Decades of research and pilot projects inform a new EPRI methodology for assessing the viability of microgrids.
Until recently, there has been a lot more discussion about the potential of utility microgrids than their actual development and deployment. The main reason so few microgrids have been built is cost. Indeed, the vast majority of microgrid cost-benefit analyses concluded that the economics of microgrids simply did not pencil out.
In recent years, however, that has begun to change. To understand why, it’s helpful to first be clear about what a microgrid is. EPRI defines microgrids, which are often referred to as community microgrids, this way: A group of interconnected loads and distributed energy resources (DERs) within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid and can connect and disconnect from the grid to operate in both grid-connected and islanded modes.
Simply stated, microgrids are a collection of DERs, like solar and energy storage, that can serve specific loads when the main grid is functioning normally and in the rare instances when there is a grid outage (when its operation is referred to as an islanded mode). With that definition in mind, the economic equation surrounding microgrids becomes clearer. As the costs for solar panels, energy storage, and other DERs that go into a microgrid have declined over the past decade, the cost-benefit analyses that once routinely led to projects being shelved have become increasingly favorable.
In fact, according to market research firm Wood Mackenzie, the U.S. microgrid market reached 10 gigawatts in the third quarter of 2022—seven gigawatts of that total is already in operation, with another three gigawatts in the planning or construction phase. Furthermore, Wood Mackenzie forecasts that the U.S. microgrid market will grow at an average rate of nearly 20 percent through 2027. Beyond declining DER costs, the growth of microgrids is also being driven by concerns over extreme weather and a desire by communities and companies to ensure a reliable supply of electricity in the event of a grid outage.
A Strong Foundation of Microgrid Knowledge
The fact that more microgrid projects are making it past the cost-benefit analysis litmus test means that utilities increasingly need to evaluate how to consider real-world microgrid designs and how to incorporate them into the power grid.
“Microgrids were originally thought of as something that individual customers would pursue because they wanted more autonomy with their electrical service,” said Jackie Baum, an EPRI technical leader focused on microgrids and distributed energy resource management system (DERMS) integration. “Now, because microgrids are making more financial sense at both the customer and utility-scale, utilities are looking at how they need to integrate them into their existing infrastructure and be able to serve customers better. It’s a different kind of conversation than before.”
EPRI has been researching the technical issues of safely and efficiently developing and integrating microgrids for over a decade. Recently, EPRI has worked with member utilities like Puget Sound Energy in Washington State and Duke Energy in North Carolina to develop a guide for utility distribution planners and engineers to review proposed microgrid designs. The result is a resource that outlines the information, processes, and tools utilities need to thoroughly evaluate microgrid designs, including factors like the steady state operation of microgrids as well as grounding, protection, and power quality considerations.
The work builds on years of EPRI research into a wide variety of microgrid issues and lessons learned from demonstration projects with member utilities. In recent years, EPRI released “Understanding Community Microgrids,” a report that provides a technical primer to understand the basic components, configurations, design, and operational considerations for community microgrids. The report provides foundational knowledge about the assets that come together to form a grid-connected microgrid, the drivers of accelerating microgrid development, and a discussion of communication, cybersecurity, and islanding issues that are important to the safe and reliable operation of microgrids.
Another recent paper, “Grid Considerations for Microgrids,” delves into some of the challenges that interconnecting a microgrid to the power system can introduce. In particular, the paper explores protection considerations, operating modes, DER requirements and standards, and some of the unique challenges posed when microgrids transition to and from off-grid operation. Past EPRI research has produced a microgrid cost-benefit analysis framework and an overview of expanding microgrid applications, implementations, and business structures.
Unique Distribution Systems, Unique Microgrids
The need for a tool to guide a rigorous analysis of microgrid designs is pressing because microgrids demand a more nuanced approach than is typical for utility distribution engineers. For instance, it’s important to acknowledge that both distribution systems and microgrids are unique, as are utility business models and processes. “Microgrids are unique because utilities and distribution systems are unique,” Baum said. “Even though each distribution system is unique and utility approaches to planning are unique, there are underlying components and approaches to solving the planning and design problems that can be building blocks for utilities to evaluate microgrids.”
The analysis of microgrids also requires a level of cooperation within utilities that is not typically the norm. For example, traditional distribution planners will focus on addressing issues like voltage fluctuations, power quality, and potential overloading. But they rely on transmission operators to worry about balancing generation and load and managing frequency. “With microgrids, you now have to own all of that,” said Ben York, manager of DER strategic projects at EPRI. “You need to bring new ideas of analysis and controls that you once separated into the realms of the transmission operator and the distribution operator. All of that comes together in doing microgrid analysis.”
EPRI’s research has outlined a practical approach to help distribution and interconnection engineers thoroughly analyze proposed microgrid designs. The purpose of the analysis is familiar to engineers: To ensure the safe and reliable delivery of electricity to all customers. “Customers served by a utility-operated microgrid don’t have a choice about whether they receive electricity from the microgrid or not,” Baum said. “Regardless of how the utility decides to serve you or your load, you still expect to get the same utility service. Not only do engineers need to make sure microgrids run and operate, but they also must do so with quality such that individual customers won’t notice there has been a change.”
This means engineers must utilize unfamiliar tools and processes to model and simulate the behavior and impacts of the more dynamic and diverse set of assets that make up a microgrid than they rely on when analyzing the existing grid. For example, one of the main drivers of microgrid development is a resilience solution, particularly in rural areas where other options are expensive.
To bolster reliability, however, microgrids can be designed to transition from grid-connected to islanded operation without disruption. Proper microgrid analysis must consider the goals it is trying to achieve and whether the design is adequate to meet them. “On the reliability front, you need to understand how long the microgrid needs to island,” Baum said. “Who are the customers being impacted by these outages that the microgrid servers? The answers have ripple effects on the controller design and the type of equipment that should be integrated into the microgrid design. It’s essential to define what your goal is with the microgrid.”
Factors That All Microgrid Viability Analysis Should Include
For example, the report, completed in conjunction with Puget Sound Energy as part of an analysis of two of the utility’s proposed microgrids, covers four crucial areas that need to be part of any microgrid design analysis. They are:
- The data, tools, and skills interconnection engineers need when considering microgrids.
- The analytical processes and steps that need to be part of an interconnection evaluation.
- Gaps, design errors, and potential pitfalls engineers need to be aware of when considering a microgrid design.
- Evaluation criteria to use to verify a microgrid’s successful operation.
While acknowledging the reality that all distribution systems and microgrids are unique, the report spells out the essential areas of analysis to fully vet microgrid designs. “There are underlying components and approaches to solving the planning and design problems,” York said. “We can take those pieces and give them out as building blocks for the utility to take away. You still must have your own model of the distribution system and understand the characteristics of the devices in the microgrid. But we can give you the 1-2-3 steps and tell you why you should run this study and how you can use the information to prevent problems from happening.”
To be more specific, the EPRI-recommended microgrid design review includes five distinct analyses: Steady state analysis; transient and stability analysis; grounding analysis; protection analysis; and power quality analysis. As just one example of the topics the review includes, consider the steps that are part of the steady state analysis :
- Power adequacy assessment to determine if the generation sources in the microgrid can serve the expected load.
- Voltage regulation analysis to gauge the microgrid’s ability to maintain steady state voltage within industry standards during islanded operations.
- Evaluation to ensure microgrid equipment doesn’t exceed thermal limits, especially during islanded operations.
- Verification that the worst-case load balance doesn’t exceed the capabilities of the microgrid’s primary generation source or that the worst-case voltage imbalance doesn’t exceed the sensitivities of critical customers.
In addition to its efforts to standardize design analysis, EPRI is also pursuing research to standardize the behavior of microgrid components. “If you think about grid-forming inverters and microgrid controllers and some of the protection equipment, we want to get a consistent understanding of what equipment needs to be capable of,” Baum said. “That will go a long way towards making design reviews more repeatable.”
Currently, a challenge for consistent and repeatable microgrid design analysis is that the behavior of inverters, energy storage, and other components in a microgrid varies depending on the manufacturer. “This is different from the old school power plant where you can more or less say that a gas turbine is a gas turbine is a gas turbine,” York said. “It’s a lot more consistent when the behavior isn’t software-based.”
A Utility Microgrid Pioneer
As Grid Modernization Strategist at Puget Sound Energy, it should come as no surprise that Joseph Do views microgrids as a potentially powerful tool to both drive decarbonization and enhance grid resilience. For instance, Do views microgrids that feature energy storage as a potentially effective solution to provide cost-effective resilience and reliability. Puget Sound Energy has already deployed or begun developing several community microgrids that include battery storage.
“For the microgrid projects we have been involved with, battery energy storage technology has been a common theme. It has an elastic effect on the grid, where at different times of the day, you have a lot of production from solar,” Do said. “You can soak that up with the battery and then release that energy back when your solar is not as prevalent, but you’re having a lot of customer loads coming on, especially bigger loads like EV chargers.”
While Do spends a lot of time developing and implementing individual microgrid projects, he also seeks to educate his colleagues about microgrids and how they can help Puget Sound Energy better serve its customers. “My goal is to influence the company to embrace these technologies and utilize them to maintain the energy delivery system without having to overbuild infrastructure,” Do said. A big part of microgrid education is explaining that microgrids aren’t only designed to operate independently of the grid.
“I’m trying to change many people’s perspectives within my company by saying there are grid-connected benefits. For example, maybe you optimize the efficiency of a microgrid where you can take all the demand and make it net zero,” Do said. “I approach it as an engineer where the microgrid is an asset we can leverage and utilize so that we don’t have to spin generators as hard or ramp up another generator. If we are able to lean into distributed energy resources as part of our energy portfolio, this can greatly change the way we think about renewable energy.”
Do and his grid modernization colleagues at Puget Sound Energy worked with EPRI to complete viability analyses of two proposed microgrid designs: The Tenino and Bucoda community microgrids, which are both meant to enhance reliability in a small, rural Washington State community. The Tenino microgrid design combines a 150-kilowatt solar photovoltaic (PV) system with a 1 megawatt/2 megawatt-hour lithium-ion battery, while the Bucoda design only features energy storage.
For Do, one of the most significant benefits of collaborating with EPRI to perform the viability analysis was EPRI’s comprehensive approach, which considers everything from power quality to islanding to grounding. “That allows us to be able to look at our system and see what other upgrades we need to make to our infrastructure to ensure that when we need to black start the microgrid for resiliency, it’s not going to fail,” Do said. “Or, during normal operations, how we best protect the system from the microgrid to keep our grid and customers safe.”
Because energy storage is such an important component of the microgrids Puget Sound Energy is developing, Do says it has also been helpful to the utility to leverage EPRI’s energy storage modeling capabilities and technology expertise. “Battery energy storage systems are very sophisticated pieces of equipment, and working with EPRI has informed us to be able to go out and deal with energy storage manufacturers to indicate what we are looking for and find the right vendor that can help integrate their equipment into our grid,” Do said. “EPRI has really helped us navigate this very ambiguous area.”
The standardized microgrid analysis process provides Puget Sound Energy with a repeatable process to follow as it increases the number of microgrids it develops and deploys. “We wanted to be able to drive that ourselves and build that experience and that knowledge internally,” Do said. “And we also wanted to start figuring out what it looks like for microgrid ownership internally, like which groups will own what equipment, how are we going to make sure that it’s going to be smoothly operating.”
This is precisely the goal EPRI has in developing tools utilities can use to analyze potential microgrid designs. With a standardized analysis approach, the total number of microgrids being developed and deployed can increase and deliver benefits to utilities, their customers, and the grid more rapidly. “The goal was never for us to sit on this information,” Baum said. “It has always been the goal to share this with the industry so that it becomes the model the rest of the industry can build from to get better outcomes across the board.”
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