In the wake of Superstorm Sandy, when most of lower Manhattan was a sea of darkness, New York University's Washington Square campus shone like a beacon in the night.

"The entire neighborhood was dark -- everything. And then there was us," said John Bradley, NYU's assistant vice president of sustainability, energy and technical services. "It really was a little surreal."

Swaths of Manhattan below 36th Street were powerless after Sandy hit, due to pre-emptive shutdowns and severe flooding that knocked out a power station in the East Village. But key buildings on NYU's campus stayed alight thanks to a self-sufficient microgrid system, designed to distribute electricity independently of Consolidated Edison Inc.'s main grid network.

A 13.4-megawatt combined heat and power (CHP) plant -- made up of two giant natural gas-fired turbines housed below Mercer Street -- powers the university's 26 electrically connected buildings. It also provides hot and cold water for up to 40 buildings by harnessing waste heat that would otherwise be released into the atmosphere. The efficient CHP facility produces 30 percent less greenhouse gas emissions than the oil-fired power plant it replaced.

In response to Superstorm Sandy, which made landfall last Oct. 30, leaders at all levels of the U.S. government have identified microgrids like the one at NYU as key components to improving energy resiliency on the East Coast. A recent federal report by the Hurricane Sandy Rebuilding Task Force cites microgrid systems as a means of mitigating the sprawling impacts of disasters fueled by climate change.

There's no official definition of a microgrid, but they're generally considered to be self-contained grid systems equipped with on-site power generation, like a CHP plant or a renewable resource like wind or solar. As isolated entities, microgrids can keep operating -- and, in NYU's case, keep students safe and power flowing to research projects -- even in the event of a large-scale power outage.

High-voltage enterprise
According to Navigant Research, North America will lead the microgrid market through 2020 with nearly 6 gigawatts of capacity, the equivalent of six large nuclear power plants.

A number of projects are already underway. Last month, the Department of Energy announced it will partner with the state of New Jersey, NJ Transit and the New Jersey Board of Public Utilities to build a microgrid that will power the transit system among Newark, Jersey City and Hoboken as well as critical stations and maintenance facilities.

"This first-of-its-kind electrical microgrid will supply highly reliable power during storms and help keep our public transportation systems running during natural times of disaster, which is critical not only to our economy, but also emergency and evacuation-related activities," Gov. Chris Christie (R) said at the announcement.

Connecticut, the first state to launch a microgrid program, awarded $18 million to nine microgrid projects across the state in July. Gov. Dannel Malloy (D) plans to commit an additional $30 million in the next two years for additional microgrid sites.

New York's Moreland Commission, launched by Gov. Andrew Cuomo (D), has also expressed support for establishing strategic microgrid systems following Sandy. In New York City Mayor Michael Bloomberg's Special Initiative for Rebuilding and Resiliency postmortem report on Sandy, the mayor specifically called for public and private partners to scale up distributed generation systems and microgrids, with the goal of reaching 800 MW of installed capacity by 2030.

The New York State Smart Grid Consortium (NYSSGC), a public-private partnership, is helping coordinate utilities, technology providers, policymakers and universities in the implementation of microgrid systems at various locations in New York City and upstate New York. James Gallagher, executive director of NYSSGC, praised the mayor's focus on modernizing the grid in the face of increasingly frequent and intense weather events. Over the last century, three of the four worst events to hit the New York grid system have taken place in the last two years, he said.

Gallagher underscored at New York Energy Week in June the urgency to build a more robust grid post-Sandy, while also advancing innovative microgrid technologies in the region.

“The Consortium is working with its utility members to establish microgrid projects both in New York City and in upstate New York,” he said. “These action-oriented projects will demonstrate the advances that have been made in power technology, and most importantly, they will show customers tangible benefits and what the smart grid and the utility of the future will truly mean to them. New York should and will lead, and is poised to be recognized as the innovation center of the nation in the field of power research.”

Adaptation, not mitigation
Spurred by Sandy, the New York State Energy Research and Development Authority (NYSERDA) is undergoing a yearlong study on the role of microgrids in providing mission-critical backup power generation. The microgrids NYSERDA is envisioning would not necessarily generate electricity year-round but would only come online in the event of an extended power outage, said Mark Torpey, director of research at NYSERDA.

The state group will also be evaluating a variety of energy technologies, from CHP plants to diesel generators to renewable energy sources, Torpey said. Despite the climate change mitigation benefits offered by low-carbon energy sources like solar and wind, these power plants may be too expensive or too big to install in New York City and the surrounding areas, he added.

"I wouldn't want to give the impression there's a significant potential for microgrids in and of themselves to provide significant [climate] mitigation; it's not their primary purpose. It's more on the adaptation side," he said.

Last month, NYSERDA also closed a solicitation for $10 million in support of research and engineering studies designed to improve the reliability and efficiency of the electric power delivery system in New York state.

Con Edison submitted a proposal to establish a showcase microgrid project in Cortlandt, N.Y., which was severely hit by Superstorm Sandy.

"Running electric grids safely and reliably is what we're good at, and we want to be a part of this implementation," said Troy Devries, director for research and development at Con Edison.

"In addition to that, we see this as an opportunity to transform the grid," he added. "The next phase of the grid is probably going to be a more interactive relationship, not just a one-way feed, both for energy transfers and communication transfers, and control is probably going to be going both ways and lots of different directions."

NYSSGC is also working with National Grid to identify potential microgrid projects in the western part of the state, as well as Clarkson University in Potsdam, N.Y.

Costs and payback of not going dark
Stand-alone microgrids with distributed generation systems are very expensive and logistically challenging to install. But valuing both the direct and indirect benefits microgrids provide could make for an attractive business case, according to Louis Schoen, director of development at the energy consulting firm SourceOne Inc.

In addition to the power outages and physical damage it caused, Sandy cost an estimated $5.7 billion in lost economic productivity. Operating microgrids could have reduced that burden, Schoen said. He added that cities and states may not want to risk losing out on future revenue by failing to fortify their power systems.

"If you are in a place that does not have consistent power and reliability, you're not a good place to be for business," he said. "If you are in a place like New York and you can't depend on your power grid, you move to New Jersey."

The economics are also more or less attractive based on location. In New York, where electricity rates are among the highest in the country, the payback period on a CHP-powered microgrid system could be six to seven years, Schoen said.

But as the first microgrid systems come online, there are concerns related to fair pricing. Self-sufficient microgrids undermine utilities' traditional economic model by ostensibly taking one of their clients away. But at the same time, utilities are responsible for backing up the capacity of a microgrid should it fail.

"If I'm a customer and I have a big building or I have a campus like NYU and I have a microgrid and my microgrid can sustain itself, that's all well and good for me, but when my power goes offline, what do I expect to happen? I expect the utility to be there to back me up. And that can happen on the worst day, on the hottest day of the year, which means lots of expensive infrastructure upgrades," Con Edison's Devries said. "Asking all the other customers to pay for that is not really appropriate."

But it's also important to ensure that utility rates for backup power are fair and equitable to microgrid customers, said Thomas Bourgeois, deputy director of the Pace University Energy and Climate Center. Utilities may try to overcharge microgrid users for standby power to recuperate costs from losing them as regular customers. Utility rates also need to reflect the benefits microgrids can offer by reducing demand on congested grid systems, like in New York City where there's an energy crunch during peak hours.

The best sites for microgrids are likely to be where utility interests combine with end-user interests and the social need to keep electricity flowing throughout disastrous events like Superstorm Sandy, Bourgeois said.

"I think we need to start kicking the tires and testing these systems," he added. "I think we're past paper studies and past doing road maps."

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC., 202-628-6500