National Academies Press: OpenBook

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

Chapter: Chapter 5 - Barriers and Considerations

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Suggested Citation:"Chapter 5 - Barriers and Considerations." National Academies of Sciences, Engineering, and Medicine. 2018. Microgrids and Their Application for Airports and Public Transit. Washington, DC: The National Academies Press. doi: 10.17226/25233.
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Suggested Citation:"Chapter 5 - Barriers and Considerations." National Academies of Sciences, Engineering, and Medicine. 2018. Microgrids and Their Application for Airports and Public Transit. Washington, DC: The National Academies Press. doi: 10.17226/25233.
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Suggested Citation:"Chapter 5 - Barriers and Considerations." National Academies of Sciences, Engineering, and Medicine. 2018. Microgrids and Their Application for Airports and Public Transit. Washington, DC: The National Academies Press. doi: 10.17226/25233.
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Suggested Citation:"Chapter 5 - Barriers and Considerations." National Academies of Sciences, Engineering, and Medicine. 2018. Microgrids and Their Application for Airports and Public Transit. Washington, DC: The National Academies Press. doi: 10.17226/25233.
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Suggested Citation:"Chapter 5 - Barriers and Considerations." National Academies of Sciences, Engineering, and Medicine. 2018. Microgrids and Their Application for Airports and Public Transit. Washington, DC: The National Academies Press. doi: 10.17226/25233.
×
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Suggested Citation:"Chapter 5 - Barriers and Considerations." National Academies of Sciences, Engineering, and Medicine. 2018. Microgrids and Their Application for Airports and Public Transit. Washington, DC: The National Academies Press. doi: 10.17226/25233.
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22 Technical Many DER technologies are on the market, ranging from well-established solar PV technol- ogy to emerging technologies in the piloting phase. Off-the-shelf microgrid controllers are less widely available and are generally custom built on a project-by-project basis. Technology and vendors provisioning microgrids do exist, so access to the technology itself is not a barrier and many different microgrid needs can be met. Airports and public transit entity operations may find that some technical aspects present as challenging. Technical barriers and considerations may include: • High demand: Both airports and public transit operations have potentially large critical elec- trical loads. This is not an absolute barrier to implementing a microgrid, but it does neces- sitate very large systems. Both generation and energy storage assets must be of considerable capacity to support a reasonable portion of the peak and daily demands. Other unique chal- lenges are high ramp-ups and demand spikes from electrified transit vehicles, which can occur simultaneously and can be unpredictable. • Demand profile: Microgrids that are able to maximize on solar generation self-consumption are generally more successful models. Airports and public transit operations are essentially 24-hour-a-day operations. They have a larger than average nighttime load, an earlier ramp up at the start of the day, and a later ramp down when compared to commercial buildings. Although they have a large load during solar PV generating times, their load continues to be high for several hours outside this period, necessitating high volumes of stored energy or other significant generation assets. • Continuity during construction: Most existing facilities installing a microgrid would have a need to continue their operations through construction, at least in part. Airports and public transit entities present further challenges given the complexity and scale of their operations, the need to maintain a high level of security, their responsibilities to the public and customers, and the 24-hour nature of their operations. Construction therefore presents a challenge. • Security requirements: The need to maintain security, particularly at airports, is para- mount. Occurrences of successful serious power system cyber attacks have been few, but this is only due to robust cybersecurity measures so security requirements should always be a consideration. • Dispersed load: Airports in the United States are large campuses ranging from 600 acres to 35,000 acres. Like airports, public transit systems incorporate many varying load types and sizes over widespread areas. Larger sizes and varying load types result in more complex analysis—and potentially in additional metrics and business case studies to determine which of the available facilities present the best cases for microgrids. Different loads would also need to be analyzed to determine the optimal mix of isolated microgrids and where several loads could be grouped into a single microgrid. C H A P T E R 5 Barriers and Considerations

Barriers and Considerations 23 • Co-locating loads and generation: The space available for the installation of generation resources may not be in close proximity to the loads it should serve or have easy access to electrical infrastructure. • Lack of data: Electrical demand data is an important resource for optimal microgrid design. Industry responses suggest that, generally, airports and public transit entities rely on 15-minute interval data from their utility. The issue with this time span, particu- larly for public transit entities, is that brief power demand spikes and ramp-ups are not recorded. Before installing its own medium-voltage distribution network, San Diego Inter- national Airport relied on utility meter data. With implementation of the new system, however, the more than 100 utility meters that had been located around the airport campus were replaced by only three meters located at the points of utility connections. The change caused the airport to lose a lot of granularity in meter data. San Diego International Airport The DOD has used microgrid technology for many years. The founder of Black Start Innovation [a company that has previously worked with the DOD] emphasized how important data is to microgrid design. He advises that waiting even a year or longer to obtain the necessary data to make informed decisions is a good idea, resulting in a better microgrid solution to fit the requirements. Black Start Innovation Financial For airports and public transit entities, the financial barriers and considerations vary based on location given differing energy pricing, utility service offerings and state incentives. Financial barriers may include: • Examples of financial success: The remote, military, and university microgrid markets have all benefited greatly from the increasing, visible examples that can be used to demonstrate project success in their sector. Airports and public transit entities lack a body of established projects that can demonstrate successful business cases and economic frameworks. • Low-cost electricity: The business case for microgrids improves as electricity costs increase. Generally, airports and public transit agencies will buy energy at medium volt- age and high volumes, which attracts a lower rate than lower use, low-voltage power. Electricity rates also vary dramatically by state, so certain states have greater opportuni- ties than others do. • Low or absent feed-in tariff: The business case also can be hurt in situations where the microgrid produces excess generation that needs to be exported to the distribution grid and the feed-in tariff for selling electricity back to the grid is either low or non- existent. Information about net energy metering schemes by state can be found at http:// www.freeingthegrid.org. • Large up-front costs: The high energy demands of airports and transit operations result in large microgrid components. Large-capacity systems require large budgets.

24 Microgrids and Their Application for Airports and Public Transit • Resiliency valuation: Many facilities (e.g., military bases, hospitals, and universities) see the requirement for uninterrupted, reliable, high quality power as a critical resource for their operations. This gives a microgrid value in and of itself, and the prospect of the devastating loss of decade-long experiments is enough to make a business case for some organizations (Maryland Resiliency Taskforce 2014). Airports and public transit entities generally have additional requirements in relation to balancing the business case including strong economic returns. • Conflicting stakeholder interests: Various stakeholders operating under differing bud- gets (e.g., capital planning versus facility maintenance) have competing or conflicting requests. Regulatory/Policy Regulatory issues contribute some of the most significant barriers to microgrid adoption. According to Trabish (2016), the market and regulatory environment currently lag behind the technical capabilities, hindering the monetization of microgrid assets. Some specific barriers include utility franchise rights, restrictions against utility-owned microgrids, and a lack of access for some customers to participate in energy markets. Utility franchise rights prohibit non-utilities from crossing public rights-of-way to deliver power between buildings and assets. If this occurs, then the entity will be subject to the rules that govern utilities. This undesirable situation can restrict campus-style microgrids, but it may not be an issue for airports and public transit entities, depending on site configuration. Rail, light rail, and electric buses supplied via catenary have their own easements and rights-of-way; therefore, franchise rights tend not to be an issue. Utilities often have little incentive to want non-utility microgrids. Economic slowdowns, unpredictable electricity demand, variable fuel prices, and environmental policy uncertainty represent risks to public utilities and can discourage them from embracing new practices (Sandia National Labs 2014). This situation can mean additional challenges in negotiations and extended review times for proposed microgrid projects. Regulations also may restrict utilities from owning microgrids. In 2016, Baltimore Gas and Electric (BGE) had a microgrid proposal rejected by the Maryland Public Service Commission due to a disagreement over the method of cost recovery. In that case, the Maryland Resiliency Taskforce recommended that the state focus on reducing barriers for non-utilities to enter the market offering public-purpose microgrid services to multiple customers (Maryland Resiliency Taskforce 2014). Since the release of the taskforce paper in 2014, however, the barriers remain. Although they generally do not prevent customers from developing their own microgrids, regulatory and market barriers restrict the value that can be extracted from the assets through greater participation in energy markets. Many states do not provide clear policies for the development, ownership, and operation of microgrids, let alone an accepted definition of what constitutes a microgrid (Microgrid Institute for the Minnesota Department of Commerce 2013). Other states, most prominently California and New York, have been far more effective at progressing their regulations. Additional barriers can include interconnection issues to be addressed by the regulatory framework, regulatory uncertainty, bulk power market rules, PURPA enforcement uncertainty, lack of existing tariffs, “Buy America” requirements for federal grants, and lack of adequate and fair interconnection processes.

Barriers and Considerations 25 Operational and Organizational A microgrid has ongoing operational requirements. Operational barriers and considerations may include: • Conflicting stakeholder interests: Large, complex operations such as airports and public transit entities have many stakeholders whose priorities and requirements may be in competition or may conflict. Given that a microgrid impacts so many operations and company sectors, getting a project off the ground may prove difficult. • Complex O&M and procurement: If the microgrid system is owned by the property owner, then ongoing system maintenance is the responsibility of the owner. Large systems require trained, on-site staff to be available to conduct routine checks and maintenance, monitoring, and ongoing optimization. Other options would be to outsource maintenance or organize third-party ownership of the systems. Procurement of equipment and spare parts also can be a challenge for organizations who are not familiar with the technology. • Vendor issues: The system owner will also need to deal with the equipment vendors to resolve any problems. New companies, start-ups, and even some established vendors can occasion- ally go out of business, leaving the owner without troubleshooting advice, warranty, software updates, and spare parts. Some vendors may find the auditing procedures that come with using federal funding discouraging. Some federal agencies also have continuous control requirements that prevent P3s and PPAs from being undertaken with their funding. • Market change risk: Fuel price volatility means there is a risk associated with making a decision on fuel choice. Fuel source costs and availability vary widely among states. Whether a resource is abundant and inexpensive or less available and costly will drive fuel and technol- ogy selection. For example, CHP may be chosen as a generating asset because of the lower natural gas prices today, but prices cannot be guaranteed to stay within the level needed for project feasibility. Given that microgrids are customized for customer needs and geographic location, no blanket solution exists. During a focus group in Massachusetts, a participant whose company owned a small CHP system shared that the firm did not possess the skills to operate the equipment as a microgrid. The company made the decision that taking on the responsibility for the system presented an operating risk to the firm. As microgrid technologies advance, it is expected that these processes will become simpler; currently, however, experienced engineers are required for upkeep and operations (KEMA DNV 2014). Massachusetts Energy Center Utility Integration Interconnection to the main utility grid can be one of the most significant areas of delay, unforeseen costs, and technical barriers to microgrid development. Interconnection nego- tiations can be lengthy and expensive. The utility will need to assess the capabilities of the macrogrid to support any generation that is planned to be pushed back to the grid. In some cases, the characteristics of the system in a particular location may prohibit more generation without significant upgrades, causing further project costs and delays. The unknown costs associated with performing system impact studies alone could be enough to deter developers from pursuing projects. Utilities can also charge a microgrid owner or developer directly for

26 Microgrids and Their Application for Airports and Public Transit any system upgrade costs required (Microgrid Institute for the Minnesota Department of Commerce 2013). To limit lengthy and expensive utility studies, the CPUC revised their “Rule 21” inter- connection policy to restrict the length of studies. The CPUC also introduced dispute resolu- tion mechanisms to help resolve issues between utilities and microgrid developers. In addition, the CPUC increased the allowable DER interconnection capacity for electrical feeder segments (McDonald 2014). The Maryland Resilience Taskforce claims that the state does not have a standardized inter- connection policy relating to ESSs and microgrids. Looking to the global standards devel- opment agency—the Institute of Electrical and Electronics Engineers Standards Association (IEEE SA)—the relevant standard, IEEE 1547, does not encourage or allow smart inverter technology and islandable DERs (microgrids) (Maryland Resiliency Taskforce 2014). Amend- ments to IEEE 1547 are underway with a targeted release date in 2018 (IEEE SA 2017). The current IEEE 1547.4 standard, released in 2011, does cover design approaches, operation, and interconnection of microgrids. IEEE 1547a (a 2014 amendment) is also a relevant document as it addresses requirements for DER participating in voltage and frequency regulation. Early engagement with and strong partnerships with utilities will be key elements of future microgrid success. Further, microgrids can offer many grid-support services to the utility, including load shedding, peak-demand reduction, and frequency support. Early discussions with the utility may lead to a better understanding of a utility’s needs so that the microgrid devel- oper/owner can take steps to support the resiliency and reliability of the macrogrid. Gaps in Methodologies and Methods Unlike many best-practice building methods and methodologies, standardizing microgrid design is not possible because of the many small variations that alter the optimal system sizing and configuration. Electricity prices, natural gas prices, solar resources, wind resources, building uses, time of use (particularly peak times), occupancy levels, climate, access to incentives and grants, local construction costs, owner goals, site-specific constraints, remoteness, and existing or new-build construction are all case-specific details. Differing combinations of these details can result in dramatically different systems, each meeting the technical, financial, and sustain- ability goals of a microgrid. Standard development is ongoing. One area of progress is in microgrid controller innova- tion: the National Renewable Energy Laboratory (NREL) and the Massachusetts Institute of Technology (MIT) Lincoln Laboratory are holding a microgrid controller innovation challenge to test competing technologies and help develop standardization (Cohn 2016). No accepted standardized way exists for designing a microgrid. Several software packages are on the market, and other software programs have been developed in house by microgrid design companies. Given that microgrid designs are all unique and that it is difficult to lay down rules of thumb or best-practice guidelines, the industry would benefit from disseminating case studies and conducting more sensitivity analyses. The University of California, San Diego used DER-CAM software to investigate a microgrid scenario. Adjusting the input variables allowed the university researchers to determine what variables triggered the greatest sensitivity in the business cases. Additional research covering variations in load profiles and locations may be beneficial. Avail- able tools that offer microgrid and hazard analysis are described in the Appendix to this syn- thesis report. An emphasis on encouraging the installation of smart meters to obtain accurate,

Barriers and Considerations 27 granular demand information also would be helpful. It is preferable to have data over a period of at least 12 months as an input for simulations. Airports and public transit entities also may benefit from a guide to facilitate consensus building around microgrid goals and functionality within their organizations. Successful strate- gies involve having stakeholders agree to a priority list early in the project. Considerations can include identifying whether capital cost or lifecycle cost is more important, what is the value of resiliency, what level of power quality is acceptable, and what is the facility’s carbon footprint. Understanding goals and prioritization was one purpose of this study. Consistently, the inter- view respondents identified resiliency and reliability as their agency’s top drivers. San Diego International Airport suggested that it would be useful to have a document that outlined key factors on which the microgrid owner and utility need to be aligned. Such a document could serve as a tool to help microgrid owners understand and anticipate utility needs and concerns so that they can be proactive in addressing any uncertainties when engaging with utilities. San Diego international Airport

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TRB's Airport Cooperative Research Program (ACRP) and Transit Cooperative Research Program (TCRP) have released a joint report, ACRP Synthesis 91 / TCRP Synthesis 137: Microgrids and Their Application for Airports and Public Transit. The report describes microgrids that airports and public transit agencies can implement to increase resilience of their critical infrastructure. A microgrid is described as a collection of loads, on-site energy sources, local energy storage systems, and an overarching control system. Developments in control technologies have seen advanced microgrid controllers expand microgrid functionality to create new value streams and revenue opportunities, increasing microgrid viability to many more sectors. This synthesis describes the benefits, challenges, costs, revenue streams, and ownership structures relevant to airports and public transit entities.

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