These days, microgrids are one of the hottest topics in the energy sector. Capitalizing on the declining costs of many distributed energy resource (DER) options, microgrids are emerging as an increasingly viable business model for augmenting the local electricity grid to improve operational resilience in the wake of emergencies.
“Resilience” is the fundamental concept driving much of the arising interest in microgrids. Between the vivid examples of social chaos and economic losses caused by massive power outages in the wake of recent natural disasters – from Hurricane Sandy plunging large swaths of New Jersey and New York into prolonged darkness in 2012, through Hurricane Maria of 2017 wiping out the Puerto Rico electricity grid for months on end – and the envisioned threats posed by physical or cyber terrorism acts, civic and business leaders alike are pondering ways to make their electricity supplies more robust. If not the only or entire answer, microgrids are increasingly seen to be a key part of the solution.
At the Microgrid Knowledge 2018 conference last May in Chicago, speakers from the full spectrum of vantage points offered their perspectives about recent microgrid efforts in which they had participated.
As is often the case at events where microgrids are discussed, the narrative flow was at times difficult to follow. This is because the subject matter bounced freely across many divergent microgrid types.
Different Microgrids Are…Really Very Different
Given that microgrids cover such a wide variety, considering any two microgrids in juxtaposition to each other is fraught with challenges.
A microgrid supplying electricity to a remote but critical military base is completely different from a microgrid that provides assured power to a community center during emergencies, and both of these have few similarities to a microgrid built to support a lightly populated rural town subject to outages when a long/thin transmission line fails in stormy conditions.
As multiple speakers admitted during the course of the Microgrid Knowledge conference, “If you’ve seen one microgrid…you’ve seen one microgrid.”
Yet, highly dissimilar microgrids often get lumped together during conversations. When this happens, it becomes very hard to develop useful insights about microgrids. Significant conscious effort is required to maintain intellectual focus on something related to microgrids while at the same time shifting one’s frame of reference from one extreme of microgrids to the other extreme.
Moreover, thinking can easily become confused – or worse, lead to invalid conclusions – when inappropriate examples are processed through conceptual frameworks designed for other purposes. Without careful and nuanced reasoning, the lessons learned from one microgrid experience might not translate well at all to another microgrid.
Among electricity sector observers, it is commonly noted that a standard industry definition for microgrids is lacking. One attendee at the conference noted that as many as 25 different definitions for microgrids have been found in the literature.
Because there are already too many possibilities in circulation, I don’t propose any new definition of microgrids. Rather, I propose a taxonomy for microgrids, in the aim of providing greater clarity when communicating or jointly problem-solving in the microgrid arena.
First Question to Ask: Microgrid or Minigrid?
When considering a case study that is said to be a microgrid, the initial distinction to assess is whether the example is a separately-operable subset of a larger grid or rather is a small stand-alone electrical system unto itself.
If the latter, as is the case in remote isolated villages or tiny islands in the middle of the sea, then the microgrid is essentially simply a very small utility – with all the corresponding functional requirements of a conventional utility, except writ much smaller.
True, the operational and hence planning needs of a small utility are often more challenging than for large utility, since there is less diversity and correspondingly less ability to take statistical advantage of the law of large numbers on both the supply-side and the demand-side of the electrical system. But, be that as it may, the issues facing very small utilities are essentially the same issues that electric utilities face everywhere. So, this constitutes not so much a microgrid, but rather a “micro-utility”, and is increasingly being called by industry experts and observers a “minigrid”.
Minigrids are of growing interest in rural areas of developing economies, where the grid has never yet reached. In contrast to these situations, when the word “microgrid” is used in the U.S., it’s usually in a context in which a local area portion of the much larger grid can seamlessly disconnect to operate independently – a concept often called “islanding”.
Within the islanding-capable set of microgrids, arguably the most important differentiating factor – at least when considering commercial implications – is if the system involves one or multiple customers.
Single-User Microgrids: Familiar Concept, Better Technologies
Single-building microgrids capable of islanding are fairly straightforward. In fact, they’re nothing new: many buildings have long had the ability to disassociate from the grid and remain electrified. For decades, most hospitals, other critical emergency services (e.g., police, fire), and telecommunications facilities have been able to immediately switch over to self-reliance in the event of a generalized power outage, preserving operational functionality even when everyone else in the neighboring area is dark.
The only thing novel about single-building microgrids are newer and hence greatly-advanced technologies and products that can be considered for commercial adoption, such as highly-sophisticated control systems and lower-cost DER alternatives.
Microgrids Serving One Customer with Multiple Buildings Similar to Single-Building Microgrids
With these advancements, it’s becoming more practical to consider islanding multiple buildings, not just one. Indeed, campuses involving multiple buildings but just one customer are currently a common target for microgrid development activities, enabling the entire campus to operate independently from the grid in an emergency. Examples include:
- Military bases
While a microgrid covering multiple contiguous buildings is technically more complex to build and manage than one involving only a single building, from a commercial standpoint, it isn’t that much different provided that all the buildings are owned by the same entity. In other words, as long as there’s just one customer, it doesn’t much matter how many buildings are involved in the microgrid.
In a campus microgrid, the “point of common coupling” (PCC) – that is, the interface between the microgrid and the main grid – becomes essentially the meter associated with a master account through which the utility serves the campus owner. True, a decision will need to be made on who owns and operates the microgrid “behind” the PCC: the campus owner, the local electric utility, or a third party. But whoever owns/operates it, from the perspective of the larger grid, a campus microgrid looks just like a single building that can be islanded.
As a result, at least when considering the commercial (as distinct from the technical) issues of microgrids, it’s probably appropriate in most contexts to categorize multi-building microgrids along with single-building microgrids into an overall “single-user” microgrid classification.
It’s when microgrids involve multiple customers that things get…really “interesting”.
The Nuances and Complexities of Multi-User Microgrids
To date, most microgrids developed in the U.S. have been single-user microgrids. This dominance stems from the fact that it is relatively straightforward for electricity customers, electric utilities, and vendors to the industry to commercially structure a single-user microgrid.
A single customer can implement an islandable microgrid on their own, requiring no coordination with other stakeholders nor any changes to any pre-existing regulatory structures governing electric utility service. The economics of single-user microgrids are straightforward to evaluate and monetarily structure, because the single entity incurs all the costs of microgrid development, operations and maintenance – and gains all of the benefits that the microgrid affords.
In contrast, only relatively few multi-user microgrids have been developed, because the obstacles to their successful development are numerous and significant.
Since multiple parties with frequently differing objectives are stakeholders to multi-user microgrid development, all aspects of planning, managing, and monetizing these systems involve reaching agreement on various complex and nuanced matters. Multi-user microgrids open questions of what services that companies developing and/or owning microgrids — companies that are not regulated utilities — are allowed to sell to other parties, and how the microgrid interfaces both operationally and commercially with respect to the utility owning the distribution grid in the area.
A newly-released report, produced by a team I was involved in as a result of my affiliation with the Institute of Sustainable Energy at Boston University, may be the first comprehensive review of the obstacles to multi-user microgrid development.
The Special Case of District CHP Systems
Since the earliest days of the electricity system, systems involving combined heat and power (CHP) – also known as cogeneration – have been providing steam and electricity to large and locally-concentrated energy demands in dense urban centers.
As the electricity grid we now take for granted filled in around them, these so-called “district CHP” systems interconnected with the local electricity distribution network, yet retained the ability to disconnect from the grid when necessary to maintain steam/heat service for their dedicated customers.
Fundamentally, these were the first microgrids: they are fully capable of stand-alone operation islanded from the larger grid, providing electricity to a set of customers in their immediate vicinity. Indeed, for the most part, they pre-dated the larger grid within which they would later become a microgrid. As a result, there’s probably not a lot to be learned about future microgrid development from these historical examples.
However, to the extent that district heating represents an untapped but attractive economic opportunity in a location that is also considering a microgrid (e.g., for resilience reasons), a district CHP system is highly likely to be a very attractive option worth serious consideration. Given that they are usually designed to serve multiple customers within a well-defined geographic area, district CHP systems will likely face most of the same development and implementation issues as a multi-user microgrid.
Getting Clear on Microgrids
The old adage says, “If all you have is a hammer, everything looks like a nail.” In the microgrid arena, if all you’ve worked on are single-building microgrids, don’t assume that what you’ve learned and know will necessarily apply well to a multi-user microgrid.
The point of this essay boils down to one simple message: I urge microgrid professionals to employ standardized terminology more rigorously when discussing microgrid projects, and humbly propose the above taxonomy for consideration. If not this taxonomy, then I implore the microgrid community to agree on something at least as workable and spread its usage, as it will help everyone – especially newcomers to the field – avoid misapplying lessons learned across dissimilar microgrid examples.