Economic and Sustainability Benefits of Smart Grids and Microgrids

A microgrid is a localized electrical network that allows campuses and other similar-sized districts to generate and store power from various DERs, including renewables such as wind and solar, providing the ability for the end user to function in isolation from the grid. Balancing captive supply and demand resources – including thermal and electrical load – within its defined boundaries, a microgrid system provides resiliency. A microgrid can “island” itself as needed or desired from the larger utility grid, for example during extreme weather events or at times when self-generation is more cost-effective.

With the design of distributed generation on many campuses dating back decades, many of us have experienced microgrids long before the term was coined. However, what has changed is that we are now relying on a smarter interface, making the supply and draw of power to and from the grid more efficient, resilient, flexible, and sustainable.

The purpose of electrical transmissions systems in our country traditionally has been to distribute electricity from large utility-scale generation plants to loads, i.e. consumers. Comparing it to our transportation network of vehicular traffic, the transmission system is the interstate system, while local distribution consists of roads and streets. The safety systems are traffic controls. The variability of contemporary economic growth, population growth, climate change, and both natural and man-made disasters demand the grid to support both large-scale and local generation and distribution. Effectively every lane of the grid superhighway now must go in both directions, subject to instant reassignment and change. Examining the potential of smart electrical transmission systems demonstrates the capability to support the technical, financial, and regulatory requirements for microgrid development.

Experience with microgrid projects has shown the areas essential to successful analysis, planning, and implementation to include: identifying needs and drivers; developing functional requirements; developing system topology and operation; considering technical, regulatory, and financial outlooks; and proper commissioning, start-up, and operation. Campuses, municipalities, and other similarly-sized regional areas choose to develop a microgrid for a variety of reasons, including resiliency, economics, flexibility, sustainability, and reputation. At the beginning of each project, it is important to discuss and determine the drivers behind implementing a microgrid in a specific region.

With the increasing occurrence of such natural disasters as hurricane Harvey and early 2018 when the Northeast saw record winter storms – as well as the potential threat of man-made disaster – institutional leaders and private enterprises are seeking ways to make the electrical grid capable of withstanding these type of events. Resiliency to maintain operations during such crises, and to have greater control throughout, is a driving requirement for microgrid implementation. Mission critical facilities likely to be supported by a microgrid include healthcare, research, financial operations, data centers, or simply places of refuge. A robust and flexible electrical generation and distribution network must allow for these operations to continue functioning 24 hours a day, 7 days a week, for 365 days a year, in order to maintain life or prevent loss of critical data, no matter what the incident or subsequent damage. The system equipment and design must be self-healing and support the recovery efforts to get facilities and campuses back up and running following such tragedies.

Many cities and regions see microgrids as a possibility to create economic growth or better maintain financial stability. As part of microgrid analysis, it is important to evaluate the mix of varying energy strategies, generation sources, and fuel types, and to develop concepts that will provide clean, efficient, economical, highly reliable, and locally controlled power and thermal energy. With this type infrastructure in place, cities and regions can increase the recruitment and development of high technology businesses, research and development centers, data centers, and similar enterprises key to job creation and economic growth. The recent advantageous price of natural gas as well as the streamlining of renewable energy integration is making microgrids more economically feasible to construct and operate, thus increasing their rate of implementation. Microgrid planning must include investigation of potential power purchase agreements and credits that can generate additional revenue or provide more options for campuses and municipalities to buy power to balance a power portfolio and allow a microgrid to maximize its use and timing of resources for greatest efficiency and economy.

Advances in renewable energy integration allow broader deployment of renewable energy sources and storage technologies as part of a microgrid strategy. Proper analysis and inclusion of these in microgrid planning efforts allow campuses and municipalities to meet stated carbon reduction or neutrality goals as well as reduce greenhouse gases resulting from traditional energy generation processes.

The US Department of Energy (DOE) is at the forefront of energy integration research. Designed by Affiliated Engineers, the Energy Systems Integration Facility (ESIF) at the National Renewable Energy Laboratory in Golden, CO, uses a mega-watt scale research electrical distribution bus (REDB) as well as smart hardware-in-the-loop (HIL) prototyping to validate technologies and techniques advancing interconnection of distributed energy systems and the seamless integration of renewable energy technologies into the grid.

ESIF’s primary research areas and laboratory systems focus on the research electrical distribution bus interconnecting “plug and play” testing components, hydrogen research exploring simpler and more scalable energy storage, and fuel cell and cell component development. A safety and data integrity driven SCADA system deploys hardware-independent software to govern the array of function-specific control systems and disseminate real-time data to principal investigators collaborating worldwide. The knowledge gained from this research, as well as other ongoing research and development of new microgrid technologies, inform design professionals of the capabilities of microgrid solutions and the planning and development necessary for their success.

While developing microgrids, initial feasibility analysis of the potential energy sources and distribution systems that may meet the specific needs of a given project should be completed. Basic steps include identification of equipment types, equipment sizes, technical challenges, and basic system approach. Analysis typically includes a simple financial analysis of initial installation costs, potential operational costs savings, and payback durations on investment. The purpose of the initial, often spreadsheet-based analysis is to rule out non-viable options and set the stage for solutions that will be both technically and financially viable to support the intended performance goals for the microgrid.