Microgrid Feasibility Studies

Considerations and Lessons Learned

BY: BAHMAN DARYANIAN, PAUL DATKA AND LAVELLE FREEMAN, GE

The electric power industry is constantly evolving to address increasing and dynamic load demand, power production and delivery challenges. This constant evolution means the electrical grid of the future will look drastically different than today’s hierarchical, centralized system. With the growing need for reliable, affordable, efficient and cleaner energy, the power industry must grow and adjust to ensure future needs are met. One approach that is gaining momentum in the electric power industry is the use of microgrids to supply power to a community of customers.

Microgrids are small-scale power grids that can operate independently or in conjunction with the main electrical grid. They bring together diverse engineering disciplines-including transmission and distribution (T&D) planning/engineering, distributed generation siting/sizing, renewable generation integration, energy efficiency and demand response, smart grid/automation, advanced control and communications and energy management systems-to meet some of today’s most prevalent energy challenges. Whether electrifying parts of the world that have never had electricity before, providing reliable power for hospitals and other critical facilities when the grid is down, enabling greater use of renewable generation like wind and solar or providing local communities with greater flexibility in choosing their energy source and how they use that power, microgrid solutions are playing an important role in shaping the utility of the future.

With microgrids continuing to gain acceptance, many utilities and energy providers will find themselves weighing whether the concept is a good fit to meet their needs and address future challenges. To help evaluate the benefits and potential challenges associated with the technology, comprehensive microgrid feasibility studies should be conducted. Well before a full-fledged study is undertaken, numerous considerations should be considered to ensure that the evaluation process starts out in the right direction.

Critical Considerations

Prior to integrating a microgrid, a number of factors should be considered to ensure the right system and approach are used to meet unique application requirements. First, it is important to identify the main justification or objective driving the decision to implement a microgrid. In many instances, increased grid resiliency is the primary goal-providing a redundant power supply for when the main utility grid is down. Other common reasons for implementing microgrids include: increasing power supply reliability for isolated, rural or island communities; reducing power costs and improving reliability at industrial sites; increasing energy security and surety at military bases; and potentially deferring utility transmission and distribution upgrades.

Once the rationale for the microgrid has been identified, other factors that can help shape the implementation process should be considered. Some key questions to ask include: What are the financial benefits? What can be expected in terms of operational improvements? While these may be the questions that first come to mind, they are just the tip of the iceberg of what should be considered prior to a microgrid feasibility study.

By digging a little deeper in preliminary discussions, information, which can be overlooked initially, can provide valuable insights that start a study off in the right direction. For example, consider asking:

“- What local regulations/policies are in place that could help or hinder a microgrid implementation?

“- Are there multiple critical facilities in the immediate area that have a need for uninterrupted power?

“- Would owners of these facilities or the local community or both support the implementation of a microgrid?

“- Are there large thermal loads within the footprint?

“- Are the facilities being considered for the microgrid within a well-defined geographic territory, potentially amenable to being connected through an existing or new electrical network?

“- For resiliency purposes, does the selected location have experience with prolonged outages (due to nature or person-based events)? Is it subject to highly unreliable service?

“- Are there potentially utility or load- serving entities that would support a microgrid study?

Gathering as much pertinent information as possible upfront can help ensure all factors are considered once an actual feasibility study is conducted-a crucial component to a successful study and implementation.

Lessons Learned:

GE has studied microgrid integration feasibility through a variety of U.S. projects that are complete, as well as through many more in the works. While individual microgrid studies can provide various insights specific to the unique application examined, there are common factors that span all feasibility studies that can and should be taken into account when considering a microgrid approach.

The first thing to know is that technical and economic feasibility studies require financial and time commitments. High-level and back-of-the-envelope calculations might help, but cannot provide the breadth of insights that a full-fledged study can-such as ideal microgrid structure and layout, size, costs and potential challenges. These insights can lead to significant cost savings during detailed design and implementation. During its microgrid work, GE has encountered various challenges, determined best practices and learned many invaluable lessons that can help ensure those looking to incorporate microgrids make informed decisions and set themselves up for successful implementation.

Developing an economically sustainable business structure and business model can be complex. Much like any other initiative, return-on-investment (ROI) is a substantial factor in microgrid implementation. ROI doesn’t just have to be a monetary improvement, it could also be in the form of increased availability and flexibility for the broader grid, or any number of other benefits. Following are a few lessons learned that can help ensure positive ROI for microgrid implementations.

When starting to plan for a microgrid implementation, utility support is essential. Collaboration can help ensure a reliable electrical system design and provide mutual benefits. For example, leveraging existing generation and distribution systems could help reduce technical complexities and reduce investment needs. Higher values can be accrued to microgrids if they also help defer utility expenditures on substations or T&D and if they contribute to system reliability and service quality. Microgrid value propositions also can be improved with participation of microgrid assets in utility demand response programs and independent system operator capacity, energy and ancillary markets.

Utilities have several tradeoffs to examine when deciding on the structure of a microgrid and what assets to implement. If the decision is made to include renewable energy into the generation mix, there might be more capital investment required upfront, and with the inclusion of renewable generation, energy storage also should be part of the discussion to firm up the renewable energy availability during larger grid outages. While these aspects are likely to increase the investment needed to implement a microgrid, they also can provide the societal benefit of reduced environmental impact. Other societal benefits that can and should be weighed in decision-making are those associated with improved uptime of critical facilities such as hospitals, emergency shelters, first responder, police, fire, water and sewer services and so on.

Conclusion:

The need for resilient microgrids is increasing and the market is growing. It is possible that a four-fold increase in microgrid implementations will occur over the next five years. One of the primary drivers for this influx includes extreme weather and other natural and man-made disasters that cannot only threaten lives, disable communities and disrupt economic activities, but also damage electric utilities’ generation and T&D infrastructure. The Northeastern United States, for example, has seen several natural disaster in recent years, including the winter storms that blanketed the East Coast, Hurricane Irene and Superstorm Sandy. These resulted in wide-spread system outages that put electricity delivery to critical infrastructure at risk. Couple these weather-related challenges with ongoing policy changes, falling distributed energy resource costs and initiatives like New York Reforming the Energy Vison (REV)-which aims to give consumers more control over their energy use and engage them as producers-and you have a recipe for growth of distributed energy resources and microgrids.

As microgrids continue to gain traction both in the U.S. and around the globe, feasibility studies will remain crucial to the success of future implementations. As additional studies are conducted, the electric power industry will be able to draw from the insights they reveal to make informed decisions to best position utility grids to meet ever-evolving demands and challenges.

More about GE’s recent microgrid feasibility studies is available at https://www.geenergyconsulting.com/insights/microgrids-insights.


Bahman Daryanian
Dr. Bahman Daryanian joined GE Energy Consulting in 2010 as a technical director, focusing on power economics (electricity market modeling, asset valuation and renewable integration studies) and smart power (smart grid, microgrids and demand response). His current responsibilities include managing CanWEA Pan Canadian Wind Integration Study (PCWIS), NYSERDA/National Grid Potsdam Microgrid Feasibility Study, and a number of NY Prize Microgrid Feasibility Studies. Daryanian was a principal team member of the NYSERDA 5-Site feasibility study on microgrids for critical facility resiliency in New York State. His recently completed projects include the PJM Renewable Integration Study (PRIS), a review of best practices for the customer-side of smart grid for China Electric Energy Research Institute (CEPRI), and the recently completed Nova Scotia Renewable Energy Integration Study (NSPI REIS). Daryanian conducted one of the earliest multi-client studies of storage type demand response under real time pricing, jointly supported by NYSERDA, EPRI, Consolidated Edison and NYSEG.

Paul Datka
Paul Datka joined GE Energy Consulting as a principal engineer in 2013. He has participated in and led system and equipment studies for series compensation projects with passive damping filters, both in Scotland and the U.S. He provided engineering support in several series compensation projects, including capacitor bank expertise for Cross Texas Transmission (CTT), Electric Transmission Texas (ETT) and Hydro Quebec. He also designed several projects for the reactive compensation business segment, for such geographically diverse businesses as Enel Power in Brazil, Xcel Energy in Minnesota and Tucson Electric Power (TEP) Co. in Arizona. Prior to joining the Energy Consulting team, Mr. Datka spent 12 years working for GE Digital Energy.

Lavelle Freeman
Lavelle Freeman joined GE Energy Consulting in 2003 as a senior engineer with expertise in distribution planning and engineering, and quickly expanded his scope of responsibilities to include power systems operation, renewables integration and grid modernization. In his current role as Manager of Transmission and Distribution in GE Energy’s Energy Consulting group, he is responsible for directing a broad spectrum of client activities in the teaching and design space, with emphasis on power systems operation and planning, equipment application, renewables impact and systems analysis.

For the past five years he has served as Program Manager for DSTAR (Distribution Systems Testing Application and Research), a consortium of U.S. utilities funding R&D projects of common interest (www.dstar.org). Prior to joining GE, Freeman for ABB Inc. and Matsushita Electric Industrial Ltd.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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