The red-and-blue office building just northeast of the I-494/Highway 100 interchange resembles a futuristic sailboat, or maybe a striped, robotic dog standing at attention.

Inside Open Access Technology International’s Bloomington headquarters, high-powered computer servers and scores of electrical engineers help coordinate the flow of electricity through most of North America’s high-voltage transmission lines.

Now, OATI is working to scale new software and AI-powered solutions for a much different scale: microgrids. The company’s home base is actually proof of concept built on its proprietary platform that synchronizes solar panels, batteries, an onsite cogeneration plant and emergency diesel generators to keep its offices and data center running when the main grid goes down.

“It’s cool that we are a [Twin Cities] company doing all this right here in our backyard, not out in Silicon Valley,” said David Heim, OATI’s vice president and chief strategy officer.

They’re not the only ones. Minneapolis-based Syncris makes high-tech hardware that its founders say simplifies microgrid development. Microgrid Initiatives provides development support and project management services for microgrids nationwide, focusing on state, local and tribal projects. The Center for Microgrid Research at the University of St. Thomas is a nationally recognized hub for advanced microgrid development and “the only institution of its kind in North America offering hands-on training for students and professionals.”

With colleagues from three other Midwestern universities, University of Minnesota researchers are also working to harden the U.S. power grid and local microgrids against cyber threats.

Minnesota’s microgrid influence has been decades in the making, said Michael Burr, founder and director of Microgrid Initiatives.

“The most obvious reason that Minnesota has established an outsized footprint in the microgrid industry is the longstanding presence of major multinational companies that manufacture power electronics and energy controls,” like Honeywell, Siemens, IBM, Eaton and Johnson Controls, he said.

Those companies occupy a multibillion-dollar market alongside more specialized firms like OATI and Pequot Lakes-based Hunt Technologies, which grew into an early leader in advanced metering infrastructure before its acquisition by the multinational Landis+Gyr. Minnesota exported about $2.3 billion in “IT-related electrical equipment” last year, according to the state Department of Employment and Economic Development.

With all this homegrown expertise and manufacturing heft, Minnesota is a hub for microgrid technology and design — and a potential bulwark against rising electricity prices, extreme weather events that threaten grid reliability and other challenges facing utilities and their customers.

Evolving with the grid

OATI is the biggest Minnesota-based company directly involved in microgrid development. Founded in the mid-1990s, it grew largely by other means.

Today, the company says most large blocks of electricity bought and sold in the United States exchanged using software OATI provides to electric utilities, ensuring there’s enough juice to keep the lights and air conditioning on during extreme weather events like the record-setting June heatwave. That’s been the case for decades thanks to a first-of-its-kind software solution that moves (almost) as fast as the electrons themselves.

OATI has since expanded to serve customers outside North America. Because government ownership of transmission infrastructure is the norm elsewhere in the world, OATI’s international work is less market-driven and more focused on helping homes, businesses and power grids work more efficiently and reliably as connected appliances, electric vehicles and small solar and battery systems multiply, said Mary Brown, OATI’s senior executive vice president and chief legal officer.

With import tariffs and recent changes to federal energy policy set to raise electricity bills in the coming years, Brown said those resources will increasingly help reduce Minnesotans’ energy costs.

Utilities like Xcel Energy and Dakota Electric Cooperative have for years paid customers to run air conditioners less and offered discounts for overnight EV charging. Now, technology has advanced to the point that distributed energy resource management systems like OATI’s can effortlessly orchestrate entire neighborhoods’ worth of cars, home batteries, solar arrays and heavy appliances in “demand response” programs that compensate customers for their participation, Brown said.

OATI’s DERMS is especially popular with electric cooperatives, which often serve far-flung homes and businesses in rural areas. More than 150 cooperatives use the platform, the company says, including 24 Dairyland Power Cooperative members in Wisconsin and Minnesota. The same technology can keep smaller microgrids humming along too, either on their own or in support of the public grid.

A race for resilience

The hurricane-force storms that left tens of thousands of northern Minnesota homes without power for days served up a potent — and increasingly commonplace — reminder that rural customers are particularly vulnerable to grid disruptions.

More and more communities are deploying self-contained microgrids that can keep refrigeration, HVAC and critical communications systems running during prolonged outages, Heim said. Last fall, microgrids kept community resilience hubs humming in New Orleans after Hurricane Francine and helped at least one North Carolina mountain town bounce back quickly after Hurricane Helene.

Years earlier, in another hurricane-prone part of North Carolina, OATI partnered with a regional electric cooperative to build a 31-home “cottage community” that could endure frequent power disruptions. The project’s first phase produced more power than it consumed, Heim said, so OATI expanded the design to support about 300 homes in the area. That sort of expansion potential means utilities increasingly see microgrids as supporting rather than competing with the main grid, he added.

“I don’t see much of an upper limit,” he said. “If anything, there’s a lower limit” to microgrids’ potential size due to fixed costs like trenching and wires.

Microgrids have also been a boon for tribal nations’ long-term energy security. In Minnesota, the Biden administration awarded $3.15 million to the Red Lake Nation and $1.75 million to the White Earth Nation last year to set up solar- and battery-powered microgrids at community schools in remote tribal villages.

Beyond local resilience, microgrids offer tribes political and economic leverage, Heim said.

“The mere fact that they’re planning to do some form of onsite [power] generation gives them a seat at the table,” he said. “They can say to the utility, we’d love for you to sponsor this project, but in return you have to give us some concessions.”

The Trump administration’s open hostility toward renewable energy and social justice programs apparently has not stopped the U.S. Department of Energy from supporting tribal microgrid projects. Last month, the department announced microgrid grants worth $8 million to 14 remote communities in Alaska, Nevada and South Dakota. Microgrid Initiatives and a local partner have helped develop several microgrids on tribal lands in Southern California since 2020, most of which received federal support.

“For tribes, energy sovereignty is becoming a necessity,” Heim said.

Closer to OATI’s headquarters, Heim said local developer Renewable Energy Partners should begin construction this fall on two north Minneapolis microgrids in Xcel Energy’s Resilient Minneapolis Project, an effort to improve resilience in disadvantaged communities. OATI is supplying software and controls for the microgrids, which will offset two public school facilities’ energy use and double as places for locals to charge phones, plug in medical equipment and cool down or warm up during prolonged outages, Heim said.

According to Microgrid Initiatives’ Burr, the diversity of recent and planned deployments in urban and rural Minnesota communities underscores a self-reliant streak that has defined local history for generations.

For more than a decade in the late 1980s and 1990s, Burr worked for Independent Energy magazine, a trade publication originally launched in Minnesota “for the independent power industry that evolved to spawn the microgrids that now are transforming the way electricity is generated and distributed,” he said.

“So I guess you could say Minnesota’s place in the microgrid industry also has been driven by the longstanding efforts of Minnesotans to achieve greater energy sustainability, independence, and self-reliance,” Burr said.

Microgrid technology everywhere?

Improving technology could simplify microgrid design, reduce deployment costs and speed adoption among a wider set of customers, said Zach Edmond, co-founder and chief operating officer at Minneapolis-based Syncris.

“Today, every system, every site is a highly custom solution [with] lots of engineering design,” he said. “They’re built as a one-off and not easily expanded in the future.”

Syncris co-founder Greg Mowry, who previously served as founding director of UST’s Center for Microgrid Research, saw those barriers firsthand on repeated humanitarian trips to Africa and Eastern Europe. Frustrated by the slow pace of deployment, he and Edmond returned to the lab and developed a simpler inverter: the box that converts the direct current discharged by solar panels and batteries into the alternating current that most electric devices run on. The inverter is easy to “stack,” so users can expand their microgrids over time without costly re-engineering, Edmond said.

“The core of our technology is more like a lego block,” he said. “If you need more power, you can add more of them.”

Modular design also means a less expensive product, Mowry said.

“Our costs per unit are really low once you hit volume manufacturing,” he said.

Syncris makes its inverters here in Minnesota and markets them through resellers who install them in straightforward solar arrays or more complex microgrid systems. The end customers are surprisingly diverse, ranging from warehouses and manufacturing facilities to schools, healthcare facilities and even municipalities, according to Edmond.

What many of them have in common is an unfortunate location on the “grid edge,” far from large transmission lines and often near the end of the lower-voltage distribution lines that serve smaller towns and neighborhoods. These largely rural locations experience longer and more frequent power outages as well as more insidious “power quality” issues, Edmond said — repeated voltage fluctuations that can degrade sensitive industrial equipment.

“You have a machine that’s supposed to last 20 years and it’s breaking down after seven or 10 years,” he said. “You think it’s the quality of the machine, but after a long investigation you realize it’s the quality of the power.”

Microgrids help smooth out power quality issues and may reduce commercial facilities’ longer-term maintenance and capital costs, Edmond said. They can also reduce heavy power users’ operational costs by reducing the amount of electricity they need to buy from utilities and allowing them to continue operating when the power goes out around them. One Syncris customer found it was losing “hundreds of thousands of dollars a year” due to power outages, Edmond said.

“So, yes, there’s value in the electricity produced, but the true value is a bit deeper than that,” he said.

This article first appeared on MinnPost and is republished here under a Creative Commons license.