What’s in a Name? Survey Respondents Agree that Definitions Matter for Energy Terms

By Kate Robb and Peter Asmus
Jan. 19, 2023

Last summer and fall, the Alaska Center for Energy and Power (ACEP) conducted surveys to gain an understanding of how people define terminology in the energy sector worldwide, focusing on microgrids, the dominant infrastructure platform in Alaska. Two groups were surveyed. The first group of 32 respondents included attendees of the Isolated Power Systems conference in Cordova this past July. The second group of 115 respondents were enrolled in ACEP’s online Foundations of Microgrids this past fall. The respondents had not only diverse backgrounds, with the majority coming from the energy industry, but spanned the globe, as is shown in the map below (though the most respondents (47) did reside in Alaska.

When asked if and why definitions matter when it comes to designating specific energy development projects according to terms such as “microgrids,” “minigrids,” or “isolated power systems,” the majority of total respondents (79%) indicated that yes, definitions do matter. Interestingly, 56% of respondents (69% of those who responded ‘yes’) indicated that definitions matter because it enables solution providers, researchers and end-use customers to speak with a common language, and 25% (31% of those who responded ‘yes’) because legal and public policy implications may exist with such project designations. As an example of the latter, the term “minigrid” is referenced in country level regulations in some countries in Africa.

Regardless of whether one uses the term microgrid or minigrid (or isolated power systems), these smaller grids differ from the larger traditional hub and spoke transmission dominated grids in a few important ways. Their much smaller scale translates into far fewer distribution and transmission line losses, since electricity is generated closer to customer loads. This, in turn, lessens demand on the utility transmission infrastructure, thereby increasing capacity to serve other customer loads. Furthermore, new controls, more efficient heat capture, energy storage (batteries, flywheels and pumped hydro), and a variety of information technology (IT) innovations differentiate energy service provision within many microgrids in ways that are tailored to fit the unique customer needs. They can also take advantage of locally available resources. In Alaska, that means resources ranging from hydro to geothermal, tidal to wind and solar. Instead of using a utility smart grid program to raise the level of homogenous power quality for all captive customers in a monopoly grid-connected setting most common in the continental U.S., microgrids offer the flexibility to provide heterogeneous power products and services to meet specific end-user needs and requirements.

Participants in the survey were also asked to select terms they felt confident defining in a way that is consistent with others in the industry. Overall, the first group was more confident in defining the terms with only 3% of people selecting ‘none of the above’ versus the 25% of people who selected that option in the second group. This makes sense since the attendees of the Cordova conference were more seasoned energy industry practitioners whereas those in the second group were often younger students, some of which were still in high school.

The top four terms those in the first group felt comfortable defining were isolated power systems (84%), distributed generation (78%), distributed energy resources (66%), and microgrids (63%). For the second group, the top four terms were distributed energy resources (45%), distributed generation (41%), isolated power systems (35%), and regional grids (26%). The last of these latter four is particularly interesting, since regional grids are rare globally, but concentrated in the circumpolar Arctic in countries including Canada and Russia.

One survey question included a list of potential definitions for the term microgrid itself. The federal Department of Energy definition is as follows:

A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island mode ^[1].

This term “microgrid” was the primary focus of this survey and related research, given the prominence of microgrids not only in Alaska but in providing a variety of energy services in emerging economies looking to learn from the Alaska experience. Participants were asked to select the definition that best matched their understanding of what a microgrid is.

The total responses from both survey groups in order of popularity were:

• An aggregation of DERs that are capable of operating in islanded mode, either temporarily or permanently (29%)
• An aggregation of multiple distributed energy resources (including multiple loads) that can act as a single controllable entity and which can disconnect and connect to a utility low-voltage or medium voltage distribution network (29%)
• An aggregation of distributed energy resources (DER) including distributed generation, energy storage and loads (19%)
• An aggregation of DER that is connected to a utility grid, but which can disconnect and operate in so-called “island mode” (14%)
• Is a localized static set of DER assets with clear boundaries (9%)
• An aggregation that has an established economic link to any surrounding electricity grid (i.e. can import or export energy services) (1%)

Overall, there was no one definition selected by an overwhelming majority of respondents. In looking at the groups separately, we can see some differences in preferred definitions.

The top two most popular choices for the first group were:

• An aggregation of DERs that are capable of operating in islanded mode, either temporarily or permanently (41%)
• An aggregation of distributed energy resources (DER) including distributed generation, energy storage and loads (25%)

For the second group of microgrid course participants, the top two choices were:

• An aggregation of multiple distributed energy resources (including multiple loads) that can act as a single controllable entity and which can disconnect and connect to a utility low-voltage distribution network (34%)
• An aggregation of DERs that are capable of operating island mode, either temporarily or permanently (25%)

Respondents were asked to select from the long list of terms referenced earlier that they prefer to use. In order of popularity, the most popular term selected by all respondents were, not surprisingly, the term “microgrid,” followed by the more generic term “distributed energy resources.”

The DOE definition of a microgrid referenced above excludes systems that were commonly referred to as microgrids decades ago: independent systems which operated independent from any traditional utility grid. Sometimes referred to as “remote microgrids” or “mini-grids,” one could make the argument that these systems are “true” microgrids since they must operate in island mode 24/7. To recognize these microgrid pioneers, DOE reportedly amended its definition to include them, though documentation validating this change is lacking.

Perhaps the reason why the original DOE definition focused on grid-tied microgrids was that the definition was developed during the hype cycle regarding the smart grid and the interest among policymakers in the U.S. to distinguish microgrids from the broader concept of smart grid. To some, a microgrid being created within the boundaries of a traditional utility grid infrastructure was the more radical concept. For incumbent utilities, these self-sustaining and potentially independent third-party DER configurations represented a major threat to the status quo.

Conclusion

For the end-use customer or solutions provider, providing a label for a specific solution is, in many cases, irrelevant. As long as the DER-based project serves the needs of the client, what label one attaches to the solution is no longer important. Yet one can also make a compelling argument that definitions do indeed matter, as survey respondents voiced. As the pool of DER portfolios grows globally, projected to surpass the electric capacity newly installed from large centralized power plants globally in the coming decade, and different concepts encompassing common or dissimilar approaches to aggregation and optimization multiply, having a common language to describe solutions will become increasingly important.

Definitions are particularly important when developing supportive policy or comparing DER-based project developments across multiple markets or jurisdictions. But motivations in establishing a clear definition varies broadly.

The truth is that microgrids – especially remote systems operating in Alaska and the circumpolar Arctic – have been in existence for decades. One could argue, as does HOMER Energy ^[2], that the smart grid began in remote microgrids out of necessity. The DOE definition of a microgrid was created with the emergence of a smart grid during the 2008 timeframe when ARRA funds were being distributed to advanced metering infrastructure (AMI) deployments as part of the federal government’s strategy to push economic development through new energy technology. Hence, the microgrid definition was created to distinguish smart grid from microgrid – or so it seems upon reflection.

Since the largest and most mature microgrid segment are remote microgrids, perhaps it is time to also define what an advanced remote microgrid looks like today. Since they provide the most fundamental energy services for the most difficult projects to develop due to client base (often the Bottom of the Pyramid end-use customers lacking fiscal resources), in the harshest environments (extreme cold or extreme heat) in a commercial space often ignored by well-capitalized private sector vendors, the demands placed on successful microgrid implementation in this market segment are immense.

How should we define an advanced remote microgrid such as those operating in Cordova, Kotzebue or Kodiak Island in Alaska? We at ACEP welcome your ideas. Please submit to: phasmus@alaska.edu.

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[1] The Role of Microgrids in Helping to Advance the Nation’s Energy System

[2] Remote Microgrid Business Models, by Peter Lilienthal (PDF)