Political, Institutional, and Economic Drivers of Community Microgrid Adoption

• In Event: Local and Community Governance of Environmental Policy

Abstract

A critical issue in environmental policy in the context of climate change and technological innovation is the ways in which communities understand and react to infrastructure innovation. Our work investigates a variety of factors that may drive social acceptance of distributed energy resources such as microgrids. Microgrids allow a set of electricity users and small-scale generators to “island” themselves from the main electricity grid during critical events. In the context of small, rural, or isolated communities, the development of a microgrid can provide vital electricity (and by extension, resiliency) services in the face of extreme events such as disasters, climate change, and other disruptions that will be more likely in the future. Microgrid implementation is challenged by the higher costs of such services, and the fact that such services might not be fully available to all households, but instead may be apportioned to key community service institutions (emergency services, medical, supplies, water, etc.). Further, the institutional design of utility tariff systems for communities to pay such costs can be controversial.

We assess political and demographic factors associated with the valuation of microgrid services. Specifically, we analyse how community residents value the services that could be provided by a local microgrid during extreme events with long-term or widespread power outage. These services may allow entities like hospitals, shelters, water treatment facilities, and select retail services to maintain service while the community at large is without power. Second, we develop and test a unique tiered approach for paying utility pricing tariffs that cover the cost of supplemental microgrid services that prioritizes geographic proximity to services.

We use a choice experiment (contingent valuation) survey approach (n=800) to estimate how much residents are willing-to-pay, through their electricity bill, for these services to be available during an extended power outage. In addition to choice experiment questions, we analyse general political and attitudinal questions about energy, the environment, and about the prioritization of different kinds of concerns in the context of microgrid development. Our analysis provides better information about which services residents value, how to use such information to determine microgrid implementation, and the institutional pricing structures that accompany it.

Author

• Stephen Bird, Clarkson University