Innovative Microgrids A PE eBook 121916

A Personal Energy eBook

It’s a Microgrid World Now

The Emerging Microgrid Paradigm Shift

By John Cooper PublishedbyPrsenlPress,December2016


©MaaSEnergy,AllRightsReserved,2016

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It’saMicrogridWorldNowTheEmergingMicrogridParadigmShift

Author: John Cooper

Abstract

• AsDER technologiesbecomeevermoreaffordableandcapable, theybecomewellsuitedtoberepurposedascomponentsofhighervaluesystems,tosupporttheshiftfromcost-to-valueembodiedinPersonalEnergy.

• Amicrogrid is a defined technology concept of an islandedsystem – one that canconnectanddisconnectfromthegrid.Asimplifieddefinitionformicrogridsunlocksgreatermarketpotential.

• Microgrid-as-a-Service (MaaS) expands the promise of microgrids by removingfinancialcapitalobstaclesandincreasingvalueoptions.

• Wheninnovationisappliedtonewbusinessmodelsfortheseinnovativemicrogrids,valueisenhanced.

• When individual innovativemicrogrids are interconnected into larger networks –nestedmicrogrids – thennetworkplatformswithremotemanagementandcontrolhelptoalignthesesystemswiththeneedsofincumbentpowersystems–stillmorevalueisadded.

• Amicrogridparadigmshiftoccurswhenlimitingdefinitionsfromtheearlydaysofanewindustryareadjustedtoenableinnovationandvalueexpansion,introducingaValue-AddedEnergymarketplaceopentoinnovation.

Table of Contents Chapter1.Technology-basedEnergyComesofAge.................................................................................3Chapter2.RedefiningtheMicrogrid................................................................................................................5Chapter3.FromDERBundlestoInnovativeMicrogrids........................................................................6Data/OpsNetworkingPlatforms..................................................................................................................7PersonalMicrogrid..............................................................................................................................................7

Chapter4.TheMicrogridParadigmShift.......................................................................................................8



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Chapter1.Technology-basedEnergyComesofAge

Aswemove into aworld filledwith commoditizing renewable energy inmultiple forms,howlongwillwekeeptalkingaboutsingle-technologysystemsorreferringtocustomersandmarketsbasedonasingletechnology?Andforthatmatter,howlongwillmeteredkWhpricesand$/galdriveourconversationsaboutthevalueofenergy(e.g,LevelizedCostofEnergyorLCOE)?Thesetwoissuesareconnected,afterall:technologyadvancesenablevalue-basedservicesthatdisplacecommodities,leadingbusinessesthatsellcommoditiesbycost(e.g.,utilities)totransformintobusinessessellingservicesbyvalue.Consider,forinstance,that“all-you-can-eat” service plans in telecom made tracking long distance minutes and cell phonebudget restrictions distant memories, and led to the internet and the smart phonerevolutions.Todaywetalkwithexcitementaboutgrowthinemergingenergymarkets:PVowners,EVdrivers,PowerWallpurchasers,LEDcustomers,andNESTbuyers.Butwhathappenswhentheseindividualsandbusinessesstartbuyingnotoneproduct,butallfive,puttingthemtouseinnewwaystogainenergyindependence?Eachoftheseenergypioneershasenteredthesameroomfromadifferentdoor,convergingonacommonhallwayforward.ThisPersonalEnergyconsumergainstheoptiontobecomeaprosumer,leveragingnewtoolstogainenergyindependencebyproducingenergyonsite.Andprosumersareremarkablydifferentthanratepayers.Personal Energy represents a newmarketing fieldwhose purpose is to understand andserve the consumer on the path to becoming a prosumer – the rising prosumer. Thepotential of themicrogrid – DERs organized into a system - has teased us for years byreplicatingthestabilityofalargeutilitygridonasinglecampus.Whether forpoweraccesswhere thegriddoesnot reach, forpowercontinuity in regionspronetoextendedpoweroutages,foreconomicstabilityagainstpotentialrateincreases,orasasourceofcleanenergytosupportclimatechangemitigation,microgridshaveremainedmore about potential than ready value,more an alluring research project always one ortwoyearsfromcommercialization.Thecomplexityandpriceofmicrogridshas so farmostly limited them todemonstrationtrials and research projects. But now that combinations of energy and informationtechnologiesmaybeconsideredforsynergyvalue,movingupanescalatingchainofvalue,asdemonstratedinFigure1Innovativemicrogridsinavarietyofformatswillsoonstartto



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appeal to specific market segments, but also to look like the most appealing form ofdispatchableDERtogridoperators.Microgrids (andcommunity-scaleDERdeployments like solargardens) representamoredigestible form of DER for distribution utilities and regional grid operators than thealternative-massivenumbersofsmall,individualPVsystemsandEVchargerspoppingupthroughoutaserviceterritorylikemushroomsinaforestafterarainynight.

©MaaSEnergy2016

Figure 1. Value-Added Energy, Source: MaaS Energy Given the falling prices and increasing capabilities of new energy technologies, electricdistributionutilities are likely to sidestep the disruption that comes frombeing stuck inreactivemodeasevermoresmallsystemscomeonline.Instead,lookfortheseutilitiesingrowingnumbers to proactively plannetworks of dispatchableDER andmicrogrids thatmore tightly fit into their current gridparadigm.And regional gridoperatorswill followsuitattheISOlevel.Accelerated DER penetration and the potential of advanced energy networks like theInternetofThingsandtheEnergyInternet(eNet)willmakenetworkplatformsnecessarytoprovidedataaccessandadvancedoperationalcapabilities.Suchplatformswillusherinthisnew world of microgrids, providing the necessary transparency and value creation toenableco-optimizationforbothbuildingownersandgridoperators.



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Chapter2.RedefiningtheMicrogrid

A common understanding of the microgrid emerged over the past decade or so, asmicrogrids went from concept to reality. The US DOE now offers this widely accepteddefinition.

“A group of interconnected loads and distributed energy resources (DER) with clearly definedelectrical boundaries thatacts asa single controllable entitywith respect to thegrid [and can]connect and disconnect from the grid to enable it to operate in both grid connected or islandmode.”

Twokeychallenges,notedintheunderlinedsectionsabove,haveshapedthedevelopmentofthisnewindustry.First,with few exceptions, the regulated utility distributionmonopoly has remained theonly legal entity allowed to distribute power from one property to another, which hasboundedthephysicaldimensionsofamicrogridtoacampusor largerfacilityonasinglepiece of real estate. That definition has also bounded our imaginationwhen it comes topossibilities.Asecondchallengehasbeentheneedtoisland(connectanddisconnect)thesystem,whichincreases the complexity of control systems and adds considerably to costs. Thesechallenges have so far limited deployedmicrogrids to large, complicated and expensivesystems,evenas technologyhas improvedandcomponentcostshavedropped. Islandingintroducescomplexityandcostthatinmostcasesareunnecessary.Ifweweretomodifythisdefinition,focusedonthosetwokeylimitingprovisions,amarketfor simpler, easier innovative microgrids could expand dramatically. Consider this newdefinition.

“A system of interconnected distributed energy resources (DER), load(s), and energy storage,equipped with energy management and control, designed to meet or exceed unique siterequirements,andislandedonlyduringoutageswhenbackuppowerisrequired.

Such simpler, smaller, more affordable microgrids would introduce the potential forinnovationaswell,asdemandshiftedfromsingleDERpowersystemstoDERbundlesthenontoInnovativeMicrogrids,inthepursuitofescalatingvalue.



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Chapter3.FromDERBundlestoInnovativeMicrogrids

The recent approval for Tesla to merge with Solar City in November 2016 sparked theimagination of the DER world. Bringing three DER technologies (PV, EV and EnergyStorage) under the same corporate umbrella raises expectations for dramatic new salesand value opportunities (e.g., shared sales processes, retail stores, etc.) and moreinnovationtocome.Lookingpastsalespotential,thereisavalueshiftfromcombiningtechnologieslikesolarPVand energy storage, creating a system that can both shift output to be used during peakperiodsandthatcanoperatewhenthegridgoesdown.Another binary bundle with tremendous value is solar PV and LED lighting, twotechnologies that have experienced relatively recent, dramatic price drops.Will it makesensemuchlongertodeployrooftopsolaronabuildingthat’snotyetoptimizedwithLEDlighting? Arguably, PV plus LED is on the way to joining PV plus Storageas the “peanutbutterandjellycombosofDER.”Nowcombinearesource(PV),load(LED)andenergystorageandyou’rewellonyourwaytowhatmightbecalledasimplemicrogrid.

“A single resource, a single load and energy storage, with energy management and controlfunctionsoperatingasanintegratedsystem.”

PerhapsmorethanthesalesadvantagesdiscussedinpresscoverageoftheTeslamerger,the value of integrating solarPV,energystorageandelectricvehicles is expansivelymorevaluablewhensoldasa system–an innovativemicrogrid -offering toeliminategasolineandrelatedautomobileexpenses,shiftloadtoavoidpeakexpenses(DR),enableancillaryservicestothegridandtheISO,andwithoversizedPV,evenenablelong-termPPAsales,leadingtotransactiveenergyamongpeersinanovelenergymarket.Nowimaginespecializingthese innovativemicrogridsolutionstomatchthe facilitiesandbusinessmodelsofuniqueconsumers.ConsideraWarehouseMicrogridforexample.• Identify the local sites with the greatest potential from both the user and supplier

perspectives using a distribution utility service territory audit for locationaloptimizationandanenergyefficiencydataevaluationtoidentifythewarehouseswiththegreatestoptimizationpotential

• Designastandardizedsystemthatoptimizesforwarehousebuildingandbusinesstype• AddressinternalenergyefficiencywithLEDandHVACretrofits–keyfocuswillbeLED,

aslightingexpensesarepredominateinwarehouseload



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• DeployrooftopPV-theampleroofspaceonwarehousesenablesanoversizedsolarPV

system(providingnewsourcesofrevenueforaddedvalue)• Integrate smart energy storage to tie the system together into amicrogrid, lower or

eliminatedemandchargesandenablegridancillaryservices• MonetizetheinvestmentwithaResourcePPA(powertoREPorverticalutility)• Accelerate system valuewith aGridServicesPPA (services to distribution utility and

ISO)tomakethesystemcostcompetitiveevenwithhistoricallylowkWhrates• Networkthesystem,addingdataanalyticstooptimizesystemops,improvevalue,and

aggregatemultiplesitestocreateaVirtualPowerPlant(seenextsection)

Data/OpsNetworkingPlatformsJust as desktop PCs accelerated in value, first with LANs and Ethernet, then with theInternet and TCP/IP, individual innovative microgrids will gain still more value whenconsideredasapartofabroadervalue-addedenergynetwork.Thelaststagetoturnthisnew Microgrid Paradigm into a truly compelling prosumer value proposition is tointerconnect the systemwith a data/opsnetworkingplatform. Beyond transparency andremote system control, a platform that enablesmultiplemicrogrids to interact within abroadersystemintroducespreviouslyunattainablebenefitsatminimalcost.In sufficient numbers, such nested microgrid networks introduce a compelling valueproposition thathasnotbeenavailablebefore.At scale, theywill create aVirtualPowerPlant,whichwillenableadditionalcleanandaffordablerenewablewindandsolarfarmstobebuilt.Theseenergynetworkswillenableagingdirtycoalplantstoberetiredaheadofschedule. Theywill enable greater grid resiliency aswell, ensuring that critical facilitiesstayonline,evenduringextendedpoweroutages.PersonalMicrogridInnovative microgrids as described herein can be found already, especially in areas ofenergypovertylikeruralKenya,asshownbelow.ThissimplemicrogridintegratesasingleResource, some energy Storage and two Loads to create a compelling Personal Energysolution at its most basic. Expanded options enable still more functionality, including adigital TV. The value potential for this population from energy innovation is huge, withrelativelylittleinvestmentwhenviewedfromdevelopedworldstandards.

SunTransfer Kenyawas established in 2009 to provide full power access to off-grid areas. “Ourmaintargetistoinstallpowerforfamiliesinruraloff-gridareas,”Wanjirusaid.ThelifespanoftheSunTransfer solar isaround20years, enabling the families to significantly reduce their lightingexpenses.Thesolarsystemscomeindifferentpackages—ST20comeswithfourlightbulbs,a20-wattsolarpanel,12-voltbattery,andphonechargingkit.TheST50comeswithfive lightbulb,a50-wattsolarpanel,and38-voltbatterysystem.ST100hassixlightbulbs,a100-wattsolarpanel,24-inchdigitalTV,phonechargingkit,andDC/ACinverter.”Pay-As-You-Go Solar Model Brings Security to Small Kenyan Communities Renewable Energy World,December12,2016



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Chapter4.TheMicrogridParadigmShift

When progress in technology enables a shift in imagination as described herein, newpossibilitiesemerge.• Microgrid-as-a-Service. Rethinking a microgrid as a service offer -microgrid-as-a-

Service (MaaS) – that is tailored to a variety of critical businesses and organizations,even individual residential customers, expands the promise of microgridsexponentially.

• DERasSystemComponents.AsDERtechnologiesbecomeevermoreaffordableandcapable,theycanberepurposedascomponentsofhighervaluesystems.

• InnovativeBusinessModels.Wheninnovationisappliedtonewbusinessmodelsforthesesystems,thevalueisacceleratedstillfurther.

• Network Platform. Finally, when these individual systems are interconnected overnetwork platformswith remotemanagement and control, aligningwith the needs ofincumbentpowersystems,theirvalueexpandsevenmore.

Nestedmicrogrids large and small, designed and deployed tomeet the needs of variousorganizational and individual business models, then networked with distribution andregionalgrids,representthefoundationofaMicrogridParadigmShiftbeyondthecampusvisiondefinedseveralyearsagobytheDOEandothers.When microgrids of all sizes and shapes are widely deployed and interconnected withlegacygridsusingnetworkplatforms,wewillhaveshiftedtoValue-AddedEnergy,whichwillunlocktremendouseconomicandenvironmentalbenefits.Tolearnmoreaboutmicrogrid-as-aservice,[email protected],www.1maas.com.

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Innovative Microgrids A PE eBook 121916