Navigant Research Blog

For Microgrids, It’s Not All About Size

— August 6, 2014

The University of Texas (UT) at Austin claims to have the largest microgrid in the world, with a peak load of 62 MW of capacity, serving 150 buildings.  The combined heat and power (CHP) plant that serves as the anchor is rated at 135 MW.

Leave it to Texas to make such a claim.  It’s not really accurate, but more importantly, it doesn’t really matter.  Bigger is not necessarily better when it comes to microgrids.

On the one hand, economies of scale tend to reduce cost.  But microgrids turn that assumption on its head, since onsite distributed energy resources (DER) reduce the line losses associated with the centralized power plant model.  I tend to agree with Steve Pullins of Green Energy Corporation, who says that the sweet spot for microgrids that incorporate new state-of-the-art technologies such as solar PV, lithium ion batteries, and CHP is between 2 MW and 40 MW.

Define “Big”

About every 6 months or so, I get an email from Craig Harrison, developer of the Niobrara Data Center Energy Park, asking me, “Am I still the largest microgrid in the world?”  The Niobrara proposal, which has increased in size from 200 MW to 600 MW over time (with both a grid-tied and an off-grid configuration now part of the single project), is still in the conceptual phase (you can see elegant renderings of the project provided by CH2M Hill).  In this case, a unique confluence of natural gas supplies and regulatory quirks (which in essence render the project as its own utility) conspire to set the stage for what will probably be (and remain) the world’s largest microgrid.  It’s only a matter of time.

Navigant Research’s Microgrid Deployment Tracker 2Q14 shows that the largest operating microgrid, if measured by peak demand (and not generation capacity), could be Denmark’s Island of Bornholm, which is interconnected to the Nordic Power Pool.  With peak demand of around 67 MW, the advanced pilot project incorporates plug-in electric vehicles (PEVs) and residential heat pumps, along with wind and CHP.

Like Military Intelligence

The microgrid at UT Austin is impressive, given that its origins date back to 1929 and it can provide 100% of the campus’ energy needs.  But it’s really an old school microgrid since it relies upon one source of electricity and thermal energy.  Robbins Air Force base in Georgia claims to have 163 MW of capacity, but it’s powered by large diesel generators, which are less desirable than CHP.  Much more interesting are microgrids that draw upon multiple distributed generation sources, incorporate advanced energy storage, and can sell energy services back to the utility.  The UT microgrid does none of these things.

In my view, a large microgrid is a contradiction in terms.  It’s much better to create multiple microgrids and then operate them at an enterprise level, creating redundancy via diversity of resources and scale, perhaps even mixing in AC and DC subsystems.  To me, a microgrid such as the Santa Rita Jail, which is only 3.6 MW in size but incorporates solar, wind, fuel cells, battery storage, and a host of state-of-the-art energy efficiency measures, is more interesting than the one in Austin.  When it comes to distributed energy, diversity trumps scale.

 

New Book on Renewables Integration Causes a Stir

— August 5, 2014

Having authored four books on energy topics in a previous life, I know how it feels to wonder if anyone is ever going to read a book once one hands over the draft to the book publisher.

That’s why I am happy to report that a new book authored by Dr. Lawrence Jones, vice president for utility innovation and infrastructure resilience for Alstom Grid Inc., is making waves.  Jones readily admits that his book, Renewable Energy Integration: Practical Management of Variability, Uncertainty and Flexibility in Power Grids, could not have been written a decade ago.

“10 years ago, when one would discuss renewable integration, there were nightmare scenarios by many skeptics.  Stories of how the entire grid was going to collapse due to renewables.  Literally, some people were saying it was going to be doomsday for the grid as we know it,” Jones reflected during a phone interview.

While one might still hear that solar and wind power are next-to-impossible to manage, “you don’t hear that from grid operators today,” Jones said.

Technical Yet Readable

Jones actually dedicated this book to grid operators around the globe, many of which contributed chapters.  “They really are the unsung heroes and heroines,” he said.

This book evolved out of the work Jones did for the U.S. Department of Energy, which surveyed the best practices of 33 grid operators from 18 countries that managed 72% of the world’s installed wind capacity.  Navigant Research drew on this survey in a report I authored in 2012 on smart grid renewables integration.

Jones found 60 volunteers, among them friends and colleagues at utilities and in academia, as well as analysts and consultants, to contribute chapters on topics such as:

  • Multi-dimensional, multi-scale modeling and algorithms for integrating variable energy resources in power networks: challenges and opportunities
  • Intentional islanding of distribution network operation with mini hydrogenation
  • Every moment counts: synchrophasors for distribution networks with variable resources

The Further Details

The book is not for the faint of heart, but you don’t have to be an engineer to understand it, either.  In fact, virtually every section of the book ends with a case study to provide real-world examples of what otherwise might seem to be theoretical or abstract engineering concepts that could make heads spin.

It’s rare that such a technical book would receive such rave reviews from industry leaders affiliated with organizations like the United Nations, the World Business Council on Sustainable Development, and the Center for Strategic & International Studies.  “There is already talk about a second edition, as we had to omit some key themes,” he enthused.  “For example, we never really got into the economics of renewable integration.  In 2 years’ time, we should have much better real world data on integration costs and benefits, for both utility scale and distributed wind and solar plants, and can therefore dive into those nitty-gritty details.”

 

Defining the New Smart Grid: From Nanogrids to Virtual Power Plants

— July 7, 2014

Nanogrids and microgrids are building blocks that, like Legos, can be stacked into modular structures: in this case, distribution networks that tailor energy services to the precise needs of end-users.  This customization of energy services is clearly the wave of the future; but determining where to draw the line between these two business models can be challenging.

In many ways, nanogrids are just small microgrids that typically serve a single load or building.  They thereby represent a less complex way to manage on-site distributed energy resources (DER).  Ideally, microgrids would be able to serve entire communities, but utility regulations often stand in the way.  These same regulations make nanogrids larger business opportunity today than microgrids, despite their smaller size.

The series of storms and extreme weather that have attacked East Coast grids in recent years has sparked interest in community resiliency initiatives.  New York’s Reform the Energy Vision (REV) initiative is designed to explore how multi-stakeholder community microgrids might provide emergency power to end-users ranging from a private gas station to a municipal fire station (and perhaps a community center emergency shelter).  Connecticut has been struggling with this issue of how best to include both public and private sector end-users, bumping up against the long-standing prohibition of transferring power among non-utilities over public rights-of-way.  To date, only one of the 9 projects approved for funding under Connecticut’s DEEP program is actually up and running, at Wesleyan University.

The Virtual Option

The third smart grid business model that can help build resiliency into power grids is described in Navigant Research’s report, Virtual Power Plants.  A virtual power plant (VPP) is a platform that shares many attributes with the microgrid (and the nanogrid).  In North America, the most common resources integrated into VPPs are demand response systems.  Though VPPs cannot guard against power outages at the customer site, they can play a key role in lowering overall demand on the larger utility grid, thereby stretching scarce resources, directing them to mission critical loads.

The lexicon of organizing structures required to handle the increasing complexity of energy supply and demand is growing.  In order to make sense of this brave, new world in energy, Navigant Research has come up with the following chart highlighting key attributes of three different business models.

 Comparing Nanogrids, Microgrids, and VPPS

(Source: Navigant Research)

Regulators clearly need to revisit regulations standing in the way of community microgrids.  It appears that New York is pioneering this debate, allowing it to surpass California’s position as the leading microgrid market in the country in terms of sheer numbers of projects in the works.  Moving downstream again, it is also important to remember that nanogrids help create smart buildings that, in turn, can also be integrated into VPPs.  These combinations are vital to efforts to harness greater value from DER, thereby increasing energy security.

In the end, it’s not nanogrids, or microgrids, or VPPs, but the deployment of all three in flexible and dynamic configurations that is revolutionizing what was once the staid world of top-down, command-and-control monopoly utilities.

 

California Wrestles with Emerging Energy Business Models

— June 18, 2014

When it comes to energy policy, California is schizophrenic (or perhaps dyslexic).

On the one hand, recent energy storage mandates in the form of last year’s AB 2514 have created opportunities to test out how advanced batteries can help mitigate the frequency and voltage issues associated with high penetrations of variable renewable energy.  Utilities such as San Diego Gas & Electric (SDG&E) have suggested that these mandates plant the seeds for new microgrids, building upon the utility’s success with the Borrego Springs project, which SDG&E recently announced will be expanded.

On the other hand, this year’s AB 2145, derided by critics as the “Monopoly Protection Act,” would introduce a major kink in efforts for the San Francisco Bay Area to give local governments the authority to purchase bulk renewable energy to reduce carbon emissions.  The target of the legislation is a policy vehicle – known as community choice aggregation (CCA) – that was pioneered in states such as Ohio and Massachusetts but has fanned the flames of the controversy in California.

Come Together

Fueled by the poor track record of early retail deregulation pilot programs, CCA allows local governments to aggregate their constituents into a community bulk power purchase program in order to achieve higher economies of scale.  Residents can opt out, but the experience in Marin County reveals that 80% of the customer base chose the CCA preferred green energy program (resulting in a net reduction of greenhouse gas emissions of 19%).  Adjacent Sonoma County began serving customers under its CCA program in May, and San Francisco has been considering a similar CCA program for several years.

Fast forward to the present.  AB 2145, sponsored by a former utility executive, has cleared the Assembly and is up for its first vote in the Senate on June 23.  Ironically, Republicans are generally opposed to the measure (even though the status quo implies greater government intervention to reduce carbon emissions), while key support to this measure is being provided by Democrats (who are aligning with utility union workers).  Although Pacific Gas & Electric’s efforts to derail Marin County’s CCA via a statewide ballot measure failed in 2010, the utility is a key force behind the latest measure.  The opponents include local governments as well as Silicon Valley.

Interestingly enough, another bill designed to more directly pave the way for microgrids in California by modifying the so-called “over the fence” rule was killed.  A recent California Public Utilities Commission white paper identified this regulatory policy as one of the key impediments frustrating California’s efforts to become the world’s leading market for microgrids.

 

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