Collage of a person signing paperwork, neighborhood block, transmission tower, and hundred-dollar bills.

Event Recap: ‘Implementing a Block-Level Microgrid: The Intersection of Utility Policy, People, Technology, and Economics’

Eunice Chung

What does it take to build an urban, block-level microgrid? As wildfires and power outages threaten the stability of grid infrastructure, how can utilities use localized energy systems to strengthen community resilience? And how might one finance these endeavors? 

EcoBlock’s Dr. Therese Peffer and Rich Brown tackled these questions, and more, during their talk, “Implementing a Block-Level Microgrid: The Intersection of Utility Policy, People, Technology, and Economics,” at the 2023 Annual Institute. Co-organized by the Building Efficiency for a Sustainable Tomorrow (BEST) Center and Lawrence Berkeley National Laboratory (LBNL), the three-day virtual conference attracted community college and university faculty, policymakers, and industry practitioners as they discussed the latest advances in building decarbonization policy, technology, and workforce education.

So Much More Than a Microgrid

As one of four Advanced Energy Communities (AECs) funded by the California Energy Commission (CEC), the EcoBlock project aims to rapidly decarbonize cities through urban, block-scale retrofitting. At its core, EcoBlock tests the idea of aggregation: Instead of adopting the existing, property-by-property approach to energy efficiency and electrification, the project seeks to leverage the economies of scale that come with collective, block-scale retrofits. From reduced vehicle emissions to increased construction efficiency, the energy and operational savings that can be achieved at the block level have the potential to spur the adoption of clean technologies across California.

Diagram outlining nine neighborhood blocks and 180 buildings in red. Text reads: 9 EcoBlock Projects. 180 Individual Projects.
The EcoBlock project posits that aggregated, block-scale electrification and energy efficiency retrofits yield greater economies of scale than individual, property-level ones. Credit: Oakland EcoBlock

Arguably, implementing the technology is the easiest part of the job. “It takes a village,” said Therese when describing the massive, interdisciplinary nature of the project. From utilities and city government officials to homeowners, renters, and everyone in-between, balancing diverse stakeholder interests—while navigating complex political, legislative, and financial hurdles—are key to successfully translating the EcoBlock vision from concept to reality. 

Driving Innovations in Microgrid Policy and Technology 

It can be nearly impossible to implement a multi-customer microgrid within any given service territory—this is because utilities are regulated monopolies under which individual customers are assigned a unique electric meter that monitors their service. A key policy innovation for EcoBlock has been the Community Microgrid Enablement tariff (CMET), a relatively new program by Pacific Gas and Electric (PG&E) that allows, on a pilot basis, multiple PG&E customers to band together and use the utility’s existing distribution infrastructure to share power. This approach allows a community microgrid to island, or break off, from the main electric grid during a power outage and provide its customers with electricity. As such, the EcoBlock team has applied to participate in the CMET program and is currently undergoing approval with PG&E.

So what’s the status of the EcoBlock microgrid? The team is working with PG&E to determine what upgrades are needed to construct the microgrid—which connects to rooftop solar panels for participating properties, a central microgrid battery, and a curbside electric vehicle (EV) and EV charger—the cost of those improvements, and who will be implementing them. The project team will also conduct in-home, energy-based retrofits and exterior site improvements alongside the implementation of a home energy management system (HEMS) to control and monitor participant energy loads.

The Oakland EcoBlock microgrid in islanded mode.
The EcoBlock microgrid will normally stay connected to PG&E’s distribution infrastructure and only operate as a power island during a Public Safety Power Shutoff (PSPS) or any other type of grid outage. Credit: Oakland EcoBlock

Minimizing Costs, Maximizing Savings

Securing funding is central to sustaining any effort. As a primarily grant-funded research project, the capital costs of the pilot Oakland EcoBlock are entirely covered by external sources. While this business model may serve as the basis for future EcoBlocks, other communities will need to adapt their approach based on their means of finance and operation. 

A key goal for the Oakland EcoBlock is to establish recurring energy costs and savings for the residents, ensuring they are not charged any more than they are already paying for. To this end, the EcoBlock residents have established a non-profit mutual benefit corporation—similar to a homeowners association (HOA)—that will own the community microgrid and related assets (e.g., energy storage, microgrid control, solar panels, shared curbside EV chargers), and collect monthly fees from participating households to ensure their continued operation, maintenance, and insurance. The expectation is that the participants’ energy and water savings will cover the costs of the shared equipment and infrastructure.

Financial and ownership structure for the private, in-home and shared, block-scale assets for the Oakland EcoBlock project.
The business model for the pilot EcoBlock. Credit: Oakland EcoBlock

Lessons Learned

Blending design, research, and practice, the EcoBlock team is currently working towards construction, with the goal of breaking ground in 2023. When asked about the biggest learnings from the project thus far, Therese recognized the surprising impact of the neighbor, or peer effect, on the block. She noted that not all 25 participating units would have gotten involved with EcoBlock if it hadn’t been for the dedicated, one-to-one outreach conducted by the residents. Rich further emphasized the importance of education and the need to equip participants with resources so they feel comfortable with navigating the various improvements that will take place in their neighborhood.

Therese Peffer, Rich Brown, and Peter Crabtree in a virtual meeting.
EcoBlock Principal Investigator (PI) Dr. Therese Peffer and Energy team member Rich Brown discuss the pilot project with BEST Center PI Peter Crabtree. Credit: Oakland EcoBlock

Rich suggested that, in hindsight, it might have been easier to implement the project with a pre-existing neighborhood association, as the EcoBlock residents did not have a formal governance structure in place. In addition, adjustments had to be made to the microgrid design, as the research team’s original vision was to have the residents be served collectively as a single, block-level entity with a meter at the front of the block. This approach would have allowed the Oakland EcoBlock to operate as a microgrid at all times, regardless of whether or not power was available through the broader electric grid. While the design is not feasible under current California utility regulations, Rich pointed to alternative models of energy distribution, identifying projects that are constructing new electrical infrastructure alongside new building developments, and redefining what it means to generate, distribute, and own energy.  

The 2023 Annual Institute was sponsored by the National Science Foundation (NSF), HVAC Excellence/ESCO Group, and Contemporary Controls; and endorsed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE). View all presentations and visit the virtual booths via the 2023 Annual Institute event page. Videos from the event are also available on the BEST Center’s website and YouTube channel.

Cover image credit: Oakland EcoBlock

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