Billion Dollar Baby

Microgrids-Key Arrival to the New Energy Landscape


By Philip Barton, Schneider Electric

Vulnerable infrastructure, rising demand for resiliency and new distributed energy resources (DERs) are altering the energy landscape. Grid infrastructure has not changed this quickly since the time of Thomas Edison. Thanks to digitization, new technologies and regulatory reform, today’s grid is on a path to be greener, more efficient and more reliable than ever before.

The 1,000-GW U.S. grid is benefiting from many greener and less expensive generation resources. For example, cogeneration, also known as combined heat and power (CHP), provides power and thermal energy to industrial and commercial users. Most CHP plants are in petrochemical, paper and food industries where steam or hot water is needed. Industry analysts point to the growth opportunity in smaller scale CHP, including fuel cells and micro-turbines in the commercial space. Increasingly, data centers and government campuses are taking advantage of all types of CHP. More than 8 percent, or 80 GW, of the U.S. grid is supplied by cogeneration.

In addition, zero-emission renewable energy helps decarbonize the grid. Solar and wind energy use are growing dramatically, with wind generally utility sited and solar photovoltaic (PV) generally customer sited. The adoption of the U.S. Environmental Protection Agency (EPA) Clean Power Plan by various states will help further accelerate de-carbonization. As of 2015, solar represents more than 1 percent of the U.S. grid, an impressive feat in a very short period of time.

The Rise of the Microgrid

While clean, renewable energy sources are quickly changing grid infrastructure, new technologies, such as advanced microgrids, are perhaps the biggest key to ushering in the new energy landscape. Most smart grid technologies focus on more elegantly balancing supply and demand; microgrids are further enabling utilities and end users to add resiliency and efficiency to the mix. “Advanced microgrids” are enabling cost-effective resources, essentially opening the main switches during a grid outage and using an “anchor resource” to allow the DERs to operate in island mode. Advanced implies green inverter based resources, usually with traditional rotating generation. This makes use of campuses’ large investments in solar PV and other resources to enhance microgrids’ efficiency, resiliency and sustainability.

Courtesy of Sandia National Laboratory

These benefits have catalyzed a period of unprecedented microgrid market growth; in the U.S. the microgrid market is projected to reach more than 4.3 GW installed by the end of the decade. This is thought to represent a five-year investment of $6.1 billion. Gradually, these benefits will enable the states utility models to evolve toward a “grid of grids”-with microgrids as the centerpiece.

Grid of grids models are further supported by the convergence of information technology and operations technology (IT/OT). Merging IT and OT breaks down siloes and creates new opportunities for technologies, like advanced microgrids, to enhance the grid’s resiliency and efficiency, while offering utilities a more efficient way to operate and monetize DERs. These DERs are by definition not only more efficient, but also emit much less carbon for a unit of energy produced, making the entire system more sustainable.

For example, IEEE P2030.7 and P2030.8 standards are defining microgrid controllers and mapping out standards to interconnect the advanced distribution management system (ADMS) to distributed nodes and DERs. All of this is fueled by newer robust technologies-not just in DERs, but also protection, control, metering, telemetry and powerful software capable of “state estimation” of large power systems. All of this, taken together, is helping utilities capitalize on the available data to visualize, manage and optimize power systems. This convergence of information technology and operations technology (IT/OT) continues to help utilities work with the demand side of the meter, paving the way for efficient operation and monetization of microgrids and other DERs. Increasingly, utilities are working both with and for the end user sites.

The Evolving Microgrid Landscape

Market growth is seen in all microgrid classifications, types and sizes. Traditional microgrids are installed at most every hospital and data center. In 2014, the market began to differentiate between advanced microgrids and traditional microgrids. Generally, advanced microgrids have inverters connected to solar, fuel cells, micro-turbines or battery energy storage systems. Many argue that a cogeneration facility that can autonomously island and quickly and dynamically remove load-preserving the most critical loads-is also “advanced.” The International District Energy Association (IDEA) agrees.

In a further shift, the lines between emergency and baseload generation are blurring. Local generation, including stand-by generation, is increasingly being assisted by the cleaner CHP and the cleanest renewable energy. These facilities range from industrial plants to commercial buildings or even high-rise, multi-tenant apartment buildings. Cost, emissions and space requirements for many of the new technology DERs like micro-turbines and fuel cells are decreasing. Hence, more microgrid sites combine rooftop PV, natural gas-powered micro-turbines, smart HVAC, electric vehicles and battery energy storage systems. Simply put, technology enables sites to become microgrids that can cost-effectively generate their own power.

In addition to advanced or traditional microgrids, there are different types of campus and utility microgrids. Privately-owned electrical systems, which often serve an enclosed community like a university campus, industrial complex, military base or corporate campus, include their own miniature distribution grid. They can rely on a sub-metering system to bill tenants, but likely still appear as a single flexible load to the utility distribution system operator. This type of microgrid typically is called a campus microgrid.

A utility or community microgrid is simply defined as a section of the utility distribution grid that has been reconfigured as a microgrid. To create the utility microgrid, groups of feeders and distribution substations are meshed into a single controllable entity, containing enough generation to sustain the local loads. They usually can operate both with or without the macro grid. These microgrids generally contain multiple different business entities. Common examples include eco-districts, central energy plants within cities and of course, true islands. Utilities in the northeast and western North America are piloting “non-transmission alternatives” (NTAs,) or “non-wire alternatives” (NWAs.) These projects include multiple sources of generation-customer sited or centralized-on the distribution system. Further, load management is a common ingredient. Large and small, these NWAs exemplify utilities, regulators and end-user sites working together to make energy more efficient, greener and often, more immune to weather disturbances.

In some cases, these utility microgrids can include remote communities, including island communities. Each community can be formed into an island of autonomous grids, thus transforming the existing distribution grid into a set of connected microgrids. The utility microgrid is typically the result of a business partnership between the utility and the microgrid owners. The utility signs a service-level agreement with connected microgrid owners. Each agreement specifies the cost of services required to operate the utility microgrid. This new “rate” can be considered an evolution of interruptible load rates or a demand response aggregation contract.

The ability to power microgrids by renewable energy will significantly contribute to the decarbonization of the current grid. Renewable-powered microgrids can substitute for the historically fossil-fueled load with locally produced clean power without the need for ratepayers to subsidize those renewable sources. In addition, microgrids enhance reliability against severe weather and security against cyberattack on the electrical distribution system. During major outages, restoration will occur through the black-start process with the microgrid’s generated or stored power. Customers, therefore, don’t have to wait for the complete transmission and distribution grid to be back in service.

The opportunity for microgrids in many scenarios has allowed the technology to be the key ingredient to a cleaner, more equitable energy future.

Microgrids and DERs

Grid operator are challenged with high penetration of distributed generation and customers’ expectation for higher service quality. The grid of grids is a necessity for the 21st century, serving as a new architecture of the distribution grid. In the grid of grids, individual microgrids are connected to form a synchronized grid during normal operation and a set of islanded grids during abnormal operation. Microgrids represent the evolution of the present distribution grid, encapsulating the complexity of load/supply balancing and integrating multiple and variable DERs into the grid.

As grid infrastructure becomes more distributed, microgrids become critical to providing the flexibility needed to manage distributed resources effectively and operate them in tandem with the larger grid. Microgrids are an asset in improving the service of distributed resources for both the utility and end users.

To allow microgrids to become more pervasive, there must be more integration of multiple generation sources, creating a unified microgrid system. Dispatchable resources, like energy storage, play a large role in the system as well, securing grid resiliency throughout outages. In addition, modern control systems let operators achieve benefits tailored to their specific needs.

Getting to the Power System of the Future

The grid’s ultimate evolution is coming from flexible distributed power generation. Microgrid implementation is the fastest and most efficient way to reach a high penetration of renewables while delivering safe and reliable electricity.

A microgrid encapsulates the benefits of multiple DERs by physically regrouping them into a newly formed meshed network connected to a distribution substation. With the right regulatory framework, this hierarchical organization will scale to a sustainable grid of grids.

Several distributed energy adaptation initiatives have already started in the U.S. and abroad. It is time, however, to accelerate the concept of DERs so that these resources can be further integrated within microgrids to create an efficient grid of grids and usher in the new energy landscape.

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