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How a standardized Value of Resilience will proliferate Community Microgrids

Credit: Clean Coalition

Energy resilience is a pressing need for our communities.

Our centralized energy infrastructure is costly, aging, and inefficient, which makes it highly vulnerable. Extreme weather events are occurring more frequently and causing extended power outages. From January through September 2017 alone, the U.S. experienced 16 weather-related events that incurred damage of at least $1 billion. Recent wildfires, hurricanes, and floods have brought renewed attention to the vulnerability of our energy system.

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Source: National Oceanic and Atmospheric Administration

It’s clear that we need energy resilience — and there’s no better way to provide that resilience than with renewables-driven Community Microgrids, which can keep critical loads online indefinitely during grid outages.

Why we need a standardized Value of Resilience (VOR)

While it’s not hard to convince people that indefinite, renewables-driven backup power for critical loads provides significant value, there is not yet an agreed-upon standardized VOR. This metric would assess the VOR for all electric loads, including critical loads at facilities that are the most vital: critical community facilities like fire stations, hospitals, emergency shelters, and critical water and communications facilities.

A VOR standard is sorely needed, and its absence represents a significant gap in the market for Community Microgrids. As Microgrid Knowledge has noted, valuing resilience “is not so simple, yet may be the primary reason an organization installs a microgrid.” The issue is not limited to facilities considering a microgrid. Regulators need to consider VOR when conducting resource planning, but they are currently unable to do so because of a lack of standard values. Utilities wishing to engage in microgrid pilots have had their requests denied because they were not able to quantify the VOR.

The Clean Coalition, a California nonprofit, is working to make it simple to quantify VOR, starting with the Value of Resilience (VOR) methodology, which standardizes VOR for Tier 1, 2, and 3 loads across all facility types. For example, Tier 1 loads are worth the same whether at a hospital or a fire station. Tier 1 loads are of a mission-critical life-sustaining nature; the only difference between facility types is how much of the normal load is Tier 1. Hospitals generally have high percentages of Tier 1 loads, on the order of 50%, while fire stations have a relatively low percentage, in the 10% range, which is close to the norm for the majority of facilities.

This normalization of the load tiers is key to standardizing VOR. Currently, you need to go through an elaborate forensic accounting VOR process for every facility, which is why VOR is rarely analyzed and available for monetization. The Clean Coalition’s VOR methodology, VOR123, fixes that by providing a standardized VOR for Tier 1, 2, and 3 loads based on the average kilowatts (kW) in each tier. That means that you only need to know a facility’s annual energy usage in kilowatt-hours (kWh), divide by 8,760 hours/year, approximate the facility's percentages of total load that are Tier 1, 2, and 3 — and then apply the established VOR123 values.

If you have experience discussing VOR with property owners, tenants, facility managers, policymakers, and utilities or other load-serving entities, you will greatly appreciate the huge advancement that VOR123 will bring to the Community Microgrid market. Standardized VOR will allow all stakeholders to effectively consider VOR when analyzing Community Microgrid economics. This will result in Community Microgrids being widely deployed, and far greater resilience for communities.

Evaluating resilience in terms of critical load

For the purposes of the VOR123 methodology, resilience is defined as the ability to keep critical loads online indefinitely during grid outages.

What is a critical load? It’s one that's considered life-sustaining or mission-critical and therefore has high value to being kept operational at all times, including during grid outages. For a community, critical loads tend to be first responders such as fire stations, police stations, and hospitals; emergency shelters such as schools; and other critical services such as water departments, gas stations, stores, and communications infrastructure. Across facilities, critical load percentages will vary — for example, a hospital will normally consider much more of its load to be critical than a fire station or office building, but buildings that house data centers, scientific activities, and/or industrial processes could have high critical loads.

Although facilities and communities have different needs, we can define critical loads in terms of typical percentages of total electric load:

  • Tier 1 = Critical load, usually 10% of total load: Life-sustaining or crucial to keep operational during a grid outage
  • Tier 2 = Priority load, usually 15%: Important but not absolutely crucial to keep operational during an outage
  • Tier 3 = Discretionary load, usually 75%: Remainder of the total load

Establishing a methodology based on these load tiers ensures that the methodology can be easily applied to any type of facility. What’s important is not the type or size of a facility, but rather the stratification of its load across the three tiers. Each facility can determine how it wants to stratify between Tier 1, 2, and 3 loads.

Solar+storage power backup

Solar+storage Community Microgrids are designed to deliver indefinite renewables-driven backup power to critical loads. Until the VOR123 efforts produce standardized values, in staging these deployments the Clean Coalition is using the utility industry cost-of-service (COS) methodology to evaluate the costs associated with provisioning indefinite renewables-driven backup power to Tier 1 loads with solar+storage, combined with load shedding when Tier 2 and 3 loads need to be shut off to preserve energy for indefinite power backup of Tier 1 loads. Ultimately, the key analysis is determining how much solar+storage is required to keep Tier 1 loads online indefinitely, even on the most unfavorable solar day, based on decades of historical weather data.

Of course, grid outages often occur at times of high solar resource. In a typical California scenario, with Tier 1 loads representing 10% of the normal load, we estimate that solar+storage microgrids that are sized for indefinite renewables-driven backup power for Tier 1 loads will be able to keep all Tier 2 loads online about 90% of the time, and will be able to keep Tier 3 loads online about 50% of the time.

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Source: Clean Coalition

This level of resilience is in stark contrast to that provided by diesel generators. While diesel generators are often sized to back up either Tier 1 loads only, Tier 1 and 2 loads only, or entire loads, they generally have only enough onsite diesel fuel to provide backup power for about two days. Even if they have more diesel fuel available, once it runs out, it may be impossible to replenish during serious disasters. (The same is true for natural gas, which is unavailable for very long durations when its pipelines rupture and/or explode — or are at risk of doing so.) In addition, operations and maintenance (O&M) for diesel generators is expensive because they require regular exercising to remain in working order. And EPA requirements for particulate filters can dramatically increase the capital costs of diesel generators for commercial and industrial customers, and greatly limit their allowed runtimes.

Get involved

The Clean Coalition is working to formalize the VOR123 methodology and standardized values, and to gain industry alignment for them. The organization has already engaged on the VOR123 work with a number of key stakeholders, including governmental, nonprofit, corporate, and other organizations.

As methodology refinements continue, the organization welcomes involvement and input from interested parties. If you’d like to learn more, please contact Dr. Frank Wasko, Managing Director, at frank@clean-coalition.org.

Rosana Francescato's picture

Thank Rosana for the Post!

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Discussions

Bob Meinetz's picture
Bob Meinetz on Jul 19, 2019 3:37 pm GMT

Rosana, the best way to quantify indeterminate values, like the availability of renewable sources of energy, is with a random-number generator. It's a function commonly used in programming languages Python and PHP, and can be used to simultaneously compute both the usefulness and its inverse, the uselessness, of solar and wind energy at any given moment.

The missing piece of the puzzle is predictability. Analysts have discovered quantified indeterminacy is not as useful for planning purposes, but are confident multivariable inputs will soon be producing more consistently-variable random output.

Matt Chester's picture
Matt Chester on Jul 19, 2019 5:31 pm GMT

A really interesting topic, Rosana. Eager to see what comes out of the quantitative, rather than qualitative, approach to microgrids and value resilience. Keep us updated!

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