NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Microgrids: A Growing Trend in the Power Industry

Dr. Brian Hirsch

Senior Project Leader – Alaska

National Renewable Energy Laboratory

USAEE Conference - Anchorage, AK

July 29, 2013

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Microgrids – Alaska Context

• Energy is EXPENSIVE: up to $10/gallon & $1/kWh; highly variable throughout state

• Very limited economies of scale within communities, BUT ~200 communities + remote industrial operations

• Remote, challenging logistics – limited transportation, communication, infrastructure, human and physical capital, etc.

• Heat is not optional, and consumes more primary energy than electricity• Some relative success stories in terms of high penetration wind-diesel

hybrids, e.g., Kokhanok, Kongiganak, Kwigillingok, Kodiak

Icing in Nome

Village of Ugashik Hybrid Performance Monitoring Project

• Working with ACEP at UAF, AEA • Monitoring performance of wind-diesel-battery

hybrid system to determine relative contribution of various RE inputs and diesel savings for system optimization

• Results replicable for other projects in region and beyond

• Very windy site (class 5), but PV performed as well as wind on kWh/kW installed basis, and better on a $/kW installed basis with current pricing

51%

34%

14%

Ugashik Hybrid Power: Wind, Solar, Diesel, Battery

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Microgrids in Broader Context

• What is a microgrid?o “group of interconnected loads and distributed

energy resources that acts as a single controllable entity with respect to the grid. It can operate in both grid-connected and island-mode” [Office of Electricity, DOE Microgrid Workshop Report, 2011 San Diego, CA]

o “Best hope for developing world”, according to UN

• What is energy security? US Navy:o “having assured access to reliable and sustainable supplies of energy and the ability to protect and

deliver sufficient energy to meet operational needs”o 2008 Defense Science Board Task Force on DoD Energy Strategy described vulnerability of the

nation’s electric power grido The number of large blackouts at a national level is growing in number and severity

• Miramar had an eight hour outage in September 2011o Training missions were canceled and planes groundedo Most personnel (both military and civilian) were sent homeo Marines needed to man electric gates, traffic lights and other facilitieso Food spoilage in mess halls and commercial outlets

Source: IEEE 1547.4

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BackgroundMCAS Miramar• Outside San Diego, CA• Primarily flight training and operations• Peak loads are summer afternoons

o 14 MW peak, 7 MW avg, 5 MW min• Track record of successful EE and RE projects• Critical loads are Flight-Line and supporting facilities

o 6 MW max, 3.5 MW avg, 2.5 MW min• Electrical configuration allows for centralized control pointMicrogrid Design Criteria• Operate for at least two weeks• Power critical loads upon loss of utility grid• Incorporate as much renewable energy as feasible• Phased approach to include entire base in the microgrid• Redundant fuel sources important to enhance reliability• Demonstration project for the Marine Corps and DoD

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Summary

• NREL completed NZEI assessment in 12/2010 • MCAS Miramar energy projects to date:

o Numerous energy efficiency projectso 1 MW of solar PV plus solar parking lot and street

lightso Solar thermal pool heatingo 3 MW landfill gas PPAo ESTCP energy storage projecto Currently approximately 50% renewably powered

• Miramar received funding to perform microgrid assessment in 03/2011o NREL worked with Miramar to complete a

conceptual design plan report completed on 09/2012

o Awaiting ECIP funding request for microgrid implementation

NREL’s Approach to Microgrid Design

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• Differentiating Characteristics:– Integrates into 24/7 operations– Can optimize on economics or surety– Focuses on fuel diversity– Expands/contracts to provide energy for all

load coverage spheres– Phased approach can allow for gradual

addition of components over time Load prioritization and migration with added

generation

• Continuously Optimized Reliable Energy (CORE) Microgrids

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CORE Microgrid Design Process

Step 1:Evaluation ofExisting Reports

NZEI Assessment

Existing Energy Management System

ExistingGeneration

Energy Surety Plan

Step 4:Installation and Monitoring

Inform RFP/Cost

Estimating

Selection of Integrator

Independent Verification& Validation

Construction

Step 2:Data Gathering

Grid Infrastructure

GeneratorSpecifications

Load Profiles

GridOperations/Valuing

Energy Security

Step 3:Design Analysis

Communication/Cyber security

Detailed Electrical Model

Modeling &Studies:•Power Flow•Dynamic Stability•Short-Circuit

Financial Analysis

Controls

• CORE Microgrid Design Process is replicableo Currently being applied at the USAFAo Identifies potential solutions for acceptable levels of risk and economic value streams

Modeling Overview

• Modeling is needed because Microgrids present unique design challengeso Self regulation for voltage and frequencyo Advanced controls and protection schemeso Fossil fuel and alternative energy generation resourceso Need to analyze start up sequence

• What do you Model:o Electrical distribution system, generation equipment, loads, and

control system response• Use the model to simulate operating scenarios and predict

performanceo Microgrid start up, feeder loss, faults, different generation options

• Modeling conclusions can be used to inform o Generation type/sizes, supervisory controls, operating procedures

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Modeling Summary and Recommendations

• A minimum of 4 MW of diesel is recommendedo This is needed for adequate load pick-up

• As expected, an all-diesel solution would work• The 4 MW diesel, combined with 2 MW gas may work

o Transient voltage/frequency excursions would be larger, and would likely require subdivision of feeders and/or auxiliary assets for transient support

• It is unlikely that an all-gas solution could work without energy storage and/or load control due to large load steps

• The best solution for cost and performance may be a hybrid system, with PV, diesel, LFG, storage, and natural gaso Optimization needs to be done as part of formal design

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• Capital costs were estimated for a variety of scenarioso Selected design ~$25 Mo Excludes costs associated with cyber security certification

• Revenue streams from peak shaving, demand response, and offsetting grid purchaseso Offsetting grid has most value but has operations and air

permitting challengeso SDG&E demand response program is established revenue

stream and increasing need for the utility

• Operation and maintenance costs still need to be estimatedo Will vary substantially based on selected O&M scenario

• Most scenarios don’t have a positive NPVo Still a better value than a system that can only be used for

backup power (diesel)o Energy security value

Financial Analysis

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Lessons Learned

• CORE microgrid design process identified a workable solution to inform an RFP with performance specifications and verification and validation optionso An acceptable level of risk is needed to determine the appropriate costs for a

given level of increased reliabilityo Continuous operation decisions related to revenue streams impact the design

– Single fuel generators are cheaper and more functional option than dual fuel options

• Microgrid operations decisions are critical and heavily influence designo Operating and maintenance responsibility decisions are complex and may

need to be determined as the project evolves• Cyber security certification will be a challenge• Demonstration microgrid projects are needed at DoD sites:

o Further develop the technology, identify applications, and determine total costs

o Commercially available technologies are out there

Microgrid Market Is Global Phenomenon

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Microgrid Capacity by Region, World Markets: 2Q 2013

(Source: Navigant Research)

North America, 2,473.54

Europe, 508.13

Asia Pacific, 390.24

Rest of World, 393.68

(MW)

Five Primary Market Segments

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Commercial/ Industrial, 439.29

Community/ Utility, 928.80

Institutional/ Campus, 1,028.71

Military, 614.27

Remote Systems, 754.52

(MW)

Microgrid Capacity by Segment, World Markets: 2Q 2013

Source: Navigant Research

Microgrid Capacity Scenarios

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-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2013 2014 2015 2016 2017 2018 2019 2020

(MW

)

Base ScenarioAverage ScenarioAggressive Scenario

Microgrid Capacity by Forecast Scenario, World Markets: 2013-2020

Source: Navigant Research

Microgrid Capacity: North America is Global Leader Now, and Projected 2020

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• Microgrid Capacity, Average Scenario, World Markets: 2013-2020

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2013 2014 2015 2016 2017 2018 2019 2020

(MW

)

North America

Europe

Asia Pacific

Rest of World

Source: Navigant Research

Microgrids, but NOT micro dollars

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• Microgrid Revenue by Forecast Scenario, World Markets: 2013-2020

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

2013 2014 2015 2016 2017 2018 2019 2020

($ M

illio

ns)

Base ScenarioAverage ScenarioAggressive Scenario

Source: Navigant Research

Large Obstacles Remain

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• Policies: No integrated approach, in part because of diversity of applications, resources, settings – No “one size fits all”

• Costs: wholesale power is still cheap; energy storage and niche/small generation is still expensive

• Technology: Advanced controls, smart grid, system integration still evolving

• Value Propositions: All energy is not created equal (surety, reliability, power quality), but is often priced the same

Examples of campus microgrids

• BC-Hydro/British Columbia Institute of Technology (BCIT) microgrid: http://www.bcit.ca/microgrid/

• University California San Diego campus: http://ssi.ucsd.edu/

• Illinois Institute of Technology: http://www.iit.edu/perfect_power/

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Thank You and Questions?

Brian.hirsch@nrel.gov or 907-299-0268