Microgrids introduce issues for utilities

New planning, operational hurdles coming

Published In: Intelligent Utility September / October 2013

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Microgrids are gaining traction among large utility customers, and this is an exciting and fundamental advancement in the evolution toward smart grids. Companies have begun deploying microgrids to improve energy security, reduce energy costs and lower emissions and thanks to technology advancements, their deployments can be practical and economical.

Microgrids do create new issues for power engineers and utility managers who need to evaluate the impact of these systems on utility operations, however. The purpose of this article is to showcase some noteworthy microgrid advancements and highlight key issues utilities must keep in mind as they work with their customers to implement microgrid systems.

Some of the most exciting applications of microgrids are now taking place in the U.S. commercial shipping and ports industries, in response to Environmental Protection Agency (EPA) mandates that these industries stop using diesel fuel to run in-port ship systems and port equipment. Ships and ports, in fact, have developed complementary microgrid strategies to meet these mandates and their strategies are producing important economic, energy security and environmental benefits.

For example, commercial ships are beginning to use land-based electric power while in port to run their shipboard air conditioning, refrigeration and other systems. The ports themselves are converting to electricity to supply their own energy needs and also support ships with electric power. Ports are finding that microgrids can meet these substantial electricity demands, ensure the security of the port’s energy supplies during major storms and outages, and support their sustainability objectives.

Shipping operators are also identifying additional reasons to use microgrids. They’re finding that shipboard microgrids can electrify ship services and motor-driven systems, provide more resilient electric supplies for refrigeration and guest needs, and also deliver excess electric power back to the port.


Other large utility customers throughout the country are also pursuing the energy security, sustainability and economic benefits that microgrids offer to their businesses and local markets.

For example, many hospitals and other large facilities in New York, Connecticut, and New Jersey are now considering installing microgrids. Their interest has grown out of their needs to provide energy continuity and security, which proved very vulnerable to flooding and widespread grid outages during Hurricane Sandy. As they consider back-up power, these businesses are realizing that it is also feasible to use renewable resources for their onsite generation and that they can sell their excess power back to the grid as well.


The U.S. Department of Defense, the world’s largest electricity consumer, is pushing aggressively to deploy microgrids as part of its overall energy independence and energy security strategy. Its efforts are helping spur development of microgrid technologies and business models.

New renewable generation technologies, which have now become practical power supply options, are facilitating the increased interest in microgrids.

Photovoltaics and micro-wind turbines, for example, are technically proven and economically viable today. Also, combined heat and power technologies are more efficient, cleaner, and more reliable and gas prices are low, which encourages use of these systems for microgrid applications.

 
Thermal energy storage now provides a commercially viable and reliable distributed storage option to support microgrids that rely on intermittent renewable resources, such as wind and solar. And battery technologies for large, grid-scale storage deployments are now commercially viable for utility applications. Sodium sulfur batteries, for example, have gained wide use in Japan for substation applications and are undergoing pilot tests by some U.S. utilities deploying distributed generation.

Automated demand response (ADR) is another technology that is helping support the adoption of microgrids. Automated thermostat setbacks, lighting controls and controls that cycle end-use loads during peak periods are already offered in parts of the country. In wholesale, deregulated markets, ADR is becoming a valuable market participant. For facilities that are operating islanded microgrids, ADR will play an essential role in helping manage loads to make most efficient use of the microgrid’s power generation and storage.

While technology advancements are facilitating business and utility microgrid implementations, the integration of distributed generation into a utility system is not a trivial matter and facility and utility experts need to proactively get involved to address emerging issues.

From the facility’s point of view, engineers and planners must evaluate how the costs of microgrid technologies are changing over time and how exposed the facility might become to changing fuel and grid energy costs. If the facility is committed to an energy security strategy, it must consider how much storage will be needed onsite and its dependence on fuel supplies and deliveries. It must also anticipate changes in the power industry and environmental policies.

Utilities may need to be involved in customer implementations depending on the customer’s use of utility assets, how the microgrid interacts with the electricity distribution system, utility regulations, and the customer’s potential need to use utility rights-of-way. Utilities will have to evaluate these opportunities on a case-by-case basis while considering the needs of the microgrid, other customers on the grid and the opportunity to improve grid reliability.


As microgrids come online, utilities will need to pay attention to several operational issues. For example, interconnection standards are evolving and engineers must consider the impacts of these new standards when implementing distributed generation systems. Also, if microgrid penetration is significant, utility operations can be impacted either by reduced demand or by performance considerations, such as the voltage fluctuations caused by photovoltaic operations during changing solar conditions.

Finally, electricity market operators will need to get involved as microgrid demand response programs gain usage. Demand response is a valuable market resource, and the industry will need to consider the impact of these programs on the market and prices.


Ralph Masiello is an IEEE smart grid technical expert and an IEEE Life Fellow. IEEE (or the Institute of Electrical & Electronics Engineers) is the world’s largest professional association for the advancement of technology. Masiello additionally serves on the U.S. Department of Energy’s Electricity Advisory Committee.

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