Microgrids and Their Application for Airports and Public Transit (2018)

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36 The development and deployment of advanced microgrids is still at an early stage. Most advanced microgrids have not been around long enough to verify early estimations of life- time costs and benefits. For this reason, this chapter references both an established microgrid (the Princeton University microgrid) and feasibility studies (Stewart International Airport, Sunnyside Yard, and Eighth Avenue). The Eighth Avenue feasibility study is an example of a microgrid proposal that was determined not to be cost effective, whereas the other two were found economically feasible and are moving into development. Given the bespoke nature of microgrids at this time, it is important to conduct an adequate feasibility study to determine if it will be cost effective to build the system. Feasibility relies heav- ily on the size and nature of the microgrid, as well as the dependability of the electrical grid to which the microgrid will connect. It also depends on the goals of the owner/operator (e.g., the relative priorities of sustainability and GHG reduction, cost savings in the electricity market, sys- tem reliability, and so forth). A major criterion used in the example economic feasibility studies is the number of outage days per year required for the investment in a microgrid to break even. This measurement is based on the lost income of an outage event after accounting for all other income sources. These feasibility studies were issued in response to Hurricane Sandy, promoting microgrids as a way to bolster resiliency. Other metrics might include electricity cost savings, fuel savings (when comparing renewable generation), avoided emissions, and power quality and reliability improvements. It is important to understand that useful technical and economic feasibility studies are both time-intensive and in depth. High-level calculations cannot provide the breadth of insights that are available from a full-fledged study, such as ideal microgrid structure and layout, size, costs, and potential challenges. These insights can lead to significant cost savings during detailed design and implementation (Daryanian, Datka, and Freeman 2017). Other points of consider- ation during feasibility and design are: • Maximize the use of standard (off-the-shelf) components; • Evaluate permitting requirements early on; • Gain utility support; • Maximize vendor testing, integration, and qualification; and • Ensure proper coordination between vendors, including timely submissions of drawings and data (Oehlerking, McDaniel, and Rogge 2016). C H A P T E R 8 Case Examples

Case Examples 37 The four microgrid case examples are used to demonstrate the economic and technical fea- sibility along with the processes involved in planning and development. They cover different building sectors that can all similarly benefit from the increased reliability and resiliency that comes with an advanced microgrid. Importantly, these case studies serve as an example of the importance of utility engagement; the systems are developed in conjunction with the local utility in order to best support the distribution grid through the interconnection with the aggregated energy resources of the microgrid. The cases explored are: • Case 1: Princeton University Campus Microgrid, Princeton, New Jersey • Case 2: Stewart International Airport Community Microgrid, New Windsor, New York • Case 3: Sunnyside Yard Community Microgrid, Queens, New York • Case 4: Eighth Avenue Community Microgrid, Manhattan, New York General Assumptions The lack of mature operational microgrids means that there is a paucity of concrete data con- cerning the long-term economics of microgrids. Three of the case examples selected are based on feasibility studies that were commissioned by NYSERDA in the wake of Hurricane Sandy. The primary focus of their development was to increase the reliability of the electrical system in the event of sustained outages. This gave leeway in the feasibility studies by providing for a factor (outage days to breakeven) that associates an economic benefit with the ability to sustain power during utility outages throughout the expected lifetime of the projects.

38 Microgrids and Their Application for Airports and Public Transit Case 1: Princeton University Campus Microgrid, Princeton, New Jersey Status Operational Location Princeton, New Jersey Type Campus microgrid Ownership Privately owned/operated Drivers Improve energy affordability, increase system reliability and resilience, and reduce environmental impact Peak Electrical Demand 27 MW System Size 19.5 MW Energy Storage Capacity 40,000 ton-hours of thermal storage (chilled water) Distribution Voltage DER Systems Emergency generators [existing] 15 MW natural gas/diesel CHP [existing] 4.5 MW solar PV [existing] 2 × 250 kW backpressure steam turbines Utility Interaction Demand response, peak-demand shaving, frequency/voltage regulation, time of use (ToU) rates, capacity markets Installed Costs Co-generation plant (1996): $35 million Thermal energy storage plant (2005): $25 million Plus additional infrastructure and solar PV system costs added over time. O&M Costs/Year (with fuel) $18 million 2016–2017 Average Yearly Energy Savings Rough estimate of up to $5 million Outage Days to Break Even N/A

Case Examples 39 Intent of Operations Princeton University initially installed its 15 MW CHP plant with thermal energy storage in 1996 to lower peak energy demands and increase energy affordability for the campus (Spurr 2011). The deployment and dispatching of the microgrid controls in 2003 were driven by the desire to increase resiliency and reliability in combination with the opportunity for further cost savings. The installation of 4.5 MW of solar PV to the south of the campus in 2012 was com- pleted primarily as another cost savings measure, with the reduction of GHG emissions noted as a secondary driver (Princeton University 2015). Opportunities Microgrids represent a major benefit to electric reliability and resiliency, which was proved at Princeton during Hurricane Sandy in October 2012. The CHP plant was able to restart in island mode, which, in combination with load shedding, allowed the university to continue providing power to mission-critical activities. In addition to major events such as the hurricane, day-to-day operations also have dem- onstrated the microgrid’s ability to provide the university with economic and environmental benefits. The sophisticated controls on the microgrid combine analysis and real-time informa- tion to decide the most cost-effective way to provide cooling, heating, and power to the campus. These controls also allow the university to curtail its power use from the utility grid in the most economical way possible (Sustainable Business Magazine 2015). Energy cost savings were the prime drivers of Princeton University’s initial investment in DER systems. The need for reliability and resiliency led the university to aggregate their systems into a microgrid. Princeton University Facilities Challenges/Solutions The primary challenges for the deployment of Princeton University’s microgrid were a com- plex approval process for utility integration and non-specific regulations on the subject of microgrids. These challenges are especially relevant today, as many utilities and authorities hav- ing jurisdiction (AHJs) do not have experience with the development of microgrid interconnec- tions. As the deployment of microgrids increases, standards are developed, and the electric and fire codes incorporate regulations for their development, the approval processes for permitting and construction of microgrids will become smoother. Financial Decreased transmission/distribution losses, increased system efficiency.

40 Microgrids and Their Application for Airports and Public Transit Case 2: Stewart International Airport Community Microgrid, New Windsor, New York Source: NRG Energy, Inc. (2016) Status Completed feasibility study Location New Windsor, New York Type Community microgrid Ownership Third-party owner/operator Drivers Operational reliability and resiliency of critical services Peak Electrical Demand 5.3 MW System Size 4.1 MW Energy Storage Capacity N/A Distribution Voltage 13.2 kV DER Systems 0.082 MW solar PV [existing] 2.52 MW diesel backup generators [existing] 0.3 MW natural gas CHP [proposed] 1.8 MW solar PV [proposed] 2 MW natural gas generator [proposed] Utility Interaction Load relief, demand response, reactive power support Installed Costs $11.01 million O&M Costs/Year (with fuel) $250,000 Average Yearly Energy Savings $725,000 Outage Days to Break Even 0.4 days/year over 20 years

Case Examples 41 Intent of Operations The Port Authority of New York and New Jersey (PANYNJ) commissioned the feasibility study with NRG Energy, Inc. to design a microgrid for Stewart International Airport in order to modernize its existing backup system. The main goal behind this modernization was to supply power to the airport and ancillary emergency services for the town of New Windsor, New York, in the event of a utility grid outage, especially from a natural disaster. To implement this goal, the system was designed with N+1 redundancy (a resiliency technique in which each system compo- nent has at least one independent backup component) leading to increased costs. A secondary objective was to advance the PANYNJ’s sustainability policy to allow for increased incorporation of renewable energy sources feeding their energy mix. Opportunities The PANYNJ entered into negotiations with the local utility (Central Hudson) very early in the process. This approach allowed PANYNJ to coordinate with the utility in addressing deficiencies in the distribution grid local to the airport. The microgrid would relieve local grid transmission and distribution infrastructure or primarily critical loads at Stewart Airport and the town of New Windsor. The microgrid would be able to deploy its energy resources on the New York Indepen- dent System Operator (NYISO) capacity market, and the DERs would be available for voltage and frequency regulation in support of the utility. The early involvement of the utility also allowed the Stewart International Airport microgrid to use a portion of Central Hudson’s distribution line as a backbone for the microgrid between the town and airport. Challenges/Solutions Because the PANYNJ brought the utility into the process in the very early stages, the approval process for developing and deploying the microgrid was streamlined. This allowed the project to avoid potential delays associated with approving and permitting a new electrical intercon- nection. One of the main challenges faced by the designers was the turnkey approach to system design. Using components that were not originally intended to operate as a microgrid meant that NRG Energy had to be careful in its selection of subject matter experts in order to ensure smooth feasibility, design, commissioning, and operational stages. Financial Although the value proposition of the microgrid centers on providing resiliency in the case of a distribution grid outage, in this case example the new energy system represented a more eco- nomical and environmentally friendly way to produce local energy compared to grid-delivered energy. Payback on the solar PV was found to be 11 years, with an expected system lifetime of 25 years. The CHP plants were planned to run at peak efficiency by operating when the district could use the waste heat (7 months/year) and were found to have a payback of 7 years.

42 Microgrids and Their Application for Airports and Public Transit Case 3: Sunnyside Yard Community Microgrid, Queens, New York Source: Booz Allen Hamilton, Inc. (2016) Status Concept design and initial financial/utility negotiations Location Staten Island, New York Type Community microgrid Ownership Third-party owner/operator (special purpose vehicle) Drivers Operational reliability and resilience, expansion of renewable generation Peak Electrical Demand 27.4 MW System Size 17.2 MW + 1 MW/4 MWh Energy Storage Capacity 1 MW/4 MWh zinc-air battery [proposed] Distribution Voltage 13.2 kV DER Systems 1.86 MW diesel backup generators [existing] 6 MW natural gas CHP [proposed] 3 MW natural gas generator [proposed] 8 MW natural gas generator [proposed] 0.2 MW solar PV [proposed] Utility Interaction Demand response, peak-demand shaving, frequency response, and reactive power support Installed Costs $31.1 million O&M Costs/Year (with fuel) $7.2 million Average Yearly Cost Savings $10.36 million Outage Days to Break Even 4.9 days/year over 20 years

Case Examples 43 Intent of Operations The feasibility study for this microgrid project was commissioned by Amtrak with the support of Booz Allen Hamilton for the NYSERDA funding opportunity. Amtrak’s primary consider- ation in the development of this microgrid was for the increase of reliability and resiliency of their power supply, not just in relation for outages caused by natural disasters but also because of frequent outages to their system in Long Island City caused by distribution grid reliability problems. The ideal of sustainable design also remained important to Amtrak, and the develop- ment of the microgrid serves as a guiding principle for future development and DER integration. Finally, there was recognition that the microgrid could bolster its financial case with grid services such as demand response, frequency regulation, and spinning reserve. Opportunities This project combined many DERs, each of which allowed for distinct opportunities to sup- port the local grid. The CHP unit at New York’s Penn Station was to produce and sell electricity to the Consolidated Edison (Con Ed) grid, and would allow for frequency regulation and volt- age stabilization. The battery storage system would allow the microgrid to participate in peak- demand charge reduction, frequency regulation, and shifting solar production, depending on the grid’s needs at the time. Challenges/Solutions A major challenge to developing this microgrid in a congested urban area was a lack of sup- port from the local utility. The project faced problems winning the utility’s support for allowing third-party operational control of the microgrid. The project team also had difficulty gathering required information from the utility about utility-owned infrastructure (such as feeders and switches) in a timely manner. These difficulties were solved incrementally through consistent dialogue and engagement with Con Ed. Another challenge was the lack of optimization of financial structures for collecting revenue from DERs and their control infrastructure. Community microgrids that involve multi-party ownership of facilities and generation are a new concept that does not yet have best practices for ownership and operation. Financial Although the projected up-front and operating costs of this project were high, the benefits to be gained with the integration of the systems into a microgrid led to a fair ROI. The report notes that, although the microgrid is financially viable without any grants or funding, anything received would help increase the ROI by decreasing initial capital costs. The project would enable Amtrak to reduce its bulk energy demand enough to reduce generating costs by about $78 million over 20 years, with additional cost savings derived from the increased efficiency of the CHP plant. The project also has a significant reliability benefit, as the microgrid site cur- rently experiences relatively frequent interruptions with a system average interruption frequency index (SAIFI) of 0.11 events/year and a customer average interruption duration index (CAIDI) of 181.2 minutes.

44 Microgrids and Their Application for Airports and Public Transit Case 4: Eighth Avenue Community Microgrid, Manhattan, New York Source: Energy & Resource Solutions (ERS 2016) Status Completed feasibility study Location Manhattan, New York Type Community microgrid Ownership Privately owned, utility operated Drivers GHG reduction, operational reliability and resilience Electrical Demand 31.7 MW System Size 30.9 MW Energy Storage Capacity N/A Distribution Voltage 13.2 kV DER Systems 25 MW NG/diesel backup generators [existing] 5.7 MW NG CHP [proposed] 0.05 MW Solar PV [proposed] 0.15 MW back pressure steam turbine [proposed] Utility Interaction N/A Installed Costs $13.529 million O&M Costs/Year (with fuel) $911,000 Average Yearly Cost Savings $852,000 Outage Days to Break Even 22 days/year over 20 years

Case Examples 45 Intent of Operations The main development proposed for this site was an office building called “One City Block” (111 8th Avenue, owned by Google LLC) that takes up a full city block and would be tied in with nearby midrise apartment buildings (the Robert Fulton Houses), integrating a total of 11 buildings into a microgrid. Google’s primary objective in developing this microgrid was to achieve a target of 50% GHG emissions reduction by 2025, associated with the New York City Carbon Challenge. The secondary objective was improving the resiliency of energy services to both 111 8th Avenue and the neighboring apartment buildings, enabling critical facilities to remain operational during extended utility grid outages. Opportunities Other than generating a small portion of electricity from sources more efficient than those supplying the larger grid (due to the use of CHP plants), the project did not seek to benefit from participation in the grid energy markets. The main opportunities addressed by this project were increased ability to integrate efficient systems to reach the goal for GHG emissions reduction and the increased resiliency of the power supply to the Robert Fulton Houses. Challenges/Solutions One major challenge of connecting a microgrid in an urban area is the need to cross util- ity rights-of-way in public streets. Accomplishing this task requires a standard solution from the regulatory agency that controls access to these rights-of-ways. This is a consideration when designing systems in urban areas, where it is beneficial to seek agency engagement as early as possible in the process. In hand with this issue is the unknown cost of excavation of a public street. Even though safety factors can be built into the cost estimates, a more direct solution is engagement with the utility to lease existing service feeders or spare conduits that can be used instead of laying new ones. This project also faced challenges associated with building codes and operational standards related to its steam-generation capability, especially concerning the operation of the system. Early conversations with the utility were essential to resolving this issue in a timely manner, as the discussions continued throughout the feasibility study. Financial The financial case for this project leaned heavily on the resiliency benefits of the microgrid (as opposed to grid services and market participation), as not even demand response was con- sidered as a revenue stream. Furthermore, renewable or clean energy systems were little studied for integration with this microgrid, mostly because of the sparse resources available in lower Manhattan. These facts are reflected in the required average of 22 outage days/year for the project to break even financially within the expected 20-year project life. This projected aver- age was unrealistic, given that even during Hurricane Sandy the Fulton Houses were without power for only 5 days.