Sima Seidi

Principal Consultant, Microgrids and Distributed Energy Resources

Tetra Tech

September 2017

The Role of Microgrids in Grid Modernization

Initiatives

Contents

Necessity of Grid Modernization

Why Microgrids?

Technical Drivers

Economic Drivers

Challenges

Microgrid Market

Successful Microgrid Projects

Tetra Tech and Microgrids

Necessity of Grid Modernization

Traditional Utility Challenges Manage aging infrastructure and improve efficiency and resilience. In Canada: most of the

existing infrastructure or grid was built before 1980

Manage costs. In Canada: 20% retail electricity price increase from 2013 to 2035

Slowed economic growth. In Canada (National Energy Board, 2016):

1% per year generation growth 2014 to 2040

Real GDP growth of ~1.7% per year 2014 to 2040

Primary demand increase at an average annual rate of 0.7 per cent over the projection period

Integrate renewables, reduce GHGs

Enable customer participation

Canadian Grid Upgrade Requirements

Distribution: ~ $ 70 billion

This is where Smart Grid technologies offer most

value

Source: NRCan, 2014

Smart Grid Benefits in Ontario

Navigant Consulting:

“Smart Grid investments in Ontario, if continue to be made through 2035, can deliver a net benefit of $6.3 B” Source: Ontario Smart Grid Assessment and Roadmap,

2015

Smart Grid Deployment in Canada, 2016

Source: CanmetENERGY

Smart Grid Investment in Canada(2005-2014) 90% of the government

funding of Smart Grid projects in Canada has gone towards:

Energy Storage

Demand Management

Microgrids

Grid Monitoring and Automation

Source: CanmetENERGY

Why Microgrids?

Microgrids Next market iteration of solar

Microgrid market: grown eight-fold from 2010 to 2015

In 2014, Navigant Research predicted $20 B annual microgrid market revenue globally by 2020

Microgrids: Technical Drivers Distributed Generation

Energy Bill Saving

Power Quality and Reliability

Islanding for Higher Resilience

Renewables and Energy Storage Coupling Cope with variable nature of renewables

Cope with technical challenges of high renewable penetration

Advanced Local Control Cost minimization

Asset utilization

Microgrids: Technical Drivers Higher Efficiency: Combined Heat and Power (CHP)

Grid Expansion Deferral

Ancillary Services and Grid Support

Demand Response

Self Healing and Cyber Security

Enabling Smart Grid Technologies

Promoting Local Economies

Economic Drivers: Falling Renewable Energy CostsBloomberg Energy Finance (2017):

Solar already rivals the cost of new coal power plants in Germany and U.S. and by 2021 will do so in quick-growing markets such as China and India.

By 2040 the cost of offshore wind farms will slide 71%

By 2040, wind and solar will make up almost half of the world’s installed generation capacity (12% now), and 34% of all the power generated (5% now).

By 2040, 72% of global power generation investment will be in new wind and solar PV plants.

Economic Drivers: Falling Battery Storage Cost

Battery costs have declined 40 percent since 2014

Bloomberg Energy Finance: utility scale battery storage prices will fall below $500 per kWh by 2021

Economic Drivers: Power Quality and ReliabilityBC Hydro (from Canadian Electricity Association):

Poor power quality is estimated to cost Canadianbusinesses about $1.2 billion annually in lostproduction

Lawrence Berkeley National Laboratory (2006):

Economic cost of power interruptions to U.S.electricity consumers is $79 billion annually.

Economic Cost of Power Interruptions to US Consumers – Source: Lawrence Berkeley National Laboratory

Economic Drivers: Energy ResiliencyAvoided Costs of Major Power Outages

Hurricane Sandy Blackout:

More than 8 million homes (even rooftop PV owners) lost power for more than 2 weeks and up to 60% of backup diesel generators failed for critical facilities.

Princeton University Microgrid (CHP and solar PV) energized the campus for three days

South Oaks Hospital Microgrid (CHP and solar PV) operational for two weeks

Cost: $65 billion in damage in the U.S.Powerless New York During Hurricane

Sandy

Economic Drivers Grid Upgrade Deferral

US grid: $2.1 trillion to modernize and prepare for renewable energy systems by 2035 (IEA)

Other Revenue Streams

Ancillary Services

Demand Response

Peak Shaving and Load Shifting

Government Incentives

NY Prize, Connecticut Microgrid Program, CHP Incentives etc.

Challenges

Government Policy

Regulation

Business Models

Contracting and Back-Feeding

Financing

Interconnection

Microgrid Market Navigant Research:

As of 2Q 2017, 1842 project entries globally, representing 19,279.4 MW of operating, under development, and proposed microgrid capacity.

Remote projects lead

North America No. 1 in operational capacity

Asia Pacific leads the market for under development and proposed capacity

GTM: US Installed Microgrid Capacity to Grow 115% and Reach 4.3GW Over the Next 5 Years

Operational US Microgrid Capacity, 2016, GTM

Successful Microgrid Projects

Co-op City Community MicrogridBronx, New York

One of the largest co-operative housing projects worldwide: 35 high-rise buildings

60,000 residents

40 MW Steam Turbine (CHP) provides electricity, heating and cooling since 2007

Estimates savings of $ 15 M per year: payback in 5 years

Powered residents during Sandy while neighboring areas sat in darkness

Princeton University Campus Microgrid Serves electricity, heating and cooling to 180 buildings

Participates in ancillary markets including voltage and frequency regulation, and Demand Response

Acts as a place of refuge during disasters

Natural Gas CHP Plant: 15 MW Gas Turbine and 4.5 MW Solar Farm

Annual energy savings of $ 5.7 M combined with energy efficiency programs since 2008

Remained operational during Sandy

Kauai Island Microgrid, Hawaii Nearly 95% of the island’s daytime load is

supplied by utility-scale and rooftop solar on sunniest days

PPA between Tesla and Kauai Island Utility Cooperative (KIUC) contracted in 2017:

Solar Power System: 13 MW

Utility Scale Battery System: 13 MW, 52 MWh

Generation shifting and ramp control

Reduce fossil fuel usage by 1.6 million gallons per year.

Remote Microgrids in Underdeveloped Areas Community level solar microgrids from Nepal

and India to Africa

USAID Power Africa Program, 2013-present

World Bank’s Lighting Africa Program, 2009-present

Indonesia Clean Energy Development Project, USAID program in Indonesia and Vietnam, 2011-2020

Brooklyn Microgrid: Blockchain TransActive Grid: LO3 Energy and ConsenSys

Goal: 1,000 participants (prosumers) by 2018

Residential solar/storage systems with peer-to-peer trading system built on blockchain

Offers the chance to bypass utility

Those without solar panels can purchase power credits from neighbors

Local DER and energy generation: benefits going back to the community

Tetra Tech and MicrogridsCanada and United States:

NY Prize Community Microgrid Competition: technical advisory to New York Governor’s Office of Strom Recovery (GOSR), ongoing

Community Microgrid project in Ontario, ongoing

Dugway Proving Ground Microgrid, Utah, 2016

Tetra Tech and MicrogridsInternational:

Power Africa Transactions and Reforms Program, USAID Power Africa Initiative, 2014-2017

Solar PV Microgrid for Rural Households, USAID, Cacahuatepec Village in Mexico, 2005-2008

Preparing the Rural Renewable Energy Development Project, Asian Development Bank, Bhutan, 2009-2011

Indonesia Clean Energy Development Project, USAID program in Indonesia and Vietnam, 2011-2020

Improving Health Facility Infrastructure, USAID program in Haiti and Guyana, 2009-2015

THANK YOU

Contact:Sima Seidi, Ph.D., Principal Consultant, Microgrids and Distributed Energy Resources

Tetra Tech, Toronto, Ontario

sima.seidi@tetratech.com