Maryland is facing a serious energy crunch. As demand surges and infrastructure strains, costs continue to climb. The state’s reliance on grid operator PJM Interconnect puts the fate of ratepayers in the hands of a regional market that is dependent upon expensive transmission and distribution. Indeed, a recent report from the Washington Post shows that it is the delivery of electricity – transmission and distribution – that is the main source of rising costs.
One of the most promising tools to address this crisis is onsite power generation, or the generation of electricity at the location where it is consumed. These systems not only generate electricity, they also deliver it. When it comes to large loads like data centers onsite power generation can avoid the tremendous costs associated with bringing in electricity from far away – costs that are often borne by other utility ratepayers.
This onsite generation can utilize distributed energy resources such as distributed solar, fuel cells, battery storage, combined heat & power and other DER technologies to comprise a microgrid. Microgrids keep the power flowing during an outage by disconnecting from the grid in what’s called islanding. The system’s controller seamlessly switches from grid power to the microgrid’s local power sources when it senses an outage. In addition to providing reliability, a microgrid provides its customers with energy resilience by avoiding power outages in the first place, or quickly recovering if they do occur. In the case of an outage, the microgrid can be programmed to restore power to an entire facility, or just the most critical components.
A microgrid can be used to strengthen the broader electric grid by augmenting normal grid operations or easing the strain on the central grid during periods of peak demand. It becomes another resource that grid operators can call on during these periods. The advancement of technology now means that onsite power and microgrid systems are now both cost competitive and reliable enough to avoid the need for expensive transmission and distribution investments.
To his credit, Gov. Wes Moore recently recognized the value of onsite generation when he publicly supported a Data Center Coalition proposal to facilitate the expedited interconnection of large loads that agree to “Bring Your Own Generation” (BYOG). The movement to encourage data centers to bring their own generation is growing and was also supported by the governors of Pennsylvania, New Jersey, and Virginia. The initiative is intended to allow data centers to power up rapidly without burdening other ratepayers even as they reduce emissions by avoiding reliance on the old legacy fossil plants that still power the grid. In a similar effort to protect ratepayers, Sen. Katie Fry Hester formed the PJM State Legislators’ Collaborative – bringing together over 60 legislators from across Maryland and other PJM states to propose a mechanism by which data centers would not compete with other grid customers during periods of peak demand.
Nevertheless, a well-intended program administered by the Maryland Department of Environment (MDE) stands in the way. The Maryland Building Energy Performance Standard was initially aimed at reducing carbon dioxide from buildings—a goal we all share. However, during its rulemaking process the MDE applied the rule not only to buildings but also to onsite power located outside of buildings. This fundamental overreach means that the MDE’s Building Energy Performance Standard now penalizes the kind of onsite power that reduces ratepayer costs – and it completely exempts the back-up generators, which can be among the dirtiest sources. The MDEs extension of the Building Energy Performance Standard outside of buildings also stands in direct contradiction to Gov. Moore’s embrace of the Bring Your Own Generation approach for large electric loads and against the efforts of Sen. Hester and other Maryland legislators who have support the PJM State Legislators’ Collaborative.
There’s a simple fix: the MDE should leave the regulation of electricity generation and delivery to the Public Service Commission by applying its Building Energy Performance Standard to buildings, rather than extending the rule outside of buildings to penalize some of the cleanest, most reliable, and most cost-effective energy resources available today. Microgrids and distributed energy give us new tools to address the energy challenges we all face. Governors across the PJM region are recognizing the value of onsite power and microgrids. It is time for the Maryland Department of Environment to do the same.
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