Irene and the October snowstorm of 2011, and more recently Superstorm Sandy. And interconnected microgrids should provide stability to the overall system, as they can be islanded to reduce local constraints, or conversely the utility can tap their resources—including generation, storage, and demand response—to help manage various contingencies.

That leaves the third factor, market competition—increasingly a wild card in the U.S. utility business. Last summer in this space I discussed increasing concern among some utilities about the threat of cheap PV panels, and the likelihood that at some point they would reach cost parity with retail power supplies. (See “Rooftop Tsunami,” July 2012.) Since then, utilities in multiple states—including Colorado, Georgia, and Reggie’s home state of Minnesota—have worked to reduce or diminish incentives for third-party PV development.

As those and other examples show, utilities jealously guard their traditional rate-based franchises. However, the microgrid trend seems to be advancing gradually, perhaps giving utilities time to get used to the idea. Projects like those in Connecticut might even help utilities figure out how to make money from microgrids, rather than lose money to them.

We’ll be watching closely. And so will Reggie.

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