Ameresco’s Jacqueline DeRosa explores the progression of microgrid solutions and innovative technology that has evolved rapidly in the years since Hurricane Sandy rocked the East Coast.
By Jacqueline DeRosa, Vice President – Battery Energy Storage Systems, Ameresco
It has been seven years since Hurricane Sandy caused devastation and an estimated $70 Billion dollars of damage along the Atlantic coast. My mother, living on the Jersey shore and in her late 80s at the time, absolutely could not fathom that she would be without power for nearly three weeks in the modern world. It is now 2019, and we’ve made tremendous advances in technology and methods to ensure the reliability and resiliency of the electric power system, specifically with developing advances in microgrids. However, a common regulatory framework for deploying and financing microgrids continues to be a challenge in the United States. The debate continues around such fundamental issues as: the value of resiliency, safety, ownership scenarios, interconnection requirements, and market rules.
Fortunately, the technology for innovative microgrid solutions has progressed dramatically. Advanced energy storage coupled with new controller technology, for example, is proving to provide diverse applications including voltage support, power quality, peak shaving, and load following. New energy storage solutions offer the potential for the microgrid to provide grid services, including demand response, distribution and transmission deferral, congestion relief, energy arbitrage and ancillary services. With the advent of state targets and incentives around the country, energy storage is quickly becoming cost effective for the microgrid.
Success stories are appearing frequently with positive results being demonstrated throughout the country. For example, the California Energy Commission (CEC) recently displayed the results of its Electric Program Investment Charge (EPIC) demonstration projects which showed successful implementation of (1) low carbon-based microgrid technologies that protect critical facilities from service interruptions by providing reliable power, offering energy and cost savings and environmental benefits and (2) microgrids that manage high amounts (up to 100%) of renewable energy to meet the facility/community load while avoiding adverse grid impacts. Companies such as Ameresco continue to pursue creative value propositions to help clients justify proceeding with new microgrid solutions. A good example of such work exists at the Philadelphia Navy Yard, where installation of a natural gas-fired generator was designed to curtail the top 10% of the property’s peak load. The project was so successful for its original 6-MW design that it was expanded to its present 8-MW capacity within two years of its operation.
While new microgrid technologies are tested, regulatory hurdles continue to bog down the speed of microgrid deployment on a larger scale. The microgrid business model crashes against the long- established electric power industry’s regulatory paradigm that is focused on lengthy public hearings and debate. Thankfully, there is an acknowledgement by several state and territory governments — Hawaii, Calif., Puerto Rico, and the District of Columbia — that these changes need to be addressed in a comprehensive regulatory venue to create more streamlined and up-to-date rules for conducting business, acknowledging the multiple technological advances and new decentralized business models. Ideally, best practices in these states can pave the way to create a more uniform strategy for the rest of the country.
A brief summary of key issues that must be addressed include:
Boundaries – As microgrid models can encompass more than one location, we need to establish new approaches for services that cross public right-of-ways, buildings, or other traditional jurisdictional barriers. Both state and federal jurisdiction often classify any corporation which sells electricity across a public street as a public utility, and ties between buildings that cross a public street.
Interconnection – Rules for interconnection need to be updated to accommodate new microgrid business models and technologies. For example, in today’s paradigm, microgrids and advanced energy storage are required to be studied and interconnected at their maximum output. Instead, new ways to study the microgrid need to be adopted so that the microgrid interconnection is based on its expected normal states of operation.
Safety – Stringent rules apply, for valid reasons, when the concept of islanding from the utility or restoration is contemplated. Safety codes have evolved, however, with new IEEE guidance on the design, operation, and integration of distributed resource island systems within the electric power grid as well as interconnecting distributed resources within secondary distribution networks. These changes need to be recognized and incorporated into the operational requirements.
Standby Charges – These are charges that the microgrid will pay the utility even when their systems are up and running. These charges are often cost prohibitive and directly impact the value proposition of the microgrid. They need to be updated to reflect the load flattening and resiliency benefits, and new ways of doing business. For example, a microgrid should not pay standby charges for load it is capable of shedding internally.
Valuing the Microgrid – The microgrid is providing valuable services to its customers, as well as to the grid and should be compensated for the value of resiliency which is absent in today’s rate designs. A new analytical approach to quantify resiliency needs to be developed. This topic is being explored by NREL and others.
Services for the Larger Grid – type of microgrid – whether a campus or a community — can also provide value to the utility, or the wholesale market. Since this concept crosses state and federal jurisdictions, and collides with the current ways of doing business, we need new rules that put microgrids on a level playing field with other resources.
With the fire season upon us in California, and more super storms looming, our microgrid community — comprised of customers, developers, vendors, utilities and regulators — will need to unite with a common message in these trailblazing stakeholder processes. When the new microgrid proceeding begins in California per SB1339, we must be well-versed in the current rules for rate making, interconnection, and safety standards, so that we can clearly and concisely translate how and why and how they need to be updated for new ways of doing business.
The technology exists to provide reliable, resilient — and, in many cases, cleaner — electric power supply to our communities. New approaches to a smarter, more distributed grid design and operation can significantly reduce the impact of the growing threat of natural disasters or other disruptions to the traditional electric grid. It is our responsibility to determine what rules need to change to make this happen. Sadly, my mother who endured Hurricane Sandy, is no longer with us to witness the evolution of these many advances that could and should mean that others will not have to endure the same hardships brought on by our planet’s increasing climate change challenges. I, along with my colleagues at Ameresco, are proud to move the needle forward to ensure these important issues are addressed to provide a more resilient future.
Join Jacqueline DeRosa of Ameresco and a global network of clean economy leaders at Horizon19 in Boston, September 19-20th, 2019. Join the conversation live on September 19th at 11:45am during Jacqueline’s panel session: Energy Storage Hybrids Grids to Create Value for the Customer. Subscribe to event updates via the Horizon19 Newsletter, Twitter, Facebook, and connect with the hashtag Horizon19Boston.