Energy assurance planning: The business case for microgrids


By: SGN Staff


Previously, I asked EnerNex's Erich Gunther to share lessons learned from the pioneering energy assurance planning underway in California. He came by to explain the three tiers of a plan and the key elements to consider.


Once a community starts looking for technologies to implement the plan, they often hit upon microgrids. The problem it's tough to cost justify a robust microgrid just to sit there in case a disaster occurs.


The solution, says EnerNex's Rick Wornat, is to find additional value streams from that microgrid. He explains below. - Jesse Berst


By Rick Wornat


Under the sponsorship of the California Energy Commission (CEC), California has launched a program to assist local governments in developing plans to become more energy resilient.  The California Local Energy Assurance Planning (CaLEAP) program provides funding to local governments to better prepare for and respond to natural disasters or other events that might interrupt electricity and other critical services over extended periods of time. 


As the country has witnessed in recent events (e.g., Hurricane Katrina along the Gulf Coast, Superstorm Sandy in the Northeast), the underlying infrastructure to ensure public health and safety can be vulnerable.  Although we can never be totally protected against disasters, many things can be done to mitigate their impact - especially to assure that basic public services (police departments, fire departments, health care facilities) can maintain effective operations.


A common theme: Microgrids

Energy Assurance Plans vary in scope and emphasis. In those that I have been involved with, microgrids appear as a common theme.  In many municipalities, critical facilities such as police and fire stations, city hall and emergency operations centers, hospitals, and large facilities that might be used as shelters are centrally located. This creates the potential for serving these facilities on a common microgrid circuit.  In the event of a loss of electrical supply on the main distribution network, the microgrid circuit would isolate from the network. Local generation would then provide electrical service on the microgrid circuit until external electrical supply is restored.


Designing a microgrid for this kind of application has many challenges:

·         Selecting the best fuel type(s) for the microgrid generator

·         Proper sizing of the generation to support facilities under emergency conditions

·         Potential hardening of the electrical infrastructure for the microgrid

·         Selecting the systems and controls for proper microgrid operation. 


The biggest challenge of all?

However, one of the biggest challenges is the economics.  The cost of a microgrid is non-trivial. Yet the core benefits (i.e., public health and safety, minimization of economic disruption, and maintaining civil order) are realized when and only when a disaster occurs. Still, the business case for a microgrid of this type can be improved if the investment is viewed not only for emergency power, but also as distributed generation (DG). This DG can be dispatched under  non-emergency conditions to offset high market prices. Or it can generate excess energy/capacity to be sold into the regional market.

Filed Under