In the Quest for a More Resilient Grid, Microgrids Offer Solutions

by Rona Cohen

In nine small towns, cities, and universities across Connecticut, an experiment is under way to create a more resilient electricity grid of the future.

Through an $18 million microgrid pilot, the first-ever statewide program of its kind, officials have enlisted a mix of public and private entities to test engineering approaches that will enable their buildings to maintain power during an outage by isolating them from the main electricity grid.

Among the participants are a hospi­tal, a gas station, emergency operations centers, and city halls—purveyors of the types of critical services that repeatedly went dark in large swaths of the state during the prolonged power failures caused by Hurricane Sandy and other massive storms in the last three years.

Microgrids are not new; they have supplied power in developing coun­tries where the local utility is unable to provide reliable service to customers, on university campuses, and increasingly, on military installations. More recently, their ability to keep electricity flowing to designated facilities even when the main grid is down has grabbed the attention of state policymakers who are searching for strategies to fortify their communities against future storm events.

Though definitions vary, microgrids are typically described as small-scale, integrated electricity generation and distribution systems fueled by on-site energy sources that can operate on their own, in “island” mode, inde­pendent of a broader grid. Microgrids can be designed to serve one facility, a large campus, or a few city blocks. One historical example of a microgrid is a navy ship, which runs on its own self-contained power source. In recent times, modern microgrids have incor­porated increasingly smarter controls that can integrate several forms of generation and shift loads depend­ing on need. These advances offer the promise of addressing a range of policy objectives, depending on the demands of a community.

“We think this is breaking through to a new model, a new approach to what the electricity system of the twenty-first century is going to look like,” said Daniel Esty, commissioner of the Connecticut Department of Energy and Environmental Protection, which is overseeing the state’s microgrid pilot.

Microgrids, he said, offer Connect­icut and other states the promise of achieving goals beyond resiliency, such as encouraging cleaner energies, because of their ability to utilize a mix of less-polluting options than tradi­tional diesel backup generation.

A Focus on Combined Heat and Power

Some of the projects in the Connecticut pilot will incorporate combined heat and power (CHP) fueled by natural gas, which can be nearly twice as efficient as a conventional system and release fewer emissions. The systems have on-site electrical genera­tors that capture the waste heat that is a by-product of electricity produc­tion and use it to provide steam or hot water to a facility for heating or cool­ing. CHP systems can be configured to supply uninterrupted heat and cooling to a building, even when the grid goes down.

Example of an Energy Surety Microgrid for military bases. The microgrid favors small generation units with storage near living and working areas, and relies less on big remote power plants. Illustration courtesy of Lisa Sena-Henderson/Sandia National Labs
Example of an Energy Surety Microgrid for military bases. The microgrid favors small generation units with storage near living and working areas, and relies less on big remote power plants. Illustration courtesy of Lisa Sena-Henderson/Sandia National Labs

During Sandy, that ability to “island” proved to be a lifeline for a handful of CHP-powered buildings in New York City that stayed up and running when much of the metropolitan area went dark. At the height of the storm, more than 2 million customers throughout the state lost power. In a post-storm analysis of 24 CHP systems, the New York State Energy Research and Development Authority (NYSERDA) found that at facilities whose CHP unit was designed to operate during a grid outage, not a single system went down, according to a study prepared by ICF International for Oak Ridge National Laboratory in March.

State officials are looking to speed the adoption of CHP systems. Last February, New York Governor Andrew Cuomo announced $20 million in funding to support CHP projects designed to supply continuous power and heat during outages. The announcement followed recommendations from a commission the governor convened last year, which released a report in January calling for an acceleration of microgrid development as a key component of resiliency planning.

“Governor Cuomo has called for making the state’s infrastructure more resilient in the face of extreme weather like we witnessed with Hurricane Sandy. Through the use of combined heat and power technology, building owners can make that happen,” said Francis J. Murray Jr., president and CEO of NYSERDA, in a statement announcing the program.

New Jersey has authorized a $25 million program to promote the use of CHP and fuel cells among any governmental, commercial, institutional, or industrial entity in the state. Officials are also partnering with the U.S. Department of Energy (DOE) and New Jersey Transit to develop an advanced microgrid to power the busy rail hubs in Newark, Hoboken, and Jersey City so they can operate independently if the main grid fails. Among the power sources being considered are CHP and renewables, said Bob Hwang, senior manager at Sandia National Laboratories, which will build the microgrid, during the project’s announcement on August 26.

DOE has for years conducted research and provided seed money to deploy microgrid technologies in universities, school districts, hospitals, businesses, and military bases throughout the country. One of its ongoing collaborators is the California Energy Commission, which has funneled a range of grants to local communities and universities to develop microgrids.

A “Living Laboratory”

Probably one of the best-known and most sophisticated microgrids in the country, if not the world, is operated by the University of California at San Diego (UCSD), where administrators have formed public-private partnerships with federal agencies and utilities to incubate smarter, cleaner technologies. University officials liken the 42-megawatt system to a “living laboratory” whose mission is to promote multiple objectives, including lower energy costs, improved resiliency, and enhanced reliability.

The university’s microgrid dates back to 1960, and over the years it has incorporated an increasingly diverse array of power sources. Two 13.5-megawatt CHP natural gas turbines installed in 2001 use the generators’ waste heat to cool the entire campus. The system includes a 2.8-megawatt fuel cell powered by waste methane from a local wastewater treatment plant, which happens to be the largest commercially available fuel cell in the world, said Byron Washom, director of strategic energy initiatives at UCSD. There is a 4-million-gallon thermal storage system, 1.5 megawatts of photovoltaics that will increase to 2 megawatts by the end of the year, plus 35 kilowatts of solar concentrating photovoltaics. The microgrid generates 92% of the university’s power, and saves the campus $850,000 a month in energy costs. Currently, plans are under way to incorporate 56 electric-vehicle charging stations by the end of 2013.

“In a microgrid there is the opportunity for you to use all the tools in your toolbox; and it is not just generation,” said Washom.

One potential “game-changer,” said Washom, is a new cloud-tracking technology that can improve the variability of solar generation by providing up to 15 minutes advance notice of shifting weather patterns that could impact a photovoltaic system. It records technical details such as the height of clouds and the exact speed and direction of their movements. “It’s like your own eyes in the sky,” said Jan Kleissl, an associate professor of mechanical and aerospace engineering at UCSD.

The technology could have important applications for microgrids on military installations powered by solar energy, said Kleissl. In recent years, the military has looked to incorporate microgrids to enhance security and address a range of modern-day challenges to the commercial electric grid. Currently, two major research efforts within the U.S. Department of Defense are focused on microgrid installations, and are testing out designs to enhance cybersecurity, promote energy efficiency, and integrate renewable energy and storage. Each of the military services has pledged to install 1 gigawatt of solar photovoltaics on its installations by 2025.

Because they are operated by smarter distribution systems, microgrids can optimize the flow of energy, improving the energy efficiency of the facilities they run and potentially reducing energy costs. This is a welcome possibility for the Department of Defense, the largest property owner in the United States, with more than 300,000 buildings covering some 2.3 billion square feet and an annual energy bill of more than $4 billion, notes a recent paper by researchers at the Massachusetts Institute of Technology.

In applications beyond those found in large-scale institutions backed by deep pockets, the cost of operating a microgrid has to be sustainable for it to succeed. “You need to think about economics,” said David Michel, a program manager for California Local Energy Assurance Planning, a project sponsored by the California Energy Commission that is working with 48 cities and counties in areas prone to earthquakes, wildfires, and flooding to ensure that critical services can function during a major disaster. The program is looking at microgrids to power essential buildings in a local community, such as a police department, city hall, or school, that could serve as a shelter. “We don’t want them to invest in a microgrid just for energy resiliency,” said Michel. “How are you going to pay for it? You need your rate of return to come back daily.”

Most of the technologies that are considered suitable for microgrid generation are more expensive per unit of capital than a conventional utility-scale natural gas or coal plant. In Connecticut, officials hope to offer communities a mechanism for financing microgrid investments at very low borrowing rates by leveraging private capital with limited amounts of public money through the state’s Clean Energy Finance and Investment Authority. Governor Dannel Malloy has already requested $30 million for a second round of pilots next year.

Forging a New Model

Beyond the issue of cost, there are a host of regulatory and legal hurdles that must be worked through for microgrids to take off. A 2010 report prepared for NYSERDA by researchers at Columbia University noted that microgrids are not defined as legal entities within existing New York State law governing electric and steam industries. Therefore it is unclear how specific microgrid projects will be treated by state regulators there. The report also pointed out that one of the most common obstacles were laws prohibiting private wires to be strung across public ways.

Then there is the challenge of overcoming resistance from utilities who may perceive microgrids, and distributed generation, as a threat to the traditional business model that relies on huge centralized generation distributed through vast systems of poles and wires. Connecticut officials say they hope to encourage the formation of a new business model, one in which utilities might play a role as managers or even owners of microgrids.

Around the globe, power industry sources warn that distributed generation has already cut into their revenues and marginalized conventional generation. A recent report from PricewaterhouseCoopers found that some 90% of American power and utility companies surveyed predicted that distributed generation would force them to dramatically shift their business models within 20 years. Others forecast that as onsite, decentralized generation makes deeper inroads around the country, microgrids will transform the marketplace for utilities the way the cellular networks have altered the landline telephone market.

“Sandy might have taken five years off the microgrid curve,” said Matthew Fairy, co-founder and president of Emergent Energy Solutions and a former vice president at Pareto Energy, which designs and operates microgrids. “I think the utility grids in 10 or 20 years’ time will be totally different from now. The technology choices are out there.”