Managerial Impediments to US Microgrid Development

Conventional electric power plants are now being replaced by advanced microgrids at major military bases. This is a significant shift from purchase of a simple, fixed technological product to partnership with a service provider employing a flexible array of technologies that exploit a broad range of opportunities that will continue to change rapidly over a long period. The US military is currently leading the conversion to microgrids. Policy levers have been applied to make microgrids a success, including new contracting mechanisms, modified rules, ample funding, and political support. Everything appears to be in place, except that the underlying managerial culture is poorly matched to the opportunity. Habitual management and procurement practices have become an impediment, and policy levers have left this culture untouched. These practices grew from experience with the purchase of commodities and long-term fixed assets. While these practices continue to be workable in many situations, they tend to suppress complex, systemic, evolutionary programs for energy and resource management. Alternative practices are proposed that are more likely to bring out the full potential of microgrids.