Microgrids are becoming the transformative technology in today’s energy industry, and are putting many utilities on the defensive. A few utilities want to adopt or coopt the technology, depending on one’s perceptions, creating tensions among utility and industry stakeholders. The latter believe microgrid resources can best be delivered by private companies.
First, a definition: Microgrids are localized grids that can disconnect from the traditional grid to operate autonomously and help mitigate grid disturbances to strengthen grid resilience. According to the Microgrid Resources Coalition, microgrids can play an important role in transforming the nation’s electric grid. By integrating distributed generation, load management and storage in smart networks, microgrids transform passive load into responsive grid resources, providing energy, ancillary services, and demand management.Many communities are considering, researching, or implementing microgrid solutions. The underlying rationale often involves complex business, operational, and economic issues. See our FREE Special Report: Understanding Microgrids. Download it now!
Mark Liston, Vice President, Energy & Sustainability Services at Schneider Electric, says “State funding is driving increasing levels of investment and innovation in distributed energy resources. Inverter-based resources are a major factor—including fuel cells and battery energy storage.”
Liston says, “We are seeing dramatically declining market prices around specific distributed energy assets such as storage, which is increasing adoption and utilization. In addition, the low cost of natural gas offers clients the opportunity to derive greater economic leverage from gas-fired distributed energy resources.”
Several East Coast states, including New York, New Jersey, and Connecticut are investing millions of dollars in microgrids installing the power systems microgrids need, independent of or in cooperation with utilities. This funding should overcome utility inertia and encourage them to back the new controls, software and energy storage microgrids need to grow. The developments on the East Coast are driven by the need to prevent the devastating effects of Hurricane Sandy that left large patches of communities without power when flooding and winds blew down distribution systems.
On the West Coast, however, the well-known microgrids at the Universities of California, San Diego and Irvine, the US Navy installations at Miramar in San Diego and at the Sonoma County administration campus are motivated by high power costs. They overcame recalcitrance with utilities to form working partnerships with them, justified in part to provide demand response. Advancing technology in this region will depend on research being funded by the state at the San Diego and Irvine campuses.
Some entrepreneurial companies that are developing microgrids and the associated innovative services that will drive new markets, including software controls, are profiled below. Additionally, there is information on initiatives in the regulatory arena where microgrids could play a role in providing demand response services and regulation support while stabilizing the utility customer rate base.
States Are Funding Projects
Under its “Reforming the Energy Vision” strategy, the Public Service Commission (PSC) of New York is examining the role of distribution utilities in enabling market-based deployment of distributed energy resources to promote load management and greater system efficiency. Already the PSC has approved Consolidated Edison’s non-traditional solutions to congestion problems in parts of its service territory, one of which includes developing one or more microgrids located at apartment complexes in the Brownsville load area.
In Potsdam, NY, the city is planning an underground microgrid, thanks to $1.2 million awarded by the US Department of Energy to General Electric, and $381,000 for design from the New York State Energy Research and Development Authority (NYSERDA). GE, National Grid, the National Renewal Energy Laboratory, and Clarkson University are developing the microgrid. The region has been particularly susceptible to power outages due to winter storms and flooding.
The power system is intended to supply electricity to Clarkson and the State University of New York at Potsdam, Canton-Potsdam Hospital and National Grid’s Potsdam Service Center. The microgrid would use a variety of power resources to include 3 MW of cogeneration, 2 MW of solar PV, 2 MW of energy storage, and 900 kW of hydropower. Development will take two years.
NYSERDA has awarded six additional contracts to improve power delivery in the state through smart grid technologies. Two relate directly to microgrid development.
The Rochester Institute of Technology received $78,000 to develop controls for microgrids to effectively allow the cooperation between utilities and microgrids. For instance, the NYSERDA statement says, it would take into account all power generated from distributed generation, energy storage, utilities, and other sources without causing any power quality issues to customers.
NYSERDA has awarded $2 million to Consolidated Edison to partner with Pareto Energy and General Electric to investigate the use of Pareto’s Gridlink technology to connect the Kings Plaza Shopping Mall in Brooklyn to Con Edison’s electrical networks to sell excess power into the distribution grid and provide a variety of support services. The mall is already set up to provide refuge during emergencies, and with the connection to the grid, could provide power to gas stations, supermarkets, hotels, or other vital services in the community.
Hoboken, New Jersey plans to build an underground microgrid that may serve up to 55 facilities for a maximum of $48 million. Cost will depend on the final size and architecture. Sandia National Labs is designing the microgrid to be separate from the utility grid, with no interconnection to feed power in either direction. Flooding concerns played a large role in the design, given that Hoboken is prone to flash floods. It suffered mightily during Super storm Sandy in 2012.
In Massachusetts four communities were awarded grants in September 2014 from the Community Clean Energy Resiliency Initiative to build microgrids to provide emergency back-up services and improve energy efficiency, reliability, and resiliency. The awards are just the first round of grants the Initiative will make.
Connecticut, through its Microgrid Pilot Program created under state legislation, has awarded $23 million to nine communities to develop microgrids to withstand catastrophic storms and offer power refuge and critical services when the utility grids are down. One project at Wesleyan University is already operating. Two projects in Milford and Bridgeport were awarded funding in October 2014.
Milford was awarded $2.9 million to partner with Schneider Electric, Green Energy Corp. (headquartered in Eugene, Oregon) and ZHP Systems (headquartered in Wakefield, MA). The three entities will develop a microgrid to service a government center, a middle school, a senior center, senior housing, and city hall. The middle school and senior center will be available as shelters for residents during a power outage. The microgrid will be powered by two 148-kW gas-fired cogeneration units, a 120-kW solar array, and a 100-kW battery storage system.
Bridgeport was awarded $2.2 million to develop a microgrid to provide power to buildings at the University of Bridgeport, including a recreation center, student center, police station and two residence halls. FuelCell Energy will provide a 1.4-MW fuel cell to the buildings, which would provide shelter and dining hall service to 2,700 city residents and emergency service responders.
This project is a companion to another microgrid project in the city funded in the first round of grants to provide power largely for critical city services.