What Is a Microgrid and How Do You Succeed with One?

Category: Lessons
Posted on October, 24 2017

With weather becoming more extreme and cities growing in population, the consequences of a power outage are much greater — if you’re on the grid, that is.

Many communities are localizing their energy needs, generating it right on site so that if there is a natural disaster, they can stay up and running. One way to do that is by building a microgrid. So, what is a microgrid?

A microgrid is a series of energy assets connected to the larger electrical grid, but can operate independently for the sake of a smaller campus or building. Not only does it offer more local control over power generation, but can integrate with renewable sources like solar, wind, and cogenerated power more efficiently. This is the main connection between microgrid and smart grid technology, which describes utility systems that accept more than one source of power. By incorporating a microgrid into a community, you increase the public grid's flexibiltiy to control and distribute energy services through a variety of renewable and digital means, depending on the customer.

Microgrids offer a promising opportunity for communities seeking to reduce energy costs, limit greenhouse gas emissions and increase resiliency. States seeking to capture these benefits — including MassachusettsNew York and Connecticut — are offering millions of dollars in financial support for microgrid development. For all their benefits and incentives, however, technical, financial and regulatory hurdles must be overcome to successfully execute a microgrid project.

What does it take to see a microgrid project through to completion? What are the pitfalls along the way? The Boston Redevelopment Authority recently released its Boston Community Energy Study, exploring the potential for “Community Energy Solutions” such as microgrids throughout Massachusetts. Here are six key insights from those projects that help ensure microgrid success no matter where it’s being commissioned.

1. Collect Load Data Carefully

Seasonal, monthly, and daily electricity load patterns have significant implications for the size and type of generation technology, which in turn influence financial and energy modeling. The quality of decisions made based on the load data is compounded throughout project, making this a classic case of measure twice, cut once.

Collect hourly data for an entire year on electricity, steam, hot water, and chilled water. Monthly data is not granular enough to show important trends in a property’s usage of each resource.

Quality load data can sometimes be found in unexpected places; it can pay to get creative in your search. The best source of load data may be paper-based plant logs or data from the building management system. Cataloging and entering this data can be time-consuming, but it will pay dividends in the later stages of the project.

2. Plan for Tomorrow, Not Today

As with any major investment, implementing a microgrid is about planning for the future as much as the present. Microgrids should be built for the projected needs of its service area or with the flexibility to adapt to them.

Before investing in a microgrid, conduct a site-wide energy audit to identify potential energy-efficiency measures. The impact of these efficiency measures should be factored into projections of the site’s load profile during the microgrid’s lifetime.

As with the first recommendation, this can help lay the foundation for strong decision-making throughout the project.

3. Pick a Generating Technology That Suits Your Goals

What is a microgrid best at? It can actually serve multiple purposes. The generating technology installed should reflect your priorities. Are you primarily interested in emission reduction, resiliency, or cost minimization?

If resiliency is a priority, the generating technology needs to be dispatchable — that is, capable of adjusting its power output along with threatening weather conditions. The cost of intermittent resources like solar and wind should be levelized to include the energy storage required for dispatch.

Many of the most successful microgrid projects rely on highly efficient combined heat and power (CHP). There are several CHP prime movers — steam turbines, reciprocating engines, gas turbines, fuel cells, microturbines — each appropriate in different application contexts. A critical criterion for choosing the right technology is matching the site’s power-to-heat consumption ratio with the CHP technology’s power-to-heat output ratio (yet another reason quality load data is critical).

Of course, hybrid systems are also a possibility, mixing and matching renewables and conventional generation as necessary. The important lesson is not to be overly prescriptive. Enter the evaluation process with an open mind and choose the technology or technologies that meet your needs.

4. Engage Stakeholders Early and Often

When talking to your other microgrid stakeholders, there is no right answer, but there is a wrong answer — ambiguity. Approach this challenge head on. Define roles clearly and early, learn from experience, and revise as necessary. Building a microgrid can involve a lot of stakeholders — the generator owner, the city or town, electric company, gas company, existing utility customers, regulators, private partners, and the like.

Collectively, these stakeholders must find answers to a series of questions that satisfy all parties involved. That includes divvying up responsibilities such as: Who operates the microgrid? Who owns it? Who is responsible for electric reliability and power quality? How are maintenance and operating costs shared?

5. Plan Proactively for Your Utility Interconnection

Microgrids can operate in island mode, independent of the larger electrical grid. Island mode is critical during major outages because it enables microgrids to offer self-sufficient power supply, adding resiliency. When the system is operating normally, however, the micro- and macrogrids can operate more flexibly when they remain connected.

To connect generation in parallel with the electrical grid, the public utility (or local distribution company) must grant permission. The permitting process can take over a year, so the application process should begin as soon as possible — usually when choosing the generating technology.

6. Incorporate Utility Rate Forecasts into Your Financial and Energy Models

The savings from installing a microgrid depend on the cost of energy displaced by the microgrid. This in turn depends on the when the microgrid is generating. A flat utility rate is usually not detailed enough for the energy and financial models to be produce accurate outputs. Your consultant or engineer should be as skilled in utility rate forecasting as they are in energy systems analysis and project management.
Microgrids require careful planning if they are to deliver on their promise. Following these well-tested lessons can guide you to success in delivering resiliency and reliability to your tenants as soon possible. Learn how Boston’s MATEP medical facility manages a microgrid built on these critical principles.

Learn how Jack Griffin, General Manager at SourceOne, sees communities tackling the challenges in CHP, a critical energy solution behind microgrid technology. Download the case study on the innovative MATEP project here.

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