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Novel Microgrid Architectures Face Regulatory Hurdles – Even in New York and California

Peter Asmus — June 4, 2015

If I had to pick two states that are leading the charge on reinventing electric utilities, they would be New York and California. Yet, even in these state laboratories of regulatory reform, novel forms of distribution networks (often referred to as microgrids) that rely upon the inherent advantages of direct current (DC) are facing obstacles.

The core challenge facing DC distribution networks lies with the need for standards and open grid architectures that can help integrate the increasing diversity of resources being plugged into retail power grids. This, among other issues, is the focus of the first major conference sponsored by the Institute of Electrical and Electronics Engineers (IEEE) on DC distribution networks. The conference will take place in Atlanta, Georgia, from June 7 through June 10.

In New York, Pareto Energy of Washington, D.C. obtained preliminary engineering approval from Consolidated Edison (and a $2 million grant from the New York State Energy Research and Development Authority [NYSERDA]) to install its patented GridLink microgrid controller at the 12.8 MW combined heat and power (CHP) plant that serves Kings Plaza Shopping Center on the Brooklyn waterfront.  GridLink converts power from each generation source (including grid power) from alternating current (AC) to DC, collects all the power on a common DC bus, converts that DC power back to AC, and distributes power to any load (including those on the utility grid).  All the while, each power source is electrically isolated. In short, GridLink creates a non-synchronous plug-and-play microgrid.

Although Kings Plaza has never been connected to Consolidated Edison’s grid, it provides electric and thermal energy to the center at costs less than half of equivalent utility services. Under the plan, 8 MW of low-cost power from Kings Plaza’s CHP unit will be exported to the utility grid, which may be utilized to serve nearby low-income communities during a major power outage. Despite these potential benefits, some regulatory snags have delayed the project. Pareto has also filed a petition with the New York Public Service Commission, claiming discrimination against its lower cost option to traditional power delivery infrastructure to meet contingency requirements for reliability within the Consolidated Edison service territory.

The View from the Other Coast

In California, the issues are different, but they also involve DC. One case involves Bosch, which was awarded a California Energy Commission grant of $2.8 million grant to develop a high-penetration solar PV DC microgrid at an American Honda Motor Co. parts distribution center in Southern California. The project is designed to validate the efficiency performance benefits of a patented system allowing it to directly connect DC power flowing from solar PV to LED lighting and DC ventilation systems located within the building, as well as a DC energy storage device. The benefits of DC attached to this project include lower installation and operating costs. In addition, this project is pioneering the application of a DC distribution network within existing building codes in order to boost reliability.

While Bosch observes it has not run into any problems with building codes or other such potential obstacles to its DC building grid business model, it has identified an interesting dilemma. Since state subsidies for both solar PV and energy storage are linked to the size of the inverter interconnecting with the AC grid, it appears DC technologies are being discriminated against, despite the fact they are more efficient and reliable.

In both cases, the status quo is being challenged by new technology revolving around a nonsynchronous microgrid incorporating the advantages of DC.  This is the subject of my next report, Direct Current Distribution Networks, expected to publish later this month.

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