For more than a decade now, there has been an ongoing debate about the Northwest’s excessive reliance on hydroelectric power. While cheap and a significant driver of the region’s success, the region’s reliance on hydroelectric power impacts salmon habitat and irrigation. There are also serious questions as to whether hydropower can be expanded, especially in light of diminishing flows.

Given the background, it is interesting to see the absence of any debate on the construction of massive data centers, relying solely upon cheap hydroelectric power. In the past two years, Microsoft and Yahoo! started building massive data centers in Quincy, Wash., while Google has a similarly sized data center planned in The Dalles, Ore.

Powering the speed and depth of Internet search requires extensive capital outlays and significant amounts of reliable, digital-grade power. The mantra for the trend is the oft-quoted statement of Jeff Byron, Energy Director for Oracle Corporation: “It is not the cost of electricity that drives our decision-making process; rather, it is the cost of not having electricity.”

You cannot paint technology giants as villains, as local communities have welcomed such developments and no utility has raised any objection, arguably because they will sell more power. Yet in the end, data centers would drain power from the rest of the Northwest, stymie regional economic development and negatively impact salmon recovery and agriculture.

Energy to the technology winner

What is the Northwest to do to power its next round of building and growth? One key concept documented on SmartGridNews.com and discussed often by energy guru Amory Lovins is “microgrids.” A microgrid ties together nearby distributed generation sources on their own feeder line. Then it links the feeder to the grid at a single point. In the event of a disturbance, a microgrid seamlessly separates and isolates itself from the existing grid, while maintaining power availability and quality.

When the existing grid returns to normal, the microgrid automatically resynchronizes and reconnects itself. A microgrid can be a building, a campus or even a network of geographically dispersed, interconnected microgrids.

Several technology providers can make such a scenario happen. For instance, Washington, D.C.–based GridPoint offers an energy-management platform that could enable a microgrid manager to control loads, store energy and produce power through an intelligent network of distributed energy resources (load control devices, batteries, etc.). For users, the platform provides backup power, energy efficiency through online energy management and the ability to integrate renewables.

Financing the technology race

If a microgrid is the answer to reliable, digital-grade power, the next most commonly asked question is how does one pay for it? A possible solution, which several states are now contemplating, involves providing municipalities with the authority to issue state tax-exempt bonds to finance so-called “energy improvement districts” (EIDs).

The name is a play on the familiar “local improvement districts” long used by property owners to pay for services such as street paving, sewers or street lighting. In the case of EIDs, the bonds pay for small-scale, locally sited, self-sufficient microgrids. Connecticut recently passed a law allowing for the formation of EIDs. The Northwest needs to get into the energy race.

Justifying an EID

Guy Warner, CEO of Pareto Energy, a strategic consulting firm that is pioneering the EID concept, is very blunt about the justification for EIDs. “The current grid does not provide the reliability needed to retain and attract information-age businesses,” he asserts. “We are all facing unacceptable risks of periodic, acute power disruption (i.e., blackouts and brownouts) as well as constant, chronic power quality fluctuations (i.e., surges and harmonics). Information-age businesses face large uninsured losses due to equipment damage, product loss and business interruption. Income and employment from high-technology businesses lag as a result.”

Higher reliability might come at a higher cost per kilowatt. However, Warner says fewer outages, fewer business interruptions and multiple environmental benefits make EIDs a compelling proposition.

Dr. Shalom Flank, Pareto Energy’s chief technical officer, makes the point that an EID allows users to operate parallel to the existing grid. The EID can draw power from the existing grid or use its own. Using a transaction model based on cost, reliability and service, it can choose the best power source and delivery options for its customers.

According to Dr. Flank, microgrids can achieve better than 85 percent efficiency, with an enormous reduction in greenhouse gases, by using excess thermal energy for both heating and cooling nearby buildings. Dr. Flank says EIDs are a win-win for strapped utilities and frustrated customers alike.

EID financing microgrids

Northwest businesses and municipalities should seriously consider balancing the energy equation. Several cities, including Portland, Seattle, Spokane and Tacoma, have the commercial and industrial base for microgrid development through EIDs. Hospitals should consider microgrids to solve emergency backup power requirements.

Given the opportunities in the Northwest for renewable energy from solar, wind, wave and tidal, municipalities and energy users need to seriously consider alternatives to hydro. EIDs can meet the electrical needs of member customers, thereby “releasing” hydropower to other users. It’s time that the Northwest enter the technology race for energy.

Philip Bane is the managing editor of SmartGridNews.com.