To: Honorable Public Utilities Board Submitted by: /s/ Cynthia Whitchurch AGM Engineering & Operations. From: Cynthia Whitchurch Approved by: /s/

Transcription

1 STRATEGIC WORKSHOP MEETING DATE: 02/27/2017 ITEM NO.: A2 To: Honorable Public Utilities Board Submitted by: /s/ Cynthia Whitchurch AGM Engineering & Operations From: Cynthia Whitchurch Approved by: /s/ AGM Engineering & Operations Nicolas Procos General Manager Subject: Navigant Microgrid Preliminary Feasibility Study Report and Presentation RECOMMENDATION For information only, no action is requested. The purpose of this report is to provide the Public Utilities Board (Board) with an overview of Navigant s assessment of the potential for implementation and business value of a microgrid at Alameda Point Site A. BACKGROUND The City of Alameda is currently managing the planning and development of Alameda Point. Alameda Municipal Power (AMP) and the City identified Alameda Point Site A as a possible location to build a microgrid. On September 14, 2016, AMP entered into a Service Provider Agreement with Navigant to provide a microgrid development assessment and preliminary feasibility study. This third-party assessment was needed for AMP and the Board to evaluate stakeholder interests, technology and infrastructure, possible business models, and project costs and benefits related to a microgrid at Site A. DISCUSSION Navigant will review with the Board their findings (Exhibit A) and answer questions. Staff will return to the Board at a future meeting with a plan to address the findings and recommendations made by Navigant. FINANCIAL IMPACT At this time, there is no financial impact. LINKS TO BOARD POLICY AND OBJECTIVES KRA 3: Goal 3.4: System Resiliency Complete Infrastructure for Alameda Point

2 STRATEGIC WORKSHOP MEETING DATE: 02/27/2017 ITEM NO.: A2 EXHIBIT A. Navigant Microgrid Preliminary Feasibility Study Report

3 MICROGRID PRELIMINARY FEASIBILITY STUDY EXECUTIVE SUMMARY ALAMEDA MUNICIPAL POWER FEBRUARY 27, 2016 NAVIGANT REFERENCE NO: / 2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

4 CONTENTS This presentation addresses the following topics: STUDY CHARTER MICROGRID OVERVIEW MICROGRID CASE STUDY SITE A MICROGRID ASSESSMENT RECOMMENDATIONS POSSIBLE FUTURE APPROACH 2 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

5 1. STUDY CHARTER This presentation is a summary of the final Microgrid Preliminary Feasibility Study Report by Navigant Consulting, Inc. (Navigant) completed on behalf of Alameda Municipal Power (AMP) and delivered to the City of Alameda Public Utilities Board (Board). It contains the final results, conclusions, and recommendations from Navigant s analysis. Study Purpose The initial study scope was to provide an independent assessment of the potential for implementation and business value of a microgrid at Alameda Point Site A. This third-party assessment was needed for AMP and the Board to evaluate stakeholder interests, enabled technology and infrastructure, possible business models, and project costs and benefits related to a microgrid at Site A. 3 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

6 2. MICROGRID OVERVIEW While there is no universally accepted microgrid definition, the most commonly cited is from the U.S. Department of Energy s (DOE) Microgrid Exchange Group: A group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode. (Source: DOE Microgrid Exchange Group) 4 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

7 MICROGRID PRELIMINARY FEASIBILITY STUDY EXECUTIVE SUMMARY 2. MICROGRID OVERVIEW Microgrid complexity stems from three key areas: 1. Multitude of relevant stakeholder interests based on varying motivations. 2. Range of technical design components suitable to given utility system, project site. 3. Array of value stream types relative to the technical components selected. Microgrid Value Stream Types Microgrid Stakeholder Motivations Energy Money Services Impacts Relationships (Source: Navigant Consulting) 5 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

8 2. MICROGRID OVERVIEW A microgrid requires advanced technology; however, there is no industry-standard set of technical design components. For this assessment, Navigant leveraged our Microgrid Component Framework to identify technical design components: MICROGRID COMPONENT FRAMEWORK Island TECHNICAL DESIGN COMPONENTS 9. Real time automation controls, distributed controls 8. Circuit breakers supporting islanding 7. Microgrid Management System Distributed Energy Resources Power System Enhancements, Telecommunications Advanced Metering Infrastructure (AMI) 6. Distributed Generation 5. Energy Storage 4. Automated Sectionalization and Restoration (ASR) 3. Substation Automation 2. Communications, SCADA, IT/OT 1. AMI Source: Navigant Consulting 6 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

9 MICROGRID PRELIMINARY FEASIBILITY STUDY EXECUTIVE SUMMARY 3. MICROGRID CASE STUDY CASE STUDY: Portland General Electric (PGE) VALUE PROPOSITION: Electricity supply for minutes in the event of an outage. LESSONS LEARNED: The project was a challenging undertaking, even with the utility investment ($6.5MM) and equipment supplier contributions ($6.8MM) that were matched by US DOE cost-sharing. It also required significant staff time and expertise: Attributes Description Location Salem, Oregon Size 5 MW grid-tied storage; 120kW customer-owned PV PGE Cost $13.3 million (PGE and supplier partners) DOE Cost $13.3 million Total Cost $26.6 million (does not include customer-owned PV) Timeline 4.5 years, fully operational in June 2014 Staffing 8 full-time staff, up to 20 flex staff Assembling a strong, adaptable engineering and project management team makes all the difference. PGE key takeaways We underestimated what it takes to attach a five-megawatt battery to our own system. Lead engineer 7 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

10 4. SITE A MICROGRID ASSESSMENT Interviews and information exchanges with representatives from the City of Alameda, AMP, Public Utilities Board, Site A developer, and NCPA were critical to understanding common interests for a microgrid at Site A. STAKEHOLDER QUESTIONS: What are the relevant stakeholder visions for the energy and economic development future of Site A? Who are the impacted stakeholders and what are their needs, preferences, and levels of understanding related to a microgrid at Site A? What roles do AMP, the City, and the developers play for planning and executing a microgrid at Site A? If Site A was determined infeasible, what other options exist in Alameda for a microgrid? 8 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

11 4. SITE A MICROGRID STAKEHOLDER RESULTS Generally, the stakeholders interviewed were unsure of being able to realize enough significant benefits from a microgrid at Site A. Potential Benefits 1 Alameda could use a microgrid project for resilience and disaster preparedness. 2 Alameda could use a microgrid project as an economic development tool and generate new revenue streams. 3 Site A is a near-term opportunity because the greenfield development is underway. 4 A microgrid project at Site A could accelerate modernizing the utility s systems and workforce. 5 A microgrid project at Site A could be the starting point for an island-wide microgrid in the future. Likely Barriers There is no critical infrastructure at Site A that should be islanded in an emergency. There is no urgent need for microgrid capabilities at Site A, especially residential tenants that do not need specific additional energy services - affordable, reliable, and green power is already marketed and provided by AMP to tenants. Despite early indications, DER was not included in plans for Site A development, which are already advanced in the plan check process. There is extremely limited physical space for on-site generation at Site A. There are operational capacity challenges at AMP staff capabilities and technology that would impact its ability to conduct a microgrid project in the immediate future. Distributed generation and energy storage at scale across the island would take several decades to implement, even if there was enough physical space. 9 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

12 4. SITE A MICROGRID STAKEHOLDER RESULTS More broadly, stakeholder groups were found to converge on the following set of core interests for Alameda s energy future: ALIGNED INTERESTS OPERATIONAL EFFICIENCY MODERN, SAFE, RELIABLE, AFFORDABLE, GREEN POWER NEW REVENUE Enhance AMP s grid, systems, and workforce using technology deployments including smart grid / intelligent network improvements. Attract new businesses and high-tech commercial tenants to Alameda, particularly Alameda Point, with new energy services. Provide modern, safe, reliable, affordable, greener power to Alameda residents. 10 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

13 4. SITE A MICROGRID TECHNICAL RESULTS: SITING SPACE Navigant confirmed that significant Site A space constraints for siting renewable generation (solar PV) create a 1.2 MW to 4.2 MW generation shortfall that very likely prevents full islanding capability for the expected Site A electric load (5-8 MW). Constraints to Solar PV and Battery Storage Siting 1. Unclear whether existing buildings can support solar system weight. 2. All building occupants would need to agree to install solar. 3. Roof architectural impairments likely to impede optimal panel placement. 4. Estimated viable parking lot space (4.2 acres) for solar PV likely high. 5. Incremental costs of parking lot sited solar could be significant. 6. Battery siting requires significant building footprint of ~4,200 square feet. Site A Solar PV Siting Analysis Generation Need: Viable Solar PV: 5.0 to 8.0 MW 3.8 MW Gap: -1.2 to -4.2 MW *Note: Analysis details available in full report. New building rooftops constructed in compliance with Title 24 are the only surfaces known to be viable for PV siting. Determining site energy consumption, actual system sizes, and additional viable siting options requires onsite technical study. Analysis does not include the possibility of installing solar and storage adjacent to Site A. 11 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

14 4. SITE A MICROGRID TECHNICAL RESULTS: COSTS Navigant identified a representative cost range for a 5 MW Site A microgrid from ~ $19 million to ~$62 million. Costs vary significantly due to existing infrastructure retrofits, microgrid configuration, economies of scale, and technology maturity. 4,000 3,500 3,000 Typical Unit Cost Range by Capacity (kw) Highest unit cost Notes: These high-level cost assessments are based upon equipment cost data from Navigant Research, as well as project cost data from real microgrid projects. Example costs are for a 5 MW microgrid with 3.5 MW CHP, 1 MW PV, and 0.5 MW energy storage. Financing costs are not included. Cost ($/kw) 2,500 2,000 1,500 1, Lowest unit cost CHP PV ESS Controller Dev., Eng., Constr. Best Estimate Low High Fixed OpEx (annual) 12 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

15 4. SITE A MICROGRID TECHNICAL RESULTS: COMPONENTS Based on AMP s current system configuration, Navigant also identified the following technical components and design constraints for installing a microgrid at Site A. Included in AMP s 2014 Advanced Utility Technology Plan Microgrid Technical Design Components For Site A Technical Component AMP Status 1 Advanced Metering Infrastructure (AMI) Underway 2 Supervisory Control and Data Acquisition (SCADA) System Partial 3 Substation automation Planned 4 Automated Sectionalization and Restoration (ASR) Planned 5 Distributed generation None 6 Energy storage None 7 Microgrid Management System None 8 Circuit breakers supporting islanding None 9 Real Time Automation Control (RTAC) None Note that these technical components and constraints are specific to a microgrid; they do not impact AMP s demonstrated ability to provide highly reliable power. 13 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

16 MICROGRID PRELIMINARY FEASIBILITY STUDY EXECUTIVE SUMMARY 4. SITE A MICROGRID FINDINGS & CONCLUSION The purpose of this study was to answer the question: What is the potential for implementation and business value of a microgrid at the Alameda Point Site A? The study resulted in the following key findings: STAKEHOLDER The microgrid project should, but does not, offer either social (islanding critical infrastructure) or monetary (value streams from new energy services) benefits. Interviewees were not unified in their interest for a microgrid at Site A. TECHNICAL Site A has physical space limitations for siting renewable (solar PV) distributed generation. The advanced infrastructure, technical expertise, and funding required to develop a microgrid project are not currently in place and would require significant time to develop. Conclusion: Site A characteristics do not align with the typical requirements for a successful microgrid project. Therefore, Navigant concludes that the potential for implementation and business value of a Site A microgrid is low. 14 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

17 5. RECOMMENDATIONS Navigant s recommendations are summarized as the following: 1. Do not proceed with a microgrid at Site A. 2. Do proceed with evaluating other, related investment opportunities in Alameda, particularly on Alameda Point, and include them in an updated version of AMP s 2014 Advanced Utility Technology Plan. 3. Consider forming a future vision to guide a phased AMP technology investment approach going forward. 15 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

18 6. POSSIBLE FUTURE APPROACH Navigant proposes the following definition set for future technology planning, based on the aligned stakeholder interests. Additional detail is provided in the subsequent slides. Utility of the Future Smart Grid Distributed Energy Resources Systems Microgrid Smart City Navigant believes that Alameda has a golden opportunity to develop a Utility of the Future (UOTF) environment incorporating smart grid, distributed energy resources (DER) system, and potentially microgrid investments other than Site A. AMP could also investigate initiating a collaborative Smart City initiative to work with the City government to achieve shared elements of a UOTF environment. 16 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

19 6. POSSIBLE FUTURE APPROACH DEFINITION SET UTILITY OF THE FUTURE The utility of the future will need to remain flexible and proactive. (Source: The Energy Cloud, Navigant, 2016) A utility of the future may, for example, take on a network orchestrator role: the network orchestrator role will capture value by tailoring electricity supply and demand services for a customer, utility, or grid operator (Source: From Grid to Cloud, Navigant and Public Utilities Fortnightly, 2015) This means revamping processes and organizational struc-tures, integrating new technologies, and most important of all, changing their cultural DNA to be customer-centric and to feed the entrepreneurial spirit. (Source: State and Future of the Power Industry, 2016) SMART GRID (Source: Navigant) Digital technology that allows for two-way communication between the utility and its customers, and sensing along distribution and transmission lines. Like the Internet, consists of controls, computers, automation, and new technologies and equipment working together with the electrical grid to respond digitally to quickly changing electric demands. (Source: Smartgrid.gov) 17 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

20 MICROGRID PRELIMINARY FEASIBILITY STUDY EXECUTIVE SUMMARY 6. POSSIBLE FUTURE APPROACH DEFINITION SET DISTRIBUTED ENERGY RESOURCES SYSTEMS MICROGRID SMART CITY Distributed energy resources (DER)* include distributed generation resources, energy efficiency, energy storage, microgrids, electric vehicles, and demand response technologies. A DER management system (DERMS) is a control system that enables optimized control of the grid and DER. (Source: Navigant Research, DER Management Technologies, Q4 2016) *CA Public Utilities Code 769 DER definition limits distributed generation to renewable sourced systems and does not include microgrids, micro turbines, CHP co-generation and other common DER technologies. A group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode. (Source: US DOE) A smart city is characterized as the integration of technology into a strategic approach to sustainability, citizen well-being, and economic development. A smart city approach incorporated policy objectives, smart industries and services (e.g., energy services), and smart infrastructure (e.g., communications). (Source: Navigant Research) 18 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

21 6. POSSIBLE FUTURE APPROACH PHASED SEQUENCE Using Navigant s Microgrid Component Framework, we assessed design components for additional optionality on AMP s already highly reliable system, noting that fewer system components are required for smart grid and DER systems than a microgrid. Together, these investments would form a phased sequential approach. MICROGRID COMPONENT FRAMEWORK Island TECHNICAL DESIGN COMPONENTS 9. Real time automation controls, distributed controls 8. Circuit breakers supporting islanding 7. Microgrid Management System PHASES Source: Navigant Consulting Distributed Energy Resources Power System Enhancements, Telecommunications Advanced Metering Infrastructure (AMI) 6. Distributed Generation 5. Energy Storage 4. Automated Sectionalization and Restoration (ASR) 3. Substation Automation 2. Communications, SCADA, IT/OT 1. AMI SMART GRID DER SYSTEMS MICROGRID 19 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

22 6. POSSIBLE FUTURE APPROACH ALAMEDA S UOTF VISION Considering our proposed definition set and phased approach to technology investments, Navigant offers the following UOTF vision for Alameda: ALAMEDA S UTILITY OF THE FUTURE VISION SMART GRID DER SYSTEMS MICROGRID AMP modernizes its workforce, systems, and grid by investing in advanced smart grid sensing and switching capabilities and managing the data outputs. AMP installs and dispatches renewable distributed generation (including battery storage) controlled by a distributed energy resources management system (DERMS). AMP identifies and installs microgrid controls for an islandable section of Alameda with resilience benefits to support critical loads. 20 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

23 6. POSSIBLE FUTURE APPROACH UOTF TIMELINE Navigant recommends adopting a timeline for the phased approach within the proposed UOTF vision. We note that strategic outsourcing could accelerate timeline. POTENTIAL UOTF TIMELINE YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 UOTF VISION & ROADMAP Refresh Advanced Utility Tech Plan SMART GRID (Phase 1) Technical Components 1, 2, 3, 4 Planning & Pilots SMART CITY INITIATIVE DER SYSTEMS (Phase 2) Technical Components 5, 6 Planning & Pilots MICROGRID (Phase 3) Technical Components 7, 8, 9 21 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

24 6. POSSIBLE FUTURE APPROACH ALAMEDA S UOTF VISION Navigant recommends the following steps for future AMP technology planning: Step 1. UOTF Vision Adopt Alameda s UOTF Vision reflecting aligned stakeholder interests and refreshing AMP s 2014 Advanced Utility Technology Plan. Step 2. UTOF Roadmap Develop an Alameda UOTF Roadmap including phased sequence of multi-year initiatives and investments for implementing UTOF Vision. Step 3. Smart City Initiative Initiate a collaborative City-wide Smart City Initiative to support the UOTF Roadmap through the City s strategic planning process. 22 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

25 SUMMARY Summary of presentation takeaways: Objective: Assess the Site A Microgrid potential for implementation and business value Context: Microgrids are unique, commercially and technically complex systems Key Learning: 5 MW / $26.6MM PGE microgrid deployment required significant time and expertise more than the utility expected Likely Cost Range: $19M - $62M for 5MW - 8MW capacity Potential: Low due to many benefit barriers, siting and design constraints Recommend Instead: (a) evaluate alternative investments; (b) update AUT Plan; and (c) develop vision to guide future phased investments Potential Approach: Pursue Utility of the Future vision and roadmap that also enables a collaborative Smart City Initiative within the city 23 / NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED

26 CONTACTS KEN HORNE Director Burlington (Boston), MA RICK BOLTON Director, New Projects Los Angeles, CA DEREK JONES Associate Director San Francisco, CA SHAWN CHANDLER Associate Director Portland, OR LAURA VOGEL Managing Consultant San Francisco, CA / 2016 NAVIGANT CONSULTING INC. ALL RIGHTS RESERVED