Local energy: a source of opportunity and resilience in the US energy transition

The rising demand for data centers and electric vehicle charging depots is creating new major loads, coupled with the move to reshore manufacturing in the US and the emergence of new energy facilities such as green hydrogen plants. US grid operators are struggling to handle all this additional load, resulting in power gaps and connection delays. Add to this the increase in weather and climate disasters that regularly cause outages across the country, and the problems with the grid in its current state are becoming impossible to ignore.

At Capgemini, we believe that it’s not just about what the energy transition averts that’s important, but also what it enables. Here we look at what a brighter energy future could look like for the US – one that successfully navigates the move to electrification and empowers its communities with affordable, reliable power supply. How? By supplementing the main grid with independent, local systems of microgrids.

Microgrids – helping to power the future

The US Department of Energy (DOE) believes that by 2035, microgrids will be the essential building blocks of the future electricity delivery system to support resilience, decarbonization, and affordability. Community microgrids are distinct from private or single-site commercial ones, in that they span an entire substation grid area, benefiting thousands of customers.

In the 2030s, we envision that these microgrids will be spread across the USA. The main grid will of course still be a critical piece of energy infrastructure; however, microgrids will serve to boost and strengthen it. A key use case for them will be in the event of extreme weather. Microgrids can disconnect from the main grid when it is down, unstable, or overloaded and switch the supply to its own network of distributed energy resources. This resilient energy infrastructure will insulate the local area from energy outages, which itself protects critical infrastructure, commerce, and citizens’ welfare.

Driving efficiency up and emissions down

The USA is a vast country and increasing electrification in end-use sectors means the US electric power demand will only increase through 2050. Despite marginal improvements, the distribution of electricity across the USA remains inefficient, with around 5% lost in transmission and distribution. Thus, local generation can play a key role in reducing emissions through cutting waste, regardless of how ‘green’ the sources. Local power grids will increase efficiency by bringing the generation and storage of energy much closer to its consumption.

This energy efficiency gain becomes particularly important when we look at the rise of AI. The potential of AI to transform every industry is undoubtedly huge. Yet its high energy intensity, coupled with the growing demand for it, threatens to put the already overloaded grid under strain. By localizing energy generation, businesses can more efficiently meet the energy demands of AI, thereby empowering their innovation.

Building active community engagement

A diverse range of energy sources is needed to make the transition successful, and in this microgrid-enabled future, the country will be actively engaged in decisions around energy mixes. The geographic diversity of the US requires solutions that can be adapted to the specific landscape, as well as specific regional preferences. Renewables such as wind and solar can be combined with more novel technologies such as Small Modular Nuclear (SMR) reactors, green hydrogen and carbon capture and storage (CCS) solutions to improve their local natural environment and civic health, as well as their carbon impact, as they transition away from fossil fuels.

Residents and businesses will also be able to purchase energy directly peer-to-peer from within their own microgrid, with profits then invested back into the community. In this way, the commercial benefits of the energy transition are shared more widely, with communities witnessing first-hand the positive impacts of local energy development.

Decentralization – a key strategy in energy cybersecurity

With its dependency on legacy technologies, the US electrical grid of the 2020s is extremely vulnerable to cyberattacks. Attacks are increasing not just in number, but in sophistication, as hostile state actors and criminals dramatically increase their use of AI-enhanced digital tools to disrupt energy critical infrastructure.

Microgrids’ distributed architecture offers greater inherent resiliency as there’s no single point of vulnerability. AI-powered microgrids have proactive and predictive intelligence defenses that don’t rely on local cybersecurity skills. The microgrid infrastructure also offers inherent redundancy through its diversity. For instance, if a solar installation is attacked, the microgrid can automatically isolate the affected area while continuing to rely on other energy sources.

Energizing high-skilled employment  

An additional benefit will be the new highly skilled and valuable local jobs associated with designing, installing, and maintaining microgrids. As reliance on oil and gas subsides, these workers can reskill to become part of this new, positive energy era. The energy employment gender gap will also begin to close as diversity and inclusion programs train more female talent in the growing renewables sector.  

Last but not least, this new generation of workers will be highly motivated to continually innovate to improve the way the world is powered, as they feel the widespread impact in their local community. The energy transition will not be something that’s happening to them, but rather be the opportunity for them to actively shape their future, together.