Grid-Integrated Microgrids
Plenary Session
Power Delivery & Utilization Advisory Meetings
Baltimore, Maryland
September 09, 2013
Microgrids in the News
The Signposts of Change
© 2013 Electric Power Research Institute, Inc. All rights reserved.
2
Microgrids
Bulk supply
connection
What is a microgrid?
Single Customer
Microgrid
Distribution
Substation
• Interconnected loads
and distributed
energy resources
DER
DER
Other
Feeders
DER
• Acts as a single
controllable entity
• Connects and
disconnects from
the grid
Feeder
DER
Full Substation Microgrid
Full Feeder Microgrid
Partial Feeder Microgrid
© 2013 Electric Power Research Institute, Inc. All rights reserved.
3
What is happening in Japan?
• $32M Subsidy for application of Building
Energy Management Systems (BEMS)
and Home Energy Management
Systems (HEMS)
• Feed in Tariff for PV Applications
(approx 40 cents/kwh)
• Residential and commercial storage
applications also subsidized (Orix
storage leasing program $50/month)
• Electric vehicle charging with two way
capability
© 2013 Electric Power Research Institute, Inc. All rights reserved.
4
But Why Microgrids?
LCOE for DG in Commercial
Applications
$0.25
LCOE
$0.20
50 kW Microturbine
1 MW Industrial Turbine
400 kW PureCell
200 kW SOFC
$0.15
$0.10
Remote Power Systems
$0.05
$$- $2 $4 $6 $8 $10 $12 $14 $16
Price of Natural Gas ($/MMBTU)
Impact of Natural Gas
Resiliency
© 2013 Electric Power Research Institute, Inc. All rights reserved.
5
Utility Challenge – Integration
© 2013 Electric Power Research Institute, Inc. All rights reserved.
6
Framework for Today’s Discussions
• Draft Primer Released as
Framework for Discussion
• Authored by:
– Arindam Maitra
– Ben York
– Haresh Kamath
– Tom Key
– Vikas Singhvi
• Great Panel of Utility Speakers
• Plans for follow-up Webcast to
Guide Future RD&D
© 2013 Electric Power Research Institute, Inc. All rights reserved.
7
Microgrid Plenary Session
• Tom Reddoch – Facilitator
• Jim Mader, United Illuminating
• Mike Rowand, Duke
• Tom Brill, SDG&E
• Rick Smith, Ameren
• Panel of Speakers and All
© 2013 Electric Power Research Institute, Inc. All rights reserved.
8
Microgrid Plenary Session
• Tom Reddoch – Facilitator
• Jim Mader, United Illuminating
• Mike Rowand, Duke
• Tom Brill, SDG&E
• Rick Smith, Ameren
• Panel of Speakers and All
© 2013 Electric Power Research Institute, Inc. All rights reserved.
9
The United Illuminating
Company
EPRI Power Delivery &
Utilization Program
“Microgrids” – What’s in a Name
Jim Mader
September 9, 2013
The United Illuminating
Company
I. What is a Microgrid?
• Definition(s)
• Elements to Consider
II. CT Microgrid Grant & Loan Program
• Program Summary
• Approach to Award Funding
• Program Results
Agenda
The United Illuminating
Company
What is a Microgrid?
The DOE Definition…
1. A microgrid is a group of interconnected loads and distributed energy resources
within clearly defined electrical boundaries that acts as a single controllable
entity with respect to the grid and that connects and disconnects from such grid
to enable it to operate in both grid-connected or “island” mode .
The State of Connecticut Definitions….
1. "Microgrid" means a group of interconnected loads and distributed energy
resources within clearly defined electrical boundaries that acts as a single
controllable entity with respect to the grid and that connects and disconnects
from such grid to enable it to operate in both grid-connected or island mode.
(As
defined in Public Act 12-148)
2. "Critical facility" means any hospital, police station, fire station, water treatment
plant, sewage treatment plant, public shelter or correctional facility, any
commercial area of a municipality, a municipal center, as identified by the chief
elected official of any municipality, or any other facility or area identified by
the Department of Energy and Environmental Protection as critical; (As defined in
Public Act 12-148)
The United Illuminating
Company
Microgrid and Critical Facility Examples
Example of an Electric Distribution
Company Distribution System Circuits and
Critical loads
Examples of Microgrid Architecture on a Radial
Distribution System – From Single Customer up to the
Entire Substation
The United Illuminating
Company
Microgrids… Elements to Consider
Microgrid – a distributed resource (DR) island system
Characteristics:
Technical:
• Has Distributed Resources
and load
• Proper control of voltage/frequency
/power quality
• Protection schemes and
modifications
• Changes in power-flow magnitude
and direction
• Steady state and transient conditions
• Reserve margins, load shedding,
demand response, and cold load
pickup
Operational:
Safety – Lockout/tag-out
Protection coordination
Load to generation matching
Load (phase) imbalance
Microgrid communications,
monitoring and dispatch (mini EDC)
• Ongoing maintenance
•
•
•
•
•
Economic:
• Microgrid and non-microgrid
customer impacts
• Balancing of cost vs. reliability
• Lifespan of installed system
• Ability to disconnect and
parallel with distribution
system
• Intentional and planned
islanding
Synchronizing
Device
The United Illuminating
Company
Microgrid Legislation in CT….
PA12-148 “An Act Enhancing Emergency Preparedness and Response”
I.
Sec 7 – the Department of Energy and Environmental Protection shall establish a
microgrid grant and loan pilot program to support local distributed energy generation
for critical facilities:
•
•
•
•
•
Program not to exceed $15M
Evenly distributed between small, medium, and large municipalities
Provide assistance for the cost of design, engineering services, and interconnection infrastructure:
File a report no later than 1/1/13 identifying other funding necessary to expand the Microgrid program
Study the methods of providing reliable electric service to Critical Facilities and make a recommendation
no later than 1/1/13 (microgrids, undergrounding, portable generation)
PA13-298 “An Act Concerning Implementation of Connecticut's
Comprehensive Energy Strategy and Various Revisions to the Energy Statutes”
I.
Sec 39 - authorize any municipality or state or federal governmental entity that owns,
operates or leases Class I, Class II, or generation less than 5 MW to independently
distribute electricity generated from any such source across a public highway or
street provided (1) any such source is connected to a municipal microgrid (2) engage
the EDC for interconnection
• Funding an Additional $30M for Microgrid Projects Staring in Fall 2013
Executed Program in 3 Phases….
The United Illuminating
Company
2012
Sept - Oct
Nov - Dec
2013
Jan- Feb
Mar- Apr
May - Jun
July - Aug
Sept - Oct
Nov - Dec
Request For Information (RFI)
Phase
Develop Project Feasibility
Application (PFA) Phase
PFA Phase
Develop Request For Proposal
(RFP) Phase
RFP Phase
Award MG Program Winners
Execute MG Projects (2013+)
PFA Phase Criteria
•
Reviewed 24 Criteria, utilized IEEE 1547.4 for
technical review
•
Established Project Pass/Fail on 12 Critical Criteria
•
Utilized Pass/Fail/Conditional result to allow
applicants move into next phase (RFP)
•
Evaluated 36 statewide (13 in the UI Territory)
RFP Phase Criteria
•
Review was based on technical, financial,
managerial & operational, social, environmental
categories
•
Established final score of each application
•
Present findings to DEEP
•
9 MG Projects awarded $$ (3 in the UI territory)
Results of DEEP PFA Phase Evaluation
The United Illuminating
Company
Town Campus
High School
Town Center
WPCA
Municipal Center
Tweed (East
& West)
WPCA
Sikorsky
Public Safety
Public Works
City Hall
Public Works
WPCA
Pass
Conditional Pass
Failed
Results of DEEP RFP Phase Evaluation
The United Illuminating
Company
Woodbridge
Town Campus
Facilities:
Police Stations, Fire Station, Department of
Public Works, Town Hall, High School, Library
UI performed a study with EnerNex to compare
a microgrid solution with Emergency
Generation (utilizing gas fired turbines) and
found the Microgrid solution to be between 2.7x
and 4.4x more expensive!!
Generation:
1.6 MW natural gas, 400 kW fuel cell
Cost:
Project Cost: $9.9M
Cost per kW: $5,051
Facilities:
Police Station, Emergency Operations Center,
Cell Tower, Fire Headquarters, Shelter
Generation:
50 kW natural gas recip. engine, 250 kW
natural gas recip. engine, 27 kW PV, 20 kW PV
Facilities:
City hall, Police Station, Senior Center
Cost:
Project Cost: $1.3M
Cost per kW: $3,369
Fairfield
Public Safety
Generation:
(3) 600 kW natural gas micro-turbines
Bridgeport
City Hall
Cost:
Project Cost: $6M
Cost per kW: $3,333
The United Illuminating
Company
Results of DEEP RFP Phase Evaluation
Woodbridge Town Campus
Bridgeport City Hall
Fairfield Public Safety
The United Illuminating
Company
Questions…
Microgrid Plenary Session
• Tom Reddoch – Facilitator
• Jim Mader, United Illuminating
• Mike Rowand, Duke
• Tom Brill, SDG&E
• Rick Smith, Ameren
• Panel of Speakers and All
© 2013 Electric Power Research Institute, Inc. All rights reserved.
21
Microgrids and the Utility:
Risks and Opportunities
Microgrids are . . .
Multiple distributed resources controlled as a single
entity with respect to the grid
But they can be more than that…
A fundamental shift in the way that the electric grid is
built, operated, and financed.
A Threat or Opportunity to utilities depending upon
how the transition occurs
23
Microgrids can help or hurt today’s utility
Value/Opportunity
Cost/Risk
• Absorb renewable
• Revenue reduction
intermittency at the source
(demand and kWh)
• Avoided cost benefit
• Low-cost ancillary
services
• Demand response
• More resilient grid
• New value-add service
from utility (growth
opportunity)
• Negative power system
impacts
• Utility customer
disintermediation
• Higher cost if we passively
manage DG on the grid
(DERMS)
24
Goals of the distributed resources business model
Desired
outcome
Objectives
Ensure
designs and
operations
are gridfriendly
• Influence the design, location, and operation
of microgrids to maximize operational value
and minimize operational cost to the grid.
First, do
no harm
Provide
incentive to
cooperate
• Provide the ability (information) and incentive
($) for customers to design and operate
distributed generation in a way that benefits
the grid.
• Compensate distributed generation operators
in a way that truly reflects the benefits and
costs to the grid.
Benefit
both
parties
New valueadd growth
opportunity
• Create growth opportunities to provide valueadd services to microgrid owners and
operators.
• Opportunity to own distributed assets.
New
Services
25
Advantages of Utility Integration
• Ability to integrate DG resources into larger grid operations
• Availability of grid operational data needed to optimize
microgrid design and operation with the bulk grid.
• Existing customer relationships, understanding of energy
profile, and access to data
• Core competency of power system design and operation
• Leverage utility’s experience in energy and capacity
markets
Vertical advantages erode as microgrids are developed
without appropriate structures
26
Duke Energy’s utility-integrated microgrid field test
How can a microgrid benefit an individual customer and
the grid?
• Provide resiliency to a critical facility
− Fire station will be able to operate during periods of prolong grid
outages.
• Utilize utility-owned, utility sited assets
− All equipment is owned and operated by Duke Energy. No
alterations behind the customer meter.
• Demonstrate ancillary and grid
stability services:
−
−
−
−
Frequency regulation
Circuit voltage support (VAR dispatch)
Demand response through islanding
Mitigating solar intermittency at the source
27
Site: Fire Station 24, Charlotte, NC
•28
Islandable microgrid schematic
SS
McAlpine Crk.
Retail
Ckt 2414
24 kV
120/208 V
Fire
Station
75 kVA
24 kV
480/277 V
500 kVA
“Islanding
Switch”
Electronic
switch to
disconnect from
grid.
“DG
Switch”
Electronic
switch w/ DG
protective
settings.
Solar
200 kVA
500 kWh
50 kW
•29
Duke Energy – Confidential and Proprietary Information
Key technical proof of concept
What key technical challenges enable a utility-integrated
microgrid to create value?
• Islanding using only inverter-based generation.
Ability of the energy storage inverter to adequately regulate voltage and
frequency when islanded.
• “Seamless” transition to and from islanding
Ability for 24 kV switchgear to operate in close coordination with energy
storage inverter and control system.
• Provide utility-dispatched services to the grid when
grid-connected.
Ancillary services and other grid-tied capabilities
• Endurance while islanded (resiliency)
• Ability to adhere to utility anti-islanding
requirements
Battery inverter must rapidly shift from current-source mode to voltagesource mode.
30
Microgrid components
31
Project status
1. Initial site and vendor selection - complete
• Selected Fire Station 24 as good test site
• Completed RFP; microgrid development partner selected
2. Baseline equipment testing - underway
• Focused on the battery inverter’s ability to rapidly transition from Sc to
Sv and maintain stable voltage and frequency while islanded.
• Two stages:
− Grid tied, no load – underway
− Islanded, with load bank
3. Microgrid design
• Equipment coordination, steady-state and fault analysis, control
system design
• Will be conducted jointly between Duke Energy and Partner.
4. Installation, integration and testing
32
Microgrid Plenary Session
• Tom Reddoch – Facilitator
• Jim Mader, United Illuminating
• Mike Rowand, Duke
• Tom Brill, SDG&E
• Rick Smith, Ameren
• Panel of Speakers and All
© 2013 Electric Power Research Institute, Inc. All rights reserved.
34
Creating A Utility Business Model
to Support Innovation and
Technology Advancements in
Distributed Energy Resources
Including Microgrids
Tom Brill
Special Counsel, and Director of Strategic Projects
In the Future,
Energy Consumers Will Have Many Choices
Imagine being transported 10 years into the future. You
are moving into a new home and call for utility service.
You are surprised at the choices that are available:
•
•
•
•
•
•
•
•
Distributed renewable generation;
Net zero energy construction;
Community solar;
Electric vehicles that allow owners to charge vehicles and
sell storage services to the grid based on prices that optimize
their financial investments;
Green commodity services that are available from the utility
or third parties;
After meter services that automate demand in response to
prices and/or emission levels associated with electricity use
while allowing remote control of devices through the internet;
and,
Customized combinations of the forgoing as well as other
services.
Microgrid solutions to improve power quality, reliability, or
reduce costs
Utilities and regulators have realized that all customers
are different and empowered them in a way that lowered
emissions and was fair to all customers.
How did this happen?
Public Policy:
California Has Initiated Initiatives to Reduce Emissions,
Promote Innovation and Empower Customers
•
AB32 (state GHG emissions at 1990 levels by 2020)
•
RPS (33% by 2020)
•
CSI
•
Net Energy Metering
•
SB32 (Feed-in Tariffs)
•
Low Carbon Fuel Standard
•
SB17
What changes are required in the energy industry to make
this transition achievable in the long term?
Technology:
New Technologies are Increasing
Options for Utilities and Customers
Customers and utilities have growing opportunities to
leverage a number of behind the meter technologies:
•
Distributed generation
•
•
•
•
Energy storage
•
•
•
•
•
Reduced bills
Increase reliability
Provide capacity services
Energy arbitrage
After-meter services
•
•
Solar
Wind
Fuel Cells
Demand automation
Microgrid solutions
•
•
•
Power quality
Reliability
Cost effective alternative to grid expansion?
Microgrid Technology Also
Creates Opportunities for Utilities
• Support the integration of renewable
resources
• Improve reliability and power quality
• Support emergency operations
• Ability to “ride through” outages
• Optimize energy usage
• Enable participation in new markets
for demand response and ancillary
services
39
Borrego Springs Microgrid
Demonstration Project
Utilize advanced technologies to integrate and manage distributed resources within the Smart Grid
Budget:
$8.0M DOE and $2.8M CEC plus matching funds from SDG&E and partners
Benefits:
 Integrate and leverage various generation and storage configurations
 Reduce the peak load of feeders and enhance system reliability
 Enable customers to become more active participants in managing their energy use
Distributed Energy
Resources
Substation
Energy
Storage
Customer
Energy
Management
Microgrid
Controller
Feeder
Automation
System
Technology
Home
Energy
Storage
Community
Energy
Storage
40
How Should the Role of Public
Utilities Evolve to Promote New Innovation?
Role of utilities
• How can utilities leverage microgrid technologies to improve
reliability, power quality and/or to reduce costs?
•
•
•
•
•
•
Integration of renewable resources
Improved reliability and power quality
Support emergency operations
Ability to “ride through” outages
Optimize energy usage
Enable participation in new markets for demand response and
ancillary services
• What utility rate design is necessary to promote technological
innovation in distributed technologies, ranging from
Distributed Generation to a full microgrid solution?
Case Study – Distributed Solar Generation
Developing a Rate Design for the Future
• Rates are intended to recover the cost of utility investments from customers
based on the services customers receive from their utility
• The rapidly growing number of customers with Distributed Generation such as
solar use the grid in new ways
• The services they need and receive from their utility on an unbundled basis are also
new (standby, reliability, storage and power quality)
• They also can create unique grid benefits depending on location
• In order to allow for long-term growth in the distributed solar market and other
new technologies, it is necessary to update utility rate design
• Rates must provide accurate unbundled price signals for the services utilities actually
provide customers and for the benefits customers with new technologies create for
the grid
• Otherwise, customers that cannot afford new technologies will have to pay for the services
provided to customers with new technologies and owners of new technologies may or may
not be compensated for the system benefits they create
• This impact is exacerbated by AB1X
• Accurate price signals will maximize economic efficiency in long-term planning to
meet the future energy needs of California
• To the extent DG subsidies are necessary, they should be clear and transparent
rather than being hidden in the intricacies of utility rate design
Case Study – Distributed Solar Generation
The Need for Accurate Price Signals
• SDG&E’s rates recover costs incurred to
provide four general categories of services:
• Customer Costs – SDG&E incurs these costs on
a fixed basis for each interconnected customer
whether or not the customer uses electricity
• Distribution Demand Costs – SDG&E incurs
these on a fixed cost basis to the extent
necessary to meet the combined noncoincident (maximum) demand of customers
served off of a circuit
• System Capacity/Transmission Costs – SDG&E
incurs these on a fixed basis based upon the
peak demand of the system
• Commodity Costs – SDG&E generally incurs
these on a variable cost basis and the cost
depends on the time of delivery
4%
Electric commodity Variable
5%
Electric commodity Fixed
19%
Distribution Customer
27%
Transmission
19%
12%
Distribution Demand
Public Purpose
Programs
14%
Other
• With accurate price signals, these costs
would be recovered from customers on the
same basis as they are incurred
43
Customer/Behind-The-Meter Energy Storage
Case Study – Residential Distributed Solar Generation
The Lack of Accurate Price Signals Can Create
Significant but Hidden Cross Subsidies
NEM customers are compensated up to $0.37
per kWh for energy, which is significantly
higher than its actual value
•
•
•
Fixed costs that SDG&E
must now recover from
other customers even
though this
infrastructure continues
to be used to provide
services to NEM
customers
•
Currently Tier 3 & 4 rates
average ~35¢/kWh
Avoided cost of energy is
~5¢/kWh.
NEM customers avoid paying
the remaining costs of grid
support, capacity, public
programs, etc.
Remaining costs not avoided
by self generation are shifted
to remaining customers
Avoided cost = Actual
value of energy
44
Case Study – Distributed Solar Generation
The Impact of NEM Growth without
Accurate Price Signals Would Be Substantial
Non-Solar Tier 3 & 4 Customers Avg.
Cost
(2012 Cost Basis - $/Year)
$MM
• It takes several years to
implement a change in
rates for regulated
utilities
• Unnecessary delays
would be costly
• Subsidies paid by nonNEM customers have
increased by 1/3, just
over the past year
(Cost Shift)
NEM Adoption Level (%)
Rate design distortions magnify the impact of cost re-allocation on upper tier
customers
Case Study – Distributed Solar Generation
Peak Demand Compared to Solar Production
2010 Peak Day
kW
Class loads & Solar Gen
System Load
2,000,000
5,000,000
1,800,000
4,500,000
1,600,000
4,000,000
1,400,000
3,500,000
1,200,000
3,000,000
1,000,000
2,500,000
800,000
2,000,000
600,000
1,500,000
400,000
1,000,000
200,000
500,000
0
1
2
3
4
Solar Generation - Sep
5
6
7
Res
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Medium C&I
Large C&I
Small Com
System Load
The Utility of the Future, if We Create the
Foundation Necessary to Achieve it
• An I-Phone creates a platform for
customization
•
•
Third parties develop apps that target
services that customer’s value
Customers love the I-Phone because it
allows them to customize their phone and
their phone service
• The utility grid will do the same thing:
•
•
•
•
•
•
•
Some customers may want DG
Some may want an EV
Some may want distributed storage
Some may want to sell services to the grid
Some may want community solar
Others may want a green tariff from their
utility, service from an ESP, or customary
utility procurement service
SDG&E will create a utility platform that
allows electricity customers to customize
their electricity service
Microgrid Plenary Session
• Tom Reddoch – Facilitator
• Jim Mader, United Illuminating
• Mike Rowand, Duke
• Tom Brill, SDG&E
• Rick Smith, Ameren
• Panel of Speakers and All
© 2013 Electric Power Research Institute, Inc. All rights reserved.
48
Microgrid Research Needs
EPRI PDU Plenary Discussion Panel
September 9, 2013
Rick Smith
Director, Research & Development
rsmith3@ameren.com
Topics
•
•
•
•
Intro
Key Business Questions
Key Technical Questions
Microgrid Research Needs
50
Intro
•
Avalanche of hype
• Journals, magazines and newsletters
related to emergence of microgrids
•
But, microgrids are not new
• What’s different now?
•
Technology is changing
•
•
Emerging microgrid technology
provides an architecture or platform
for the future
•
•
•
With or without utilities
Component technologies improving
Some degree of utility customer “pull”
and policy “push”
How should the utility industry
respond?
51
Microgrids – Key Business Questions
•
•
•
•
•
•
Will technologies continue to improve and
will costs decline enough?
What will be the pace of technological
change and timing of market development?
Can investor owned utilities earn a return
on investing in “community power” systems?
How should we think about breaking “the
grid” into smaller operating segments? (to
what a extent a “grid of grids”?)
Will microgrids be a good platform for
deploying greater amounts of cleaner,
generation in the future?
Will utility customers choose to take
advantage of emerging technologies?
In the long run, will customers be willing to pay for grid improvements and
migration to a more interactive, cleaner operation based on microgrids?
52
Microgrids – Key Technical Questions
•
What are the critical parameters and their
range of values for reliable and cost effective
microgrid operations?
• Optimum scale – MVA?
• Automated – trustworthy and cyber-secure
• Optimum mix of generation, storage and
load?
• Low inertia generation – will power quality
and stability be problematic?
• Cleaner generation - distributed?
• Can a 9 be added to overall reliability –
even with greater adoption of distributed
renewable generation and storage?
Ameren Illinois’s Technology Application
Center adjacent to University of Illinois at
Urbana-Champaign.
Potential use for “on or off-grid” testing of
smart grid devices, distributed generation,
and data communications with UIUC.
The electric utility industry has the core capabilities to contribute to
microgrid technology development and deployment
53
Microgrids – Key Research Needs
• Develop the underlying theory of microgrid technology
•
•
•
•
•
•
Optimum scale
Balance - load, storage, generation, and advanced automation
Reliability - low inertia generation-load-storage system
Scale-ability
Customer experience
Cost
• Technology improvements - necessary and feasible to
enable broader, economically efficient deployment?
• Technical basis – to optimize utility business models
• Cost – capital and O&M
A techno-economic study of the current and expected future states of
microgrids is needed to provide insights for research directions and
potential investment opportunities for utilities and our customers
54
Microgrid Plenary Session
• Tom Reddoch – Facilitator
• Jim Mader, United Illuminating
• Mike Rowand, Duke
• Tom Brill, SDG&E
• Rick Smith, Ameren
• Panel of Speakers and All
© 2013 Electric Power Research Institute, Inc. All rights reserved.
55
Q&A and Roundtable
• Questions?
© 2013 Electric Power Research Institute, Inc. All rights reserved.
56
Next Steps
• EPRI conducting an internal
study of technical challenges
for microgrids
– Initial study to be completed by
January 2014
– Monitoring longer term technology and economic
trends, and changes in value proposition
– Seeking input from members and other stakeholders!
• Member Webinar: October 17th 2 PM EDT (11 AM PDT)
– To discuss status of on-going research, obtain feedback
and direction for research in 2014
© 2013 Electric Power Research Institute, Inc. All rights reserved.
57
Together…Shaping the Future of Electricity
© 2013 Electric Power Research Institute, Inc. All rights reserved.
58