One of the enduring lessons of 2012's Superstorm Sandy is that cities without electricity are dark, dangerous and economically hobbled places, and the lag time between outages and restoration of critical power can be the difference between profit and loss, or even life and death.
Given those risks, elected officials and managers of public and private institutions are beginning to understand the importance of not only hardening their buildings against storms, but incorporating resiliency into power delivery systems to ensure that essential equipment and appliances stay on.
Investment in "resilient power technologies," such as solar photovoltaic (PV) systems with energy storage, is ramping up in a handful of cities and states, particularly in the Northeast and California, according to a new report from the nonprofit Clean Energy Group.
But the risks of catastrophic power outages extend far beyond New York and New Jersey to include municipalities in almost every region of the country, from the hurricane-prone Gulf Coast to the heat islands of the Midwest. As such, governments everywhere need to make power resiliency a cornerstone of their emergency planning processes, CEG states.
"Whether you believe in climate change or not, this has become one of the most pressing policy issues of our time," said Lew Milford, director of the Vermont-based nonprofit.
"We as a group have been watching this trend [of disruptive power outages] since the late 1990s, but what Sandy did was set in people's minds the idea that there's a new normal for these kinds of events," Milford added. "For the first time, governors, mayors and councils realized that the status quo approach of counting on utilities to quickly restore power, and using diesel generators for backup power, was simply not good enough anymore."
One solution: solar plus battery storage
CEG early this year launched the "Resilient Power Project," a coordinated effort to move the clean energy discussion beyond the environmental benefits of renewable fuels, energy efficiency and carbon reduction to address the role such systems can have in promoting energy security, electric reliability, and the everyday health and safety of citizens.
Resilient power systems, which include solar PV coupled with storage, fuel cells and microgrids, are emerging as some of the most promising technologies for meeting those goals, according to CEG. But wide-scale adoption of such systems will depend on state and local governments tapping new and creative financing mechanisms for bringing projects to fruition.
CEG argues that there are a variety of ways to finance resilient power systems that don't burden taxpayers or rob budgets of money for essential services. These include bond markets, green bank financing, credit enhancement and third-party ownership deals that allow projects to be properly designed, scaled and built, often with little or no money down.
Robert Sanders, CEG's senior finance director and lead author of its latest report, titled "Financing for Clean, Resilient Power Solutions," said that often "there's a big overlooked opportunity" when it comes to financing such infrastructure because municipalities have traditionally looked to state-sponsored loans and grants to address such needs.
In other cases, federal regulations stipulate that certain types of facilities have technology-specific power backup systems -- like diesel generators -- even if those systems are costlier, offer less return on investment and are less effective at meeting specific needs than clean energy systems, according to CEG.
"The goal of this paper and CEG's future work is to identify financing tools that can be used to implement projects and that will attract private capital on highly favorable terms, thereby reducing the cost of solar-plus-storage and other resilient power technologies," the paper states.
States try creative financing
Among the types of financial structures that may be available to purchase the systems are bond financing, state-run green banks, credit enhancement programs and third-party leasing agreements.
Such tools have been successfully applied in a variety of states and regions, including Connecticut, Maryland, Massachusetts, New York and Vermont, which together have committed more than $135 million to develop microgrids and other resiliency projects.
New Jersey, meanwhile, has launched the nation's first Energy Resilience Bank, which will dedicate $200 million in grant and loan funding to eligible projects. New Jersey has also created a separate $3 million fund to advance renewable energy projects with energy storage components.
California also has solicited $20.5 million in new investment in microgrids and resilient power technologies, while Hawaii and Puerto Rico have made smaller commitments.
CEG further notes such systems could prove especially helpful to low-income communities, "which need resilient power the most and suffer disproportionately from severe weather events."
"With resilient power applications, communities can shelter in place and are better able to withstand the potential harm from loss of electricity," the report said.
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