By Julian Spector, Sept 2, 2021, Canary Media
New Orleans is paying the price for postponing microgrids
I used to jump at the chance to report on new business models for microgrids — breakthroughs that promised local, resilient energy for any community that wanted it.
Years later, that breakthrough still hasn’t arrived. And people are suffering because of that.
It’s hard to imagine a clearer example than Hurricane Ida’s collision with New Orleans this week. We saw that Ida knocked out all eight transmission lines into the city, plunging nearly all residents into darkness.
But a new, must-read story from Canary Media’s Jeff St. John reveals how that outcome followed local authorities’ repeated dismissals of proposals to invest in decentralized and resilient grid upgrades.
“We’ve been advocating for microgrids to be built within the city for years for precisely this reason,” said Logan Atkinson Burke, executive director of New Orleans-based nonprofit the Alliance for Affordable Energy.
Back in 2016, that group proposed populating the city with pockets of locally produced and controlled power, which could function on their own if extreme weather severed ties to the outside grid. Instead, the City Council was swayed by the arguments of monopoly utility Entergy New Orleans to build a 128-megawatt gas plant at a cost to customers of $210 million.
Critics of the plant objected to its location in a flood-prone area in a part of the city predominantly home to people of color. Subsequent reporting revealed that a firm hired by Entergy paid actors to show up at a key hearing, fabricating the appearance of community enthusiasm for the massive plant.
But Entergy got to spend that money, and its gas plant went dark in the emergency. The people of New Orleans got a $210 million “brick,“ in the words of Gregg Dixon, a cleantech entrepreneur who had proposed a cheaper, community-based alternative to the plant.
Entergy also successfully fought efforts to require more local and resilient energy in the city’s recently passed long-term clean energy requirements.
New Orleans even won millions of dollars of federal funding in 2016 to pay for community microgrids, but it has yet to build anything with that money.
Disasters have a way of reinforcing people’s prior assumptions. But there’s a clear record here:
- Community groups asked for the chance to access local, resilient power.
- They got denied by the people in control of grid planning.
- Then they got stranded without power in sweltering heat and humidity when the conventional infrastructure failed.
I’ll add a caveat to that: Just because the old grid model failed doesn’t mean a distributed alternative necessarily would have worked.
- Intense storms take a toll on that equipment too, and there’s an ongoing gap between the capacity of home battery products on the market and the needs of a typical American household.
- The go-to tool for prolonged backup power is still a diesel or gas generator.
- Jeff found some examples of microgrids that did stay online, and we’re on the lookout for more examples.
The other important thing to note is that New Orleans is no outlier in its achingly slow adoption of available grid technology.
- New York City had hardly built any microgrids years after Superstorm Sandy knocked out power.
- California has been slow to adopt the practice, even as its utilities intentionally shut off power to communities to reduce the odds that utility equipment will spark deadly wildfires.
The reasons behind this are various:
- Regulators typically haven’t spelled out pathways for swift approval of microgrids.
- Installing a microgrid at a single home or business may be doable, but linking up a whole community can’t happen without the participation of the local utility. If the utility isn’t motivated to move quickly, projects won’t move quickly.
- Valuing resilience is tricky, especially when microgrids require a lot of money to protect against outages that may or may not happen.
- Numerous companies now offer zero-money-down “microgrid-as-a-service” products. But they still have to contend with the particular needs of each microgrid customer. These differences make it hard to standardize the product.
I could go on. The key point is that technology to isolate a building or a neighborhood and operate it independently during a grid outage is readily available and already in use around the world.Opting not to partake of it is a choice. The days when a gas plant was considered the only option for electricity in a pinch are over. And you can’t always count on a gas plant in a pinch — as New Orleans saw firsthand.
Back in 2016, New Orleans–based nonprofit Alliance for Affordable Energy proposed a radical alternative to Entergy New Orleans’ plan to build a new natural-gas-fired power plant: build clean electricity resilience from the ground up instead.
Entergy New Orleans, the investor-owned utility serving the region, wanted to construct a 128-megawatt natural-gas plant to support the city during moments of power grid stress, including hurricanes.
The Alliance for Affordable Energy countered with an “integrated resilience plan” that called on the utility to seek out alternatives to a central power plant, warning that such a plant would be subject to “known vulnerabilities,” such as flooding or damage to power lines connecting it to the larger grid. The nonprofit called instead for pursuing distributed microgrids: self-powered islands of solar power, batteries and backup generation that could provide electricity amid grid outages.
Entergy fought back against this plan, and the New Orleans City Council, which regulates the utility, ended up approving the gas-fired power plant instead of the distributed energy proposal. But that power plant was shut down after Hurricane Ida knocked out all eight of the transmission lines connecting the city to the larger regional grid, leaving New Orleans in a blackout that could take weeks to recover from.
For Logan Atkinson Burke, executive director of the Alliance for Affordable Energy, this failure to prioritize community resilience in the face of deadly storms is “beyond frustrating.”
“Had we taken the time and initiative to plan for distributed generation, distributed solar-plus-storage and more energy efficiency, people would be more prepared to shelter safely and comfortably,” Burke said in a Monday phone call from Alabama, where she was staying after evacuating New Orleans over the weekend.
“We’ve been advocating for microgrids to be built within the city for years for precisely this reason,” she added. But proposals from advocacy groups including hers asking Entergy to incorporate distributed energy resources into its long-range energy plans have so far failed to gain traction.
Entergy New Orleans was able to fire up the power plant on Wednesday to restore power to some customers in the city. But the vast majority of the city remains in the dark, and the utility warned in a press release that the “extensive damage to the system across the region” has made it “difficult to move power…to customers and limits options…in the event of equipment failure or additional damage to the system.”
What’s hindering microgrid development?
New Orleans’ experience of extreme weather and power outages is not unique, as indicated by the widespread winter blackouts in Texas in February and years of wildfire-driven outages in California. Nor is its experience with frustrated attempts to put ever-cheaper solar panels and batteries to use in backing up communities facing the impacts of weather-driven outages.
Critical facilities including hospitals, fire stations and water treatment plants have installed backup power systems to ride through hurricanes, floods and other grid-disrupting disasters. But efforts to build out similar backup systems for communities at large have often failed due to technical, regulatory and cost challenges.
New York and other states wracked by Hurricane Sandy in 2012 directed millions of dollars toward community microgrids, after watching hospitals and college campuses with their own on-site generation systems keep the power on. But these efforts have yielded only a handful of projects able to surmount the complex planning, permitting and cost barriers that stand in the way of such systems getting built.
In California, years of wildfires and fire-prevention power outages have left hundreds of thousands of customers without power, sometimes for days at a time. This has driven demand for community energy resiliency. But regulators, utilities, communities and distributed energy providers have struggled to find a workable model for linking solar, batteries and generators to connect utility customers into self-powered microgrids that can be “islanded” from the larger distribution network in emergencies.
Even projects with outside funding can struggle to gain traction in the face of these barriers. Back in 2016, New Orleans won approval for $144 million in federal funds to make the city more resilient against hurricanes. About $5.75 million of that was earmarked for community microgrids. A year-long study by U.S. Department of Energy labs found that such microgrids in New Orleans could offer critical “lifeline support” to gas stations, grocery stores, pharmacies and other essential neighborhood services.
DOE projected in 2016 that the funding could lead to several microgrids being built by summer 2018. But the process of turning the funding into on-the-ground projects has been “really slow to move,” Burke said. Construction of microgrids in the section of the city picked for them has not even begun. The latest plans from the city’s Office of Community Development have set a proposed construction start of late 2021 or early 2022.
Entergy’s long-standing opposition to distributed energy
At the same time, utility Entergy New Orleans has consistently opposed including local renewable energy and energy storage in its long-range plans, Burke said. That opposition played a big role in sinking her group’s resiliency proposal, which called for major efforts to harden equipment against storms, distributed natural-gas-fired combined-heat-and-power systems, and battery backup power combined with new and existing solar, as well as tapping the federal microgrid funds that have not yet been put to use.
Utilities have an incentive to convince regulators to approve big power plants rather than enabling customer-sited distributed energy such as rooftop solar. Vertically integrated utilities like Entergy are paid a guaranteed rate of return on capital investments including power plants, whereas self-supplied customer energy reduces the revenue utilities earn from selling electricity.
Entergy ended up getting approval for its preferred integrated resource plan, which included $210 million to build a new gas power plant. In the process, the utility spent more than $1 million to counter community opposition to its plan, including paying a company to hire actors to pack city council meetings and express support for it as being the only option to provide reliable power.
“It didn’t matter how many expert witnesses we brought to the table to say, ‘Here are other options,’” Burke said.
Entergy also fought back against proposals to include distributed energy in the city’s renewable and clean portfolio standard. Energy Future New Orleans, a coalition of advocacy groups, proposed a “Resilient + Renewable” plan that would have set a 2025 deadline for 10 percent of Entergy New Orleans’ energy supply to come from customer-sited assets. These would have included “grid-connected resources like large-scale storage and microgrids to provide emergency backup power and grid support.” Another 20 percent would have had to come from net-metered resources like rooftop and community solar, as well as energy efficiency measures.
Entergy New Orleans fought against that plan for years; along the way, the utility was accused of engaging in bad-faith negotiating tactics and threatening legal action against the chief proponents of the clean energy standard, including city councilmember Helena Moreno.
The city council passed the clean energy standard in May, ordering the utility to cut the carbon emissions of its electricity by 80 percent by 2040 and 100 percent by 2050, but ultimately, the council did not include the distributed energy proposals in its final mandate.
Moreno expressed frustration with the utility’s lack of preparation for restoring the city’s electricity infrastructure in a Monday interview with local television news reporters at the site of one of Entergy’s downed transmission towers.
“I got off the phone with the Entergy engineers earlier today, and they told me that the assessment — the assessment alone — of the transmission failures could take up to four days,” she said. The utility has provided no estimates of when it might be able to restore the transmission needed to allow nearby power plants to combine their capacity with Entergy’s new gas-fired power plant “to keep [New Orleans], for lack of a better term, afloat.”
Moreno also emphasized that power plants forced offline during the storm will need their own assessments before they can be brought back online; the distribution grid networks that carry power to buildings will require inspection and repair before power can be restored as well. The Entergy outage map below indicates the vast scope of the outages as of Tuesday afternoon.
Power grids are complex systems that require careful planning to restart after an outage, heightening the value of distributed resources that can be designed to support individual buildings or clusters of buildings or broader neighborhoods. They can also provide valuable services when the grid is up and running to help cover the costs of using them as backup systems.
In 2018, demand response provider Voltus approached the New Orleans city council with a proposal to tap backup generators, batteries and load controls to provide a level of grid support equivalent to what the new power plant would provide.
As part of that process, Voltus identified about 100 megawatts of backup generators at hospitals, water treatment plants and the city’s convention center that could be aggregated into a virtual power plant at a cost of about $10 million, CEO Gregg Dixon said. “The challenge they faced was that the council had already approved the $210 million power plant that is now essentially a brick.”
Dixon pointed out that the new plant’s value as a backup power source to the city, complete with “black-start” capability to restore power after an outage, depends on maintaining the single transmission line that connected it to the larger grid. “That’s a single point of failure,” as opposed to distributed resources that can keep individual buildings up and running, he said.
Even the megawatt-scale solar installations built by Entergy can’t operate without a working grid to support them, according to Burke. One 1-megawatt solar system built in 2016 is paired with batteries, making it a potential source of backup power for nearby residents, she said. “But because there has been no effort to build a microgrid or to properly island” the system from the surrounding grid, “that’s not useful for the folks who live near those systems.”
As of Tuesday afternoon, Entergy New Orleans representatives had not responded to Canary Media’s emails seeking responses to questions regarding what plans or investments it had made to enable its power plant or solar systems to provide emergency power amid outages.
How to grow support for community microgrids
New Orleans does have a handful of sites using solar power and batteries to provide backup power. Last year, disaster resiliency organization SBP commissioned a $10.3 million solar and battery microgrid for an apartment building with 50 units, half of them reserved for military veterans. The project was funded with grants from Entergy, the Louisiana Housing Corp. and the National Housing Trust Fund.
This microgrid rode through last year’s Hurricane Zeta and this year’s Winter Storm Uri, the same one that blacked out much of the Texas grid, said Lauren Avioli, SBP’s director of housing development, said in a Tuesday email. The battery was knocked offline during Hurricane Ida but was back online and powering the apartment complex as of Tuesday, she said.
Other microgrid development models could offer hope for weather-wracked communities. California state funds have helped build a handful of microgrids that have provided shelter to communities during wildfires in the past few years, while also helping to reduce grid stress during heatwaves that led to rolling blackouts last August. In Baltimore, a set of state-funded community resiliency centers are being equipped with solar and battery systems meant to provide power through days of grid outages.
Several bills introduced in Congress this year could help more microgrids get built. Those include a bill from Senator Edward Markey (D-Massachusetts) targeting $15 billion toward predevelopment costs for “resilient climate infrastructure,” and another bill from Representative Jimmy Panetta (D-California) that would extend tax credits for microgrid projects. The sponsors of both bills are seeking to have them included in the budget reconciliation package being promoted by Democrats in Congress.
In the meantime, however, Burke is hoping that the plight of New Orleans, as well as the hundreds of thousands of Louisiana and Mississippi residents left without power in the wake of Hurricane Ida, will spur changes in how the region invests in local energy resilience.
“Frankly, I hope that Entergy is taking a close look at what happened,” she said. “I think it’s worthwhile for DOE and FEMA to be part of this.”
“This isn’t the first time that a grid has collapsed due to a hurricane,” she said. Entergy’s grid suffered more than a billion dollars in damages and took weeks to fully restore in and around the Lake Charles, Louisiana region in the aftermath of Hurricane Laura last year. And with climate change driving more extreme weather, “it certainly won’t be the last time.”