The world looked on in disarray as oil prices went negative for the first time in history. This wasn’t the only covid-induced consequence, an economic global recession followed. Now, thought leaders are witnessing a reversal in globalisation. With so much emphasis on the principle of efficiency and the global production of goods, should maintaining resilience for local economies and energy systems not prevail?
The pandemic continues to highlight substantial changes occurring across society, especially in the energy sector. Digitalization, cognification and tech-fuelled exponential growth of renewables are innovations all based on distributed networks. They allow us to manage previously unimaginable complexities while making nodes more self-aware and capable. Distributed networks, like microgrids, can prove more resilient, adaptive and even self-organising. This perspective is changing. Decision makers are investigating local microgrids as a way to recuperate from the financial crisis by securing the economy and maintaining resilience for energy systems. With the fossil fuel market heavily disrupted post-pandemic, the need for resilience is coming to light. Low oil prices aside, the emergence of cheap renewables optimises the cost of generation in a microgrid and eliminates the reliance on fossil fuels. The benefits of a microgrid therefore extend beyond energy independence and zero carbon emissions; they are also economic.
The IEA has projected that 30% of future electrification efforts will be supplied by microgrids. This includes existing diesel microgrids that could be integrated with renewables as well as future built microgrids that will likely skip fossil fuels altogether. While microgrids have long been associated with rural electrification in the global south, the proliferation of renewables triggers the reconceptualising of old frameworks in the energy world. PG&E, the largest utility in California, filed for bankruptcy since causing catastrophic wildfires from their transmission lines in 2017 and 2018. They are now conducting “wildfire safety works in local communities”. This means nothing less than the utility is opting to de-energise large transmission lines and instead supply power to local communities from renewables via microgrids. The environmental advantages of this are evident, but the economics of doing so remains a question.
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