2017

Energy / Resiliency Master Plan Development – Going beyond IRR

Only Microgrid Justification – Why DC Matters.

Tim Martinson

DCfusion Co Founder

Tmartinson@DCfusion.net

814-899-5245

1

2017

Energy / Resiliency Master Plan Development –Going beyond IRR Only Microgrid Justification – Why DC Matters.

• Often solar is installed based on an IRR only to find out that Resiliency requires Energy Storage to use during a grid outage.

• Development of an Energy / Resilient Master Plan can help identify how short and long term goals can leverage microgrid technology and furthermore see how DC adds value. Operations that require resiliency to serve their stakeholders can create a strategic plan to leverage the value of DER solutions in a DC Based Microgrid.

• Don’t let an IRR only approach keep you from reaching your resiliency goals. Real projects and initiatives will be reviewed including current initiatives of the EMerge Alliance.

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2017

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EMP – Coronal Mass InjectionOn July 23, 2012 a massive CME occurred missing earth by 9 days. An 18 month grid outage was projected if it hit earth.https://science.nasa.gov/science-news/science-at-nasa/2014/23jul_superstorm/

High Impact Threats to think about

Cyberattack In 2014 Russia tested a complex attack scenario (HAVEX/Black Energy2). An unnamed U.S. utility was breached by cyberattacks who gained access to the utility's operational control system, an agency within the Department of Homeland Security reported the week of May 22, 2014.https://www.eenews.net/stories/1060000051

Coordinated Physical Attack on the Power GridOn April 16 2013 gunmen fired on 17 transformers at the PG&E Metcalf Substation and again was breached in August 2014. The assailant(s) are still at large. Intent to shutdown the facility was the apparent motive. Someone cut fiber optic cables, knocking out some 911 service, and then fired a rifle at a PG&E substation, Santa Clara County’s sheriff said.https://www.wsj.com/articles/assault-on-california-power-station-raises-alarm-on-potential-for-terrorism-1391570879

Natural Disasters Hurricane Hugo, Katrina, Sandy, Harvey, Irma

2017

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Power Outages are Increasing

The United States has seen an increase in the number of high-impact, high-cost natural disasters—seven of the ten costliest storms in U.S. history have occurred in the last ten years.

2017

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Existing Backup Power Is Insufficient In Some Cases

Source: NREL Pix 24490

On-site diesel fuel supplies typically only last 1-2

days

Regulatory requirements may limit on-site fuel

storage

Diesel fuel re-supply is vulnerable

Disasters may damage fuel supply chain or

fuel may be diverted to higher priority needs

2017

6

Solar and Storage Costs are Falling

Source: Lawrence Berkeley National Laboratory

Solar Storage

Source: Nature Energy

2017

• Diesel generators alone provide resiliency.

• RE/storage/diesel hybrid microgrids provide resiliency + energy savings + cost savings.

• The triple bottom line.

Energy Savings

ResiliencyCost

Savings

Why consider RE microgrids?

2017

• Multi-use facility includes administrative offices, warehouse, production studio, technology center, customer service center, and hub site delivering cable services to surrounding community

• Average load 150 kW, ranging from 120-250 kW; critical load 155 kW

• Annual energy use: 1400 MWh

• Annual energy cost: $250,000

• 300 kW of backup diesel generation

• R e s i l i e n t R e new a b le E ne r gy M ic r ogr ids

Utility Rate Tariff

Fixed monthly charge $453.25/meter

Facility demand charge $19.38/kW

June-September Energy Charge ($/kWh)

Demand Charge ($/kW)

Noon-6 p.m., weekdays 0.15856 15.518 a.m.-noon, 6 p.m.-11 p.m., weekdays 0.12541 3.05All other hours 0.10878 0October-May Energy Charge

($/kWh)Demand Charge ($/kW)

8 a.m.-9 p.m., weekdays 0.12156 0All other hours 0.1131 0

Case Study: Southern California Telecommunications Facility

2017

Renewable GenerationSolar PVWindBiomass, etc.

Energy StorageBatteriesThermal storageWater tanks

Conventional GenerationElectric GridFuel Supply

Conventional Generators

Dispatchable TechnologiesHeating and CoolingWater Treatment

GoalsMinimize Cost

Net ZeroResiliency

EconomicsFinancial Parameters

Technology CostsIncentives

Utility CostsEnergy Charges

Demand Charges

Escalation Rate

OperationsOptimal Dispatch

REoptEnergy Planning PlatformTechno-economic Optimization

Energy Conservation Measures (via Open Studio)

Technologies Technology MixTechnology Size

Project Economics CapEx, OpExNet Present Value

Modeling

2017• R e s i l i e n t R e new a b le E ne r gy M ic r ogr ids

Input AssumptionAnalysis period 25 yearsOwnership model Third-party ownedSite discount rate 7%Developer discount rate 10%Corporate tax rate 35%General inflation rate 0.1% per National Institute of Standards and Technology (NIST) Utility cost escalation rates 0.1% per NISTIncentives 30% Federal ITC for PV and battery, 5-year MACRS depreciation,

$0.36/kWh SGIPNet metering limit 1 MWPV capital cost $2.13/kW PV O&M cost (includes 1 inverter replacement) $0.02/W-yearBattery capital cost $520/kWh plus $1000/kWBattery replacement cost (year 10) $200/kWh plus $200/kWSolar resource TMY2 solar data

Assumptions

2017• R e s i l i e n t R e new a b le E ne r gy M ic r ogr ids

Solar PV Size 845 kW

Battery Size155 kW, 172 kWh

Developer Costa $2,450,000

Annual O&M $16,900 /yr

% Renewable Energy 91%

Year 1 Savings $42,000

Net Present Value $519,000

Lifecycle Savings 18%

a. Includes PV, BESS, and site electrical work, BEFORE incentives

are applied.

$0

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$5,000

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Peak Part Peak Off peak Facility Demand Charges

Quantifying the Economic Benefit of Solar PV+Battery

2017

• Peak demand without solar+battery

• Peak demand with solar+battery

• 50 kW reduction in peak

• R e s i l i e n t R e new a b le E ne r gy M ic r ogr idsExample Day

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Length of Outage [Days]

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Quantifying the Resiliency Benefit of RE+Storage

2017• Qua nt i f y ing t he R e s i l i e nc y B e ne f i t

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Length of Outage [Days]

Solar+Storage+Diesel Diesel Only

1.8-Day Net Resiliency Gain

Quantifying the Resiliency Benefit of RE + Storage

2017

• Solar PV allows generator to turn off during daytime hours, extending diesel fuel supply

• Battery provides backup during transition from diesel to solar and during cloudy times

• After diesel fuel is exhausted, PV+battery can support daytime loads indefinitely

• E ne r gy M ic r ogr idsHow it Works

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Consideration of worst case utilizing graceful degradation – ER and Trauma Support

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Length of Outage [Days]

Solar+Storage+Diesel Diesel Only

24 X 7 X 365 of “Most Critical Loads

Planning for the worst case

2017

• Grid-connected system saves $519,000 over project life, but provides 0 added resiliency

• The microgrid system saves only $104,000 over the project life ($415,000 less), but provides an extra 1.8 days resilience plus indefinite daytime power

• Is an extra 1.8 days resiliency worth $415,000?

• R e s i l i e n t R e new a b le E ne r gy M ic r ogr ids

DescriptionGrid-

Connected Microgrid

PV+Battery Installed Cost (before incentives)

$2,451,000 $2,451,000

Added Microgrid Cost $0 $415,000

Total Installed Cost $2,451,000 $2,866,000

Net Present Value $519,000 $104,000

Added Resiliency (days) 0 1.8

The Cost of Resiliency

2017

• At this site, integrating solar PV + battery with existing diesel generators provides $104,000 cost savings

• 91% utility energy savings

• 1.8 days added resiliency

• After diesel fuel supplies are exhausted, the site could continue to operate critical loads indefinitely during daytime hours when solar resource is sufficient using just PV + battery.

• Business interruption cost is not included in the economic analysis, but should be considered in the investment decision

• R e new a b le E ne r gy M ic r ogr idsKey Findings

2017

• Utility rate tariff, incentives, technology costs, and solar resource drive solar PV + battery economic viability.

• Sites with higher energy and demand rates (i.e. California, New York, Hawaii)

• Sites with good solar and storage incentives (i.e. California, New Jersey, Hawaii, Massachusetts)

• Sites that place a high value on resiliency

NREL Notice:

• This study was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.

• The analysis is based on projections, estimates or assumptions made on a best-effort basis, based upon expectations of current and future conditions at the time they were developed. The analysis was prepared with information available at the time the analysis was conducted. Analysis results could be different if new information becomes available and is incorporated. This analysis is a starting point for additional research and consideration of investment options. Other factors that can inform decision-making are not considered here. The analysis results are not intended to be the sole basis of investment, policy, or regulatory decisions.

• This analysis was conducted using the NREL REopt Model (http://reopt.nrel.gov). REopt is a techno-economic decision support model that identifies the cost-optimal set of energy technologies and dispatch strategy to meet site energy requirements at minimum lifecycle cost, based on physical characteristics of the site and assumptions about energy technology costs and electricity and fuel prices.

Where Else Will this Work?

2017New York Rev –Microgr id Pr ize

• Climate Change Claims has lead to the significant reduction in fossil plants and a commitment by New

York State PSC order to commit to 50% of the electricity to be created by renewables by 2030

• NYISO sees a very different electric grid

• NYSERDA REV Microgrid Challenge - $40,000,000

• Provided $8,300,000 to communities for Stage 1

• Provided $11,000,000 for Stage 2. 11 Projects for Design 1 Municipality Selected

• Projects heavily leverage CHP which does not align with PSC Order

• Funding to deploy largely left up to the recipient - $20,000,000 from State to 2 or 3 Microgrid Cost

Typical $30,000,000

• NYISO projects slight or no energy growth in the next 10 years

• Yet NYSERDA is supporting EV Charging which shifts Transportation Energy use of fossil to

Electricity.

• Transportation is the largest energy consumer

2017• NY ISO Vis ion

2017Gr id Ne twork i s Trans i t i on ing to Hyb r id Gr id , w i th Cen t ra l i zed Genera t i on and DERs , U t i l i z i ng B i -D i rec t i ona l Power F low

Distributed Solar Generation Without Energy Storage and Internet of Energy

Control Cannot Support the Integrated Bi-Directional Grid of Tomorrow

2017Master Energy / Res i l iency P lanGoing beyond IRR Only To Just i fy a Microgr idWhy DC Mat te rs

DOD, DOE and NREL have successfully secured fundable solutions of critical facilities by first creating a Master Energy Plan. DCfusion has created a hybrid approach focusing on Municipalities and High Impact Threat (First Responder) sites.

By placing resiliency first the solution might yield a completely different result.

Reference NREL/TP-7A2-48876 – Net Zero Energy Military Installations: Guide to Assessment and PlanningMarines Corps Air Station - Miramar

2017Master Energy Re l iab i l i t y P lan

Problem Statement

Loss of power means different things to different stakeholders

The ability address cost issues also means something different to different stakeholders

One this is certain is no stakeholder wants it to happen to them or to have to pay for it – until a reality event happens again

Master Energy Reliability Plan (MERP) is a Holistic Plan which enable all stakeholders to participate in the process. The MERP leadership

establishes:

1. A Team with representatives from all stakeholders – Government, Residence, Utilities, First Responders, Industry, Etc.

2. Defines Project Selection Boundaries and Goals

3. Determines Baselines

4. Engages Stakeholders and Policy organizations

5. Help the Village understand its options relative to reliability, energy program opportunities and cost

6. Leverage of

1. State Programs

2. Utility Programs

3. Industry Support

4. Community Support

5. Special Finance Programs – PPA , Microgrid-as-a-Service, Lease, NYPA loans, other government sources

2017Process to provide an Master Energy / Re l iab i l i t y P lan to Pro jec t Comple t ion - NY

Master Energy Reliability Plan (MERP)

• Establishes priorities which translate in to

smaller more manageable projects

• Projects can be designed with long term goals in

mind

• Reliability

• Cost

• PSC Order Compliance

• NYISO DER strategies

• NYMPA / NYPA impact

• NYSERDA Participation – Changing Tariffs

• Funding solutions

• Solution designed for the Municipal with all the

Stakeholders in mind

• Utility Programs Prohibitive, Now– With

documents obstacles these are changing –

Bronzeville, IL / ConEd Microgrid Cluster project

1) Initiate the project – Secure leadership support, establish a team representing key

stakeholders, define project boundaries

2) Establish Project Baselines: Create a metrics based method of establishing priorities:

–reliability, policy compliance, cost , etc.

3) Perform Energy Assessment – Identify specific on-site energy projects and their effect

on energy consumption

4) Perform an electrical systems assessment: Apply priority metrics to the identified

sites. Weighted impact of the value of energy per site. What is the most to least critical

site?

5) Make energy project recommendations: The assumption is that funds are not available

to do everything, so a menu of options and relative funding options needs to be

addressed.

6) Create a functional description suitable for creation of a bid package inclusive

financial analysis and funding potential.

7) EPC selected to implement solution - Selected Solution Provider who will Own,

Operate and Maintain Selected

8) Turnover to owner with SLA’s to meet Village requirements in place – Life Cycle

Management

2017

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Master Energy Resiliency Plan for –High Impact Threat Resiliency at Hospitals

DOD Supported EffortPlanning Includes:Role of Graceful Degradation• Continuity of Operations• What is the hierarchy of critical operations?• Planning for a long-term regional outage• Not just electricity

• Water• Waste• Thermal• Supplies

• Lessoned learned during hurricane Sandy and now Puerto Rico

• Available at Amazonhttps://www.amazon.com/s/ref=nb_sb_ss_i_1_12/146-3884582-0417110?url=search-alias%3Daps&field-keywords=resilient+hospitals+handbook&sprefix=resilient+ho%2Caps%2C149&crid=22JNZ153L0EX9

2017

• Plug and play DC-AC and DC-DC “drawers”

enable configuration for any building specific

load, PV system, storage technology and

storage size.

• Proprietary “Auto-Sync” DC-Bus Control

Platform

• Active prioritization of grid, renewables and

storage produces electricity based on most

efficient and economic result, without fixed

algorithms and a central controller.

• Single-point connection to all power sources

and storage into a “smart building”

• Efficient, simple, modular, scalable,

reconfigurable and future proof

Future-proof energy management platform

Synchronizes Load, Distributed Generation & Utility Grid

2017

Flow Battery, > 5 Hrs.

“Energy” Use Cases

Li Ion Power Battery,

< 60 Min. Use Cases

Li Ion Energy Battery,

1-5 Hrs. Use Cases

Discharge Duration

Power Quality

Freq. Reg.

Load Following

RenewablesSmoothing

Peak DemandCharges

DRRevenues

Fuel CostSavings

Short Medium Long

Infr

equ

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Fre

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f U

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Simultaneously Perform Multiple, Optimized Applications with Different Storage Technologies

Resiliency

DG to GridElectricity Sales

Time of Use /Rate Shifting

Source: GTM, ESNC

Storage Portfolio Covers All C&I Applications with

Hybrid Storage Systems

2017

• Using zero-emission onsite renewable energy to feed as much of the building energy load as possible via DC

• Creating microgrid with battery storage capable of using solar panels and numerous future energy inputs (wind, etc.)

• Able to stay connected to AC grid to power equipment not DC compatible (elevators, emergency lights, refrigerators) and to top-up battery storage

• U.S. showcase of retrofitting existing commercial/historical building with DC

• Implementation of Level 3 EVC

• Eventual all DC Loads – Validation Mission Statement

DC Project at Alliance Center

2017

IEEE• IEEE SA MOU• 2030.10 Electricity Access –

DC Microgrids Chair

IEC

• IEC – USNC SysC VTAG TA

• SysC LVDC US Delegate

• WG1 Electricity Access – DC

Microgrids

NFPA

• National Electric Code

Updating

• 2014, 2017, 2020 Revisions

DOE

• LBNL EPIC Co-sponsor

• NREL SME Collaboration

NEMA/ANSI

• DC Metering Standards

Collaboration

PHIUS• Passive House Building Microgrid

Standard

SEPA• Demonstration Co-Sponsor• Microgrids Workgroup SME

SEIA• Demonstration Co-Sponsor

SPI• Solar Power International DC

Microgrid Demonstrations

USGBC• Greenbuild DC Microgrid

Demonstrations

CTA• CES DC Microgrid

Demonstrations

CABA• White Paper Series

UL• Advisory Council Member

Active Collaboration Projects

Active Standards Projects

EMerge Alliance Update

2017

31

EMerge Alliance Update – Solar Power International 2017

Traveling 380Vdc / Hybrid Microgrid

2 Microgrids – Grid independent

• Solar Power International 2017

• Greenbuild 2017

• Consumer Electronics Show 2018

2017

32

Summary

• Resiliency goals can drive the value of a microgrid

• IRR | NPV comparison to meet resiliency objectives enables otherwise difficult to fund projects to move forward.

• Utility Programs and Policy evolving to enable bi-directional power flow and improve economics of microgrids

• Utilities starting to see the value of distributed power gen

• High Impact Threats are real and happening frequently

• Direct Current technologies have advanced will continue to advance • For Microgrids

• End Loads

• Distribution

• DC Codes and Standards evolving

• U.S. showcase of retrofitting existing commercial/historical building with DC

• Implementation of Level 3 EVC

• Eventual all DC Loads – Validation Mission Statement