Not long ago, the idea of disconnecting from the electrical grid and opting to live a “self-powered” life was limited to either “survivalists” or the realm of science fiction.
That’s beginning to change.
Back in 1973, the English economist E. F. Schumacher published Small Is Beautiful. The idea of the best-seller was to treat economics “as if people mattered.” The best way to do that, Schumacher posited, was by bringing the main elements of people’s lives closer to where they lived (remember, this was at the peak of the 1973 oil crisis). Basic human needs and well-being should be prized above materialism and the “bigger is better” mentality.
Unfortunately, much of the movement spurred by Schumacher spiraled into a survivalist mentality. This projected an inordinate fear of everything, from nuclear war to a zombie apocalypse. A reliance upon the national energy grid became one of the biggest examples of modern dependence.
However, the advent of solar and wind power applications for homes and individual structures has brought the idea of the localized “microgrid” back into discussion. Still, the approach remained geographically limited and faced the hurdles of large infrastructure expenditures.
But today, following leaps and bounds in technology, these local sources of power are quickly becoming viable options.
Local Energy Is About to Take Off
First, what exactly is a “microgrid”? It’s simply any network of electricity supply that provides power to a given confined area. While its primary purpose is the servicing of a few neighborhoods rather than entire cities, it is not merely the latest version of a “dropout” culture.
Of course, microgrids can be regarded as backup sources in the event of emergency, much like a private generator does for an individual residence. And several of these initiatives have been in operation for years, often comprising generators about the size of a tractor trailer sitting in a parking lot. It is now less unusual to find municipal buildings, hospitals, schools, and military facilities outfitted with microgrids.
From arrays of solar, wind, geothermal, and biomass generators to new, improved versions of nuclear batteries, kinetic, tidal, and independent standing small power sources, the separation of local needs from regional and national ones is about to take off.
Flexibility Is Key to the Microgrid
There is a decided advantage to having a microgrid that is just not available when relying solely on the conventional national grid: flexibility.
Local systems already up and operating in Europe are beginning to benefit from using pricing considerations to utilize electricity from the national net or the local generator based on cost. There is also the added advantage of prioritizing end users during times of power outages, allowing a selective approach to brownouts unavailable with the traditional approach.
The combined positives of efficiency and cost savings allow local areas to control the actual disposition of energy and its use. That, in turn, allows for a range of development quite unheard-of just a few years ago.
It also allows for some quite far-reaching experimentations. As the network becomes smaller and subject to block-by-block fine tuning, some truly new approaches become possible. For example. Energy researchers are already talking about designing buildings that are themselves self-contained energy storage units, providing both self-sufficiency and the availability of additional power for other end users in the vicinity.
The Fuel Cell Revolution
The next major advance is centered on fuel cell technology.
Fuel cells have been around for a while. In fact, the first versions were introduced in the 1830s. More recently, they have been making some headway into more mainstream energy usage.
The cells require a continuous stream of fuel and oxygen, generating electricity by producing positively charged hydrogen ions and negatively charged electrons. Water is usually the only byproduct (owing to the interchange between hydrogen and oxidizing agents), although some cells produce carbon dioxide.
Fuel cells are becoming a staple of forward-thinking on microgrids, and for obvious reasons. They are self-contained, highly portable, and allowing about as much versatility as any local application would require.
Yet there remain drawbacks. Leading the list here is the small amount of electricity actually produced by a normal fuel cell. That means a number of cells must be serialized if you want to run more than a few household appliances.
Nonetheless, the next generation of fuel cells will have something earlier versions did not: a rising localized electricity market.
As this revolution in localized energy plays out, I’ll keep an eye out for the best opportunities to profit.
P.S. Today’s biggest story in the geopolitical arena is the Iranian nuclear accord. If you’re a Money Morning subscriber, keep an eye open for a piece I wrote for them about how the deal will – or won’t – affect the energy markets.
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