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Tesla and other solar companies are designing the grid of the future

A microgrid in Genrmany

The energy grid of the future will consist of 100% renewable sources, mostly located at or near where the power is consumed, linked to batteries and other kinds of storage to save generated energy until it is needed. The system will be connected at the local and regional levels so that power can get to where it needs to be at any time.

Those local and regional connections are called microgrids, and they’re not some figment of a futurist’s imagination; they’re working right now all over the world, in the most obvious of places: islands.

Tesla island microgrid


Tesla alone has installed at least 5 of these microgrids on islands around the western hemisphere, including one on the American Samoa island of Ta’u, which provides the 600 people living there with almost 100% of their power needs, and will continue doing so for decades to come.

And it’s not just headline-grabbing Tesla getting in on the game. Other companies, like Schneider Electric and Engie, have their own pilot programs working to integrate various forms of energy generation into microgrids on various islands.

Islands offer a unique testing ground

Now, maybe it seems like a solar-powered microgrid can only work if you’re providing power for 600 people on a sunny Pacific island, and that’s a little bit true… for now. But the cost of solar power continues to fall, and the cost curve for battery storage is just as aggressive.

The chart below shows how the price of solar power has fallen over the last 40 years (green triangles), to less than 1% of what it once was, and also how battery storage pricing (blue diamonds) is following a similar downward trajectory.

Cost curves of solar and battery storage

Bloomberg New Energy Finance

Very soon—like within 5 years—the cost of solar-plus-storage solutions will beat almost any other energy generation technology when it comes to cost of production over the system lifespan.

But back to islands: since the beginning of electricity generation, islands have had to rely on imported fossil fuel sources. Islands in the Caribbean and Pacific alike have generation facilities that burn oil, coal, or diesel fuel for power. Importing those fuels is expensive, carbon-intensive, and subject to fluctuating market prices.

And that means expensive electricity. Hawaii has long had the highest electricity prices in the nation, with current costs for residential customers at $.26 per kilowatt, or double the national average.

Furthermore, islands are closed systems with discrete energy needs, and tropical islands have the added benefit of relatively stable climate. That makes it easier to design a renewable-focused microgrid to meet those needs, based on historical peaks and projections for future growth.

So islands are the perfect proving ground for these technologies, and when solar-plus-storage prices fall low enough, the companies with the most experience in building and administering microgrids will be ready to bring them to the mainland.

But gaining that experience will take more than electrifying an island of 600 people. And now, in the wake of the disaster that was Hurricane Maria, these companies have a chance to prove themselves in a place where over a million people continue to live without power, months after the storm.

An opportunity in the wake of disaster

A Puerto Rico transmission tower destroyed by hurricane Maria

Ricardo Rossello

Hurricane Maria struck Puerto Rico on September 20th, as a high-end category 4 storm, destroying nearly everything in its path with wind speeds up to 175 miles per hour. Almost immediately, the storm knocked out all grid power on the island, and it was more than a week before even 10% of electric generation was back on line.

Nearly 2 months later, on November 5th, 2017, that number stood at 42% (check the most recent number here). On that date, CBS News covered the long-term power outage as “the longest blackout in U.S. history,” and chances are the blackout will continue for more than twice as long.

Hurricane Maria was a horrible disaster. The people of the Caribbean need help today, and will continue to need help for the foreseeable future. With the grid destroyed, the immediate goal should be restoring power, and with groups like Resilient Power Puerto Rico and Empowered By Light working to help, the people of Puerto Rico have already benefited from solar power on a small scale.

But the storm also provides Puerto Rico with an opportunity to rebuild in a smart, forward-thinking way. And with estimates that the full restoration of power may take 4 months from the date of the storm, now may be the time to do that.

Puerto Rico’s Governor, Ricardo Rossello seems to agree. Ressello responded to a Tweet from Elon Musk regarding how Tesla could help restore power to parts of the island. Just over two weeks later, Tesla had installed a microgrid of solar panels and batteries big enough to provide all the power for the Puerto Rico Children’s Hospital.

Tesla microgrid at Puerto Rico Children's Hospital


German battery storage company Sonnen is also on the scene, with 15 of their microgrid systems on the ground in Puerto Rico and on their way to being installed. The first is already powering a church in Loiza.

The bottom line

Hurricanes destroy things, including solar panels. Here’s a picture from Puerto Rico Governor Ricardo Rossello showing what Maria did to a solar farm there:

An aerial photo of a destroyed solar farm in Puerto Rico after Hurricane Maria in September 2017

Ricardo Rossello

But rebuilding with solar will continue to get cheaper, while replacing existing technologies like transmission lines is a known cost. Steel and concrete and cable will cost relatively the same any number of years from now, but solar costs are falling. And now that solar is cost competitive with traditional energy sources, it’s time to build it.

Solar power isn’t going to be the answer for Puerto Rico this year, but with companies like Tesla and Sonnen competing to win contracts to help build a more robust grid there, the island’s energy infrastructure could see a wholesale reinvention in the coming years. And the next time a hurricane ravages the island, microgrids can help make it more resilient, and better able to recover quickly.

After all, even without supplies on the island, the time to deploy the Tesla microgrid system was measured in days, not months. Scaling up, this could be a solution for the future of Puerto Rico, and for your city as well.

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