Legislation introduced to incentivize microgrids to provide backup power during emergencies

July 16, 2021
In The News

Legislation was introduced this week by Rep. Jimmy Panetta, D-Carmel Valley, that would incentivize the expansion and deployment of microgrids, which can mitigate the impacts of outages.

 

“Many California communities, including those on the Central Coast, are frequently experiencing power failures and shutoffs due to wildfires, public safety power shutdowns, and other emergencies driven by extreme weather events,” said Panetta in a press release. “My MICROGRID Act (Making Imperiled Communities Resistant to Outages with Generation that is Resilient, Islandable, and Distributed) would provide accessible tax credits for local governments to build and deploy microgrids, offering a cleaner energy alternative to fossil fuel generators that are independent from our energy grid.”

 

In the event of widespread power outages or other emergencies, microgrids can provide backup power independent from the larger energy grid.

 

“Expanding and deploying microgrids can harness clean energy sources,” Panetta said, “keep our homes and critical infrastructure connected when the larger grid fails, and lead to reliable and consistent electricity for our homes and safety for our communities.”

 

California moves to adopt historic $6 billion broadband plan

 

The bill creates a 30% tax credit for a qualifying microgrid property through 2025, phasing down to 10% by 2028 and sunsetting in 2029 to provide an incentive for the expansion and deployment of microgrids at the local level. The credit can be taken by governments and nonprofits as a direct payment, helping communities take advantage of the credit.

 

The U.S. Department of Energy defines a microgrid as a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that act 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.

 

Components of a microgrid that are eligible for the credit are:

 

Microgrid controllers, the equipment necessary to monitor and control the energy resources and loads on the microgrid to maintain acceptable frequency, voltage or economic dispatch, including any software and networking hardware necessary to the operation of the equipment.

Switchgear, the equipment necessary to deliver electric power from energy resources on a microgrid to loads on the microgrid, including breakers, fuses, wires, switchgear cabinets and bussing, paralleling switchgear, transformers, metering equipment, and wired and wireless communications equipment necessary to the microgrid operation.

 

Critical spare parts

 

As an example, the city of Gonzales is currently building out a 35-megawatt project to connect agricultural facilities.

 

The Gonzales Electric Authority has an agreement with Concentric Power for a microgrid that will initially have the capacity to provide locally generated, resilient and sustainable power to the city’s Agricultural Industrial Businesses Park which houses processing facilities for some of the country’s largest fresh vegetable and wine producers.

 

Concentric Power Inc. is a microgrid developer with experience in agricultural, industrial and community sectors with offices in Salinas and Campbell.

 

The $70 million Gonzales microgrid project will be funded primarily by Concentric Power, with supplemental funding from Gonzales Electric Authority and the Gonzales Municipal Electric Utility toward ownership of the distribution infrastructure. The distribution assets will be transferred to Gonzales Municipal Electric Utility, according to city documents.

 

Gonzales Mayor Jose Rios said the city’s 9,000 residents are dependent on agriculture and his city has a history of being innovative to ensure city services and employment opportunities for its citizens.

 

“Now to ensure and expand our economy and employment opportunities further, and to provide a steady power source for our industrial community, we are investing in our own energy future by developing a multi-customer microgrid,” said Rios in a press release. “Our goal is to be able to supply reliable, nonstop, high-quality electricity to our highly valued ag processors who are the base of our employment, and therefore the livelihood for families who live and work in our small town.”

 

Rios believes the city’s microgrid project could serve as a model for other small cities in the state.

 

Taylor Farms’ processing facility in Gonzales teamed up with Concentric Power a few years ago to integrate its existing wind and solar components that functioned independently of each other. A Concentric microgrid controller was installed to integrate and optimize existing distributed energy resources along with installing a 2-megawatt cogeneration unit which would add firm power to form a microgrid system that could effectively take the facility off-grid.

 

Panetta’s office explained that the important part is that it can “island” from the grid in an emergency, providing cleaner backup power than standard diesel-generated backup power.

 

“There is no limitation on the types of facilities that could take advantage of this credit – it could include critical infrastructure like water treatment, data centers, municipal buildings, health care facilities, and emergency response facilities,” said Sarah Cronin, Rep. Panetta press secretary. “Allowing the credit to be directly paid to municipalities, special districts, and nonprofits ensures that communities can take advantage even if they don’t have tax liability.”