Microgrid Effects and Opportunities for Utilities

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1 Authors: Dave Barr, PE, PMP Director of Federal Projects Burns & McDonnell 9400 Ward Parkway Kansas City, MO Chrissy Carr, PE Project Manager Burns & McDonnell 9400 Ward Parkway Kansas City, MO Eric Putnam, PE, CEM Senior Electrical Engineer Burns & McDonnell 9400 Ward Parkway Kansas City, MO Introduction/Executive Summary Many large utility customers, including military installations, hospital campuses and universities, are considering microgrids to better manage energy usage and enhance power quality and system reliability. In addition to greater energy security, microgrids offer a variety of economic benefits ranging from greater efficiency of operation to the ability to facilitate participation in demand response and interruptible rate programs provided by the local utility. There are many scenarios and environments where a utility can benefit from a customer s implementation of a microgrid. This paper explores the drivers behind microgrids, the benefits to end use customers, and the mutual benefits of microgrids to the utility that provides or supports them. Background While the use of distributed generation, backup power for critical loads, and the ability to selfgenerate power in an island disconnected from the grid is not new, the term microgrid is gaining popularity and focus of government and commercial power users. Microgrids can take many forms, but for the purposes of this white paper a microgrid includes integration and control of multiple local generation and storage assets (diesel generators, combustion turbines, PV arrays, battery systems, etc.) to provide on site generation for local loads in both grid tied and islanded modes of operation. This follows the current DOE definition of a microgrid. The U.S. Department of Energy s official definition of a microgrid is 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 (and can) connect and disconnect from the grid to enable it to operate in both gridconnected or island mode. Drivers for Microgrids By allowing multiple generation assets to provide power for a common load, microgrids greatly increase both the reliability of power and its efficiency of generation. Typically, the greatest beneficiaries of microgrids are customers with large, mission critical facilities or large power consumers in areas prone to frequent and/or prolonged outages (e.g. hurricane zones). Although facilities like these have utilized on site generation in the past, they are starting to migrate towards microgrids due to the many examples of single generators failing during prolonged outages thereby leaving the entire mission in jeopardy. In addition, customers in areas which are experiencing greater stress on the transmission and distribution system (e.g.

2 northeastern U.S.) are beginning to reconsider the scale of their on site power needs and installing microgrids to alleviate concerns of events like the Northeast Blackout. The U.S. Department of Defense has identified reliability on the commercial electrical grid as a significant vulnerability to their mission; particularly in light of growing threats of cyber attacks on critical infrastructure (refer to the Defense Science Board Task Force on DOD Energy Strategy report More Fight Less Fuel, February 2008). This concern was reiterated in an October 2012 speech by Secretary of Defense Leon Panetta. Cyber threats such as Aurora and Stuxnet are real life examples of threats to power control and utility systems. Benefits for End Use Customers Obviously, a customer with a microgrid designed to completely carry their normal day to day loads can easily participate in a demand response program by switching to an islanded mode of operation when market conditions are favorable. Although not explicitly a requirement of microgrids, it is not uncommon for ones with this capability to be provided with the ability to seamlessly transition to and from the local utility. This actually provides both the customer and the utility with a much more desirable alternative paralleled operation of the distributed resources. By operating in parallel, the customer can remove not only its entire load from the utility grid, but it can also provide the full capacity of the distributed generation assets to the utility. Thus, a customer with 2MW of generation serving a peak load of 1.3MW can actually reduce the utility s load by 2MW instead of some value less than 1.3MW. This benefit is further enhanced if the customer also has renewable resources available. In addition, operating in parallel allows the customer to simultaneously participate in other ancillary services such as providing VARs to the utility. This does, however, require the utility to approach microgrids in a more progressive way than they have typically done in the past and allow customers to export power in these situations. If this is done, the combination of utility incentives along with the greater energy security is often sufficient grounds for an end user to install the necessary equipment for a microgrid. As an example of what we see as the ultimate realization of the shared benefits of microgrids, Burns & McDonnell designed and constructed a microgrid for the campus serving the Shands Cancer Hospital at the University of Florida. This project was a partnership between the hospital and the local utility company Gainesville Regional Utilities (GRU). GRU built, operates, and maintains an energy center on the campus which provides all of the utilities (i.e. chilled water, steam, normal and emergency power, and medical gasses) to the campus. In order to provide these utilities as reliably and efficiently as possible, the Energy

3 Center utilizes a microgrid which can supply the entire campus power demands and includes both a combustion turbine generator and a diesel generator. For maximum efficiency, the turbine generator is part of a combined heat and power (CHP) solution which captures waste heat to generate the steam required by the hospital. Since the thermal load can result in an operating condition where the turbine is producing more electricity than is needed by the campus, GRU routinely exports power from this system to their grid for consumption by other customers. In a traditional utility agreement, the hospital would have needed to instead utilize packaged boilers for the excess steam load to prevent exporting power and thus reduced the overall efficiency of the system. Although CHP can be implemented without a microgrid, Shands realized that the community expects hospitals to be fully operational at all times. This perception is even more critical for a hospital like this one which includes a Level 1 Trauma Center. With this in mind, the campus was built as a fully rated microgrid so that the turbine generator could supply all of the power to the campus even with the loss of both redundant utility feeds. Since CHP already required operation in parallel with the utility, a seamless transition to/from islanded operation was an obvious feature to include with this system. Thus, when a significant storm or hurricane is headed towards the hospital, GRU islands the campus without affecting the end customers in any way. This greatly reduces the likelihood of a power outage during the storm since all of the campus distribution is underground and there are no outside influences on the system (e.g. lightning strike on adjacent feeder). Once the storm has passed, the system is then seamlessly reconnected back to the utility grid once it is fully stable. Any outages in the region wide utility system are, thus, fully mitigated for the hospital. One other benefit of this particular microgrid is the ability to load test the emergency generator without either interruption of power to the users or use of a load bank. Typically, hospitals perform their generator load tests by connecting resistive load banks to the generators. These load banks turn the generator s output directly into heat and do no useful work. At the Shands Energy Center, the emergency generator is allowed to parallel to the utility grid so that it can be fully loaded by doing useful work. Not only is this a better test of the generator, but it is also better when viewed from either a financial or environmental perspective. Both Shands and GRU have greatly enjoyed the many benefits of the Energy Center and its associated microgrid. The increased efficiency has direct financial benefits as well as helping the hospital to be one of the few LEED Gold institutions in the country. The increased reliability has had immeasurable benefits which are routinely demonstrated in the storm prone area. The benefits of the teaming approach to supplying power to the campus has led to Shands planning expansion of the campus and the Energy Center and GRU looking for additional customers with whom to implement similar solutions.

4 The Department of Defense (DOD) is actively looking to microgrids as a mitigation strategy to protect critical missions from vulnerabilities to cyber or other adversarial attacks on the nation s power grid. A great deal of the logistics for our fighting forces in other countries is based within the continental United States. Thus, electrical power within the bases on U.S. soil is a critical resource for our military s war fighting capability. The DOD and DOE have developed a three phase technology demonstration known as the Smart Power Infrastructure Demonstration for Energy Reliability and Security (SPIDERS). Under the SPIDERS program, the DOD is demonstrating and testing the effectiveness of utilizing multiple diesel generators in conjunction with photovoltaic (PV) arrays and other energy storage media to operate a stable, medium voltage microgrid upon prolonged loss of utility power. The goals of the program are to increase reliability of backup power systems as well as reduce fuel consumption through more efficient use of backup power systems. One key feature of this program is that it utilizes existing assets whenever possible. Thus, it is not a clean sheet approach to creating microgrids but one that, instead, mimics what the DOD and private industry could do as a lowest cost approach. Phase I of SPIDERS supports mission critical loads at Joint Base Pearl Harbor Hickam (JBPHH) in Hawaii. Military facilities in Hawaii have experienced multi day losses of utility power due to tropical storms, and do not have the luxury of importing power from nearby states. Burns & McDonnell designed, constructed and tested the SPIDERS Phase I microgrid and documented significant enhancements in reliability and security. Prior to SPIDERS, critical loads were individually served by isolated generators which were oversized for the normal load, and thus ran inefficiently. Also, renewable energy assets such as PV arrays were of no value upon loss of utility power. When connected to the microgrid, generators are decoupled from their individual loads allowing a single generator to serve multiple loads and allowing the PV to support the loads. Under operation of the SPIDERS microgrid, critical loads were served continuously during a 3 day simulated power outage and testing indicated that the system served the loads using 30% less diesel fuel by operating fewer generators at more efficient points and by integrating renewables into the power island as shown in the graph on the following page. Benefits Communities have come to rely upon electric utilities to support critical functions such as military installations and hospitals. Severe weather events highlight the potentially devastating impacts of prolonged power outages. Recently, during Hurricane Sandy, a major New York hospital had to evacuate 300 patients after both the utility and backup generators failed. Utilities

5 often bear the brunt of negative public perception and increased regulatory pressure after such incidents, whether justified or not. Both utilities and their customers supporting critical operations benefit from the increased reliability that microgrids provide, particularly in times of disaster. Efficiency of optimum generator operation Efficiency of integrating PV array As existing distribution systems are stressed by aging infrastructure and demand growth, and as a utility s ability to execute capital projects for new generation, transmission and distribution are hampered by regulatory and environmental roadblocks, the additional flexibility in system operations provided by on site generation and microgrids become more attractive. In addition to reducing demand on the electrical grid, microgrids can also help utility operation through the addition of reactive power generation and other frequency and voltage regulation improvements to load balancing and power quality. As Smart Grid distribution automation continues to evolve for the utilities, new technologies will be available to better monitor and control the distribution grid to utilize these benefits. Conclusion There are many drivers for large utility customers to consider implementation of microgrids. Increasing incidents of serious storms causing long term power outages in densely populated areas and new threats such as cyber attacks are highlighting vulnerabilities to critical missions. The growing availability of financial incentives including demand response and grid services make on site power generation more viable. There are many scenarios and regions of the country where both utilities and customers can benefit from a properly implemented and operated microgrid through improved power reliability and more efficient energy generation

6 and consumption. As implementation of smart grid technologies increases in utility distribution networks, there will be even more potential for utilities and customers to optimize distributed energy resources. Utilities should consider development and operation of microgrids for large utility customers as part of their growth strategies. Biographies Dave Barr, PE, PMP, is the director of federal projects for Burns & McDonnell. He has more than 20 years of experience in the design and design build of mission critical facilities and infrastructure, including system design, project management, program management and executive management. He delivers projects and programs for a variety of clients including the U.S. Department of Defense, state port authorities, commercial telecommunications firms, microelectronics and pharmaceutical manufacturers, and heavy industrial clients. Chrissy Carr, PE, is an electrical engineer specializing in the design of telecommunications systems and utility automation. She is project manager in Burns & McDonnell s Telecommunications and Network Engineering Department. She has 23 years of engineering and project management experience, including responsibilities in planning and design of wired and wireless infrastructure for a wide variety of clients in the municipal utilities, investor owned utilities, rural electric cooperatives, industrial companies, and state and federal governments. Eric Putnam, PE, CEM, is an electrical engineer specializing in the design of aviation and hightech facilities. He has 18 years of industry experience, including work with Phase I and Phase II projects for the SPIDERS program. He is the lead electrical engineer for projects including a microgrid evaluation for the Philadelphia Naval Shipyard and the Arsalon Data Center Generator Expansion. He also was responsible for electrical system design for the Shands Cancer Hospital microgrid development.