Have Your Microgrid Your Way

Sept. 10, 2015
The interest in microgrids is growing, and the Department of Energy and some state governments have begun funding microgrid initiatives. But will regulators allow utilities to own and operate grids on the customer side of the meter, their way?

How would you like your microgrid? Extra reliability with a splash of green? Perhaps an extra helping of low cost with a side order of transactive energy? Maybe all the above? Let’s look at a possible future scenario.

Jana is the energy manager for a medium-sized manufacturing company. She oversees all of her company’s energy purchases and sales, and is responsible for the safe, efficient and reliable operation of the company’s microgrid.

It is 6 a.m. on a weekday morning, and Jana begins the workday in her kitchen eating a light breakfast. While drinking her coffee, she uses her smartphone to sign into her company’s microgrid interface app. This app provides her direct and secure access to critical microgrid data.

Jana first reviews the early morning situation report just issued by the independent system operator (ISO). She notices that the temperature is expected to reach 102 degrees today and knows the resulting electric load will strain the grid. Jana is relieved to see that the ISO is forecasting generation and other energy resources, such as energy storage and demand response (DR), to be adequate enough to cover expected load levels and contingencies. She also notes that the storm threat for the day is less than 5% across the ISO service territory, also good news.

Next she reviews the company’s production page. She sees a note posted by the operations vice president that tells her today’s production run is needed to meet a critical customer order. She makes a mental note that all electric load associated with product production is off-limits for DR curtailment today.

Jana then examines the microgrid equipment status page. All battery banks are good. The solar array is good. Inverters check out. The charging of the company’s electric vehicles will be completed and go offline by 7 a.m. Everything looks ready except one of the four microturbines; number 3 is still unavailable. Jana quickly sends a text message to the microturbine service provider requesting a status update. If the unit can be made available by noon, she would breathe a lot easier.

Lastly, Jana pulls up the microgrid operations profile page. She scans her company’s peak demand forecast, energy storage and DR commitment that she entered into the ISO’s market system the previous day. The ISO has already used these numbers to help generate its daily peak load forecast, determine the stack of energy resources that will be available to meet demand and to set hourly clearing prices.

She next goes to the DR section. Remembering the note from the operations vice president, she removes all production loads from the microgrid’s DR schedule. In doing this, she knows that the microgrid control system will need to use the microturbines to meet the DR call that the ISO will certainly make in the afternoon.

Jana then sends out a group text to all executives and managers at her site notifying them that discretionary loads will likely be turned off and thermostats will be set a few degrees higher in the afternoon. She also makes them aware that the microturbines located near the parking lot would likely be operating between 3 p.m. and 5 p.m.

As she is about to sign off, Jana notices that the micro-turbine service provider just responded to her status inquiry. Number 3 will be operational by 11 a.m. Her day just got a lot better. Now she knows that even if the electric stuff were to hit the fan, her company’s critical production run would be unaffected.

In that worst case, her microgrid would simply disconnect from the grid and supply all power requirements locally. Jana signs off the microgrid interface app, takes one last sip of coffee and heads out the door to begin her commute to work, satisfied that the microgrid is ready to handle any electrical challenge that the day may throw at it.

Is the above scenario remotely realistic? Time and the marketplace will decide. One thing seems certain. The interest in microgrids is growing. The U.S. Department of Energy and some state governments have begun funding microgrid initiatives. San Diego Gas & Electric, Oncor and ComEd are each pursuing serious microgrid projects.

Additionally, a recent Greentech Media report estimated that cumulative microgrid spending in the U.S. will top $3.5 billion between 2015 and 2020, and that capacity levels will hit 2.8 GW by 2020. This would represent a 127% increase over 2015 capacity numbers.

At a time when customers are increasingly dissatisfied with one-size-fits-all utility offerings and are looking for customized energy solutions, microgrids may be the answer. The potential is certainly there and it seems like a natural fit. Utilities have vast experience with grids of all types and have the trained personnel needed to operate and maintain these systems. The key question is will regulators allow utilities to own and operate grids on the customer side of the meter?
Have I got this all wrong? Let me know what role you think microgrids will play in the utility of the future.

About the Author

John H. Baker Jr. | Energy Editor, Transmission & Distribution World

John Baker is a proven utility executive, strategist, engineer and executive consultant. He is the energy editor for Transmission & Distribution World, writing a monthly column entitled “Energy Transitions.” He is also president of Inception Energy Strategies, an executive consultancy serving the utility industry. He has particular expertise in strategic business models, new energy technologies, customer strategies and smart grid. He has given numerous domestic and international presentations on smart grid and other utility of the future topics.

Prior to starting his consulting practice, John served from February to November 2011 as the director of Utility Systems Research at the Pecan Street Project, a research and development organization focused on emerging energy technologies, new utility business models, and customer behavior associated with advanced energy management systems. In that role, he led the development of both a smart grid home research laboratory and a utility-side smart grid research project.

John was the chief strategy officer at Austin Energy from October 2002 to February 2011, creating the organization’s strategic planning function in 2002; helping set its sustainable energy direction; establishing key collaboration agreements with the University of Texas’s Clean Energy Incubator; leading a cross-functional effort that examined solar technologies and related financial structures, resulting in the development of a 30-MW solar plant; and leading the utility’s participation in the development of the Pecan Street Project.

Over the course of his 35-plus-year utility career, he also served as vice president of customer care and marketing, director of system operations and reliability, division manager of distribution system support and manager of distribution engineering.

John earned his BSEE degree from the University of Texas at Austin and his MBA from the University of Dallas.

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