The mission of this group is to bring together utility professionals in the power industry who are in the thick of the digital utility transformation. 

27,297 Members

WARNING: SIGN-IN

You need to be a member of Energy Central to access some features and content. Please or register to continue.

Post

DER 2019

Image courtesy of CleanSpark

Managing Distributed Energy Resources and Microgrids – Where Do You Begin?

In the last decade or so, the power and energy distribution industry has begun to rapidly evolve, from a centralized energy generation world to a decentralized one. The adoption of Distributed Energy Resources (DERs) including renewable energy and the need for more secure, reliable, and higher quality power have driven this change. Whether it's more frequent power outages due to greater weather instability, taking advantage of creating savings within new rate structures, or even selling power or services back to the grid, the question isn't if DERs should be embraced, it’s how. The real question is how to plan it and how to make it work for you.

The most important step is the first one. Get the proper tools and guidance to plan your DER and Microgrid infrastructure

Power system optimization is extremely challenging. Considerations include physical infrastructure, DER technical constraints, regional factors, meteorological factors, cost metrics, and lifecycle expenses to name a few. Spending time and resources utilizing a software-based modeling tool to justify and plan a DER is an important first step in the process. It will go a long way in reducing risk in executing a DER for any infrastructure no matter how complex.

First, one must determine whether a DER or Microgrid, a collection of DERs working in concert with local loads, makes sense. There are a number of existing software-based planning tools available. The current trend is toward a cloud-based modeling application that’s designed to optimize distributed energy asset selection and sizing based on economics to the owner of that asset,and quantify the multiple value streams creating those economic outcomes, all well before the asset is built. Supporting the integration of solar PV with energy storage with additional baseload technologies such as gensets, fuel cells, micro-turbines, and CHP is where the market is going.  In order to understand project economics and the importance of a DER management system, there is a need to model usage, demand growth, seasonal load and generation patterns, the different DER operational profiles, along with first and operational costs. Cloud-based modelling tools that are AI and data driven will help end-users plan and execute DER management/microgrid technology. The key benefits of a superior planning tool are feature providing optimized system solutions for:

  • Cost Savings & Revenue Generation
  • Sustainability & GHG Reduction
  • Energy Security & Resiliency

Through advanced analytics and addressing the above concerns, one can decide on and then plan an appropriate DER or microgrid solution that provides unique benefits given a customer’s specific needs.  But then the question arises of how do I get the system to operate optimally once it has been modeled and the project is moving to implementation? 

DER management is made possible by advanced computing and the hybrid cloud

With more demand for renewable energy and greater power reliability, decentralized energy sources are multiplying, making intelligent DER management necessary. DER and microgrid systems are long life energy assets exceeding 20 years, and they must maintain flexibility during operation to include future changes in utility rates, along with capitalizing on emerging over-the-meter grid services opportunities, to provide maximum value. By implementing a Distributed Energy Resource Management System (DERMS), managing increasingly more complex mixes of energy resources can be done, so delivering on both cost reduction goals and also grid services revenue opportunities becomes possible. Technology companies that are able to offer sophisticated DERMS capabilities that balance reliability, cost reduction, and environmental concerns requiring active intelligence for decision making and real-time operation not possible with manual or traditional DER control methods. 

But is it going to do what you said it would?

In order to make full use of real-time control with cloud honed insights to manage these sources of energy in a way that makes power more reliable, cost-effective and environmentally friendly, a DER controller enabled with a DERMS must be able to anticipate climate, weather, and usage patterns hourly, daily, weekly, and seasonally. Additionally, a controller must use intelligence to select which energy source is the most cost-effective at what times, load and unload storage based on utility price signals, and even resell energy generated or stored back into the utility grid, if regulations allow. The benefits for energy consumers are meaningful. Energy consumers behind the meter benefit from reduced costs, increased energy security for their critical loads should there be a grid failure, and in many cases cleaner power from on-site renewable generation. Utilities, on the other hand, are looking to tap private DER and microgrid resources to make the greater grid more efficient and reliable through offsetting needs for additional infrastructure improvements or additional baseload generation capacity. This ultimately reduces costs for energy consumers while allowing better returns for utility shareholders. In addition, utilities may choose to integrate intelligence into their switching capability in order to make the optimal use of the intermittent wind and solar energy through active dispatch of energy storage within the grid.

 Balancing energy security with project economics. 

In the case of a recent solar plus storage installation at a defense base facility in Southern California, the goals were more focused on energy reliability, quality, and security. At this defense facility, the challenge was to provide mission essential loads secure power that can operate for long periods in the event of a grid outage. A solar generation and flow battery energy storage system were deployed to the project with a DER Energy Manager software and control technology located onsite delivering 100% renewable driven energy security, increased power quality, and hardened cybersecurity. By contrast, we find that business customers are more focused on economics compared to energy security, but often have a subset of their loads that they would like for utility outage ride-through capability.

Many of our non-military customers are facility owners managing capital-intensive properties. For them, the core benefits of a multi-DER microgrid system involve cost avoidance, first and foremost. With energy costs getting higher every year, and increased efforts for efficiency amidst increased competition, businesses are looking for any opportunity for cost savings, and solutions that offer rapid payback periods with energy savings reaching as much as 50-80%. Even while achieving these economic outcomes, these customers are also able to offer energy security through battery backup for a subset of their loads, typically 10-20% of the peak load, with no additional cost or system expense. We often find that energy security and economics are certainly not mutually exclusive, and that customers can garner both benefits as long as there is a drive to categorize loads by priority. 

DER management will continue to evolve as energy generation, transmission, distribution, and loads gain more complexity

The logical conclusion is that DER popularity for environmental and monetary benefit will grow through demand from business, government, and utility organizations given the value they deliver. Today, there are many instances of a single DER on a facility. However, in the future, multiple DERs on single facilities will be the norm, and the ability to interoperate disparate DERs for outcomes both behind and in front of the meter will become commonplace. This increase in complexity requires additional intelligence and forecasting to predict future operation in order to prepare for a given condition such as coordinating peak load through rate and demand response signals from utilities, local storage dispatch for these outcomes, and even future utility-grade "peaker" Virtual Power Plants (VPPs) will require high-speed reaction time based on current conditions. The ability to anticipate future conditions before they happen will become even more important than today. The key is to know what system combination maximizes your return on investment and dynamically operating the system against the utility’s rate structure, but with grid services price signals, to provide maximized returns behind the meter and meaningful infrastructure benefit in front of it, all while remaining flexible to accommodate changes in price signals over time to secure and maximize lifetime asset cash flows.

Bryan Huber's picture

Thank Bryan for the Post!

Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.

Discussions

Matt Chester's picture
Matt Chester on Aug 29, 2019 1:17 pm GMT

Today, there are many instances of a single DER on a facility. However, in the future, multiple DERs on single facilities will be the norm, and the ability to interoperate disparate DERs for outcomes both behind and in front of the meter will become commonplace.

This is a great observation, especially as the definition of available DER expands from just solar rooftop to on-site storage, DR strategies, even EV's in a vehicle-to-grid scenario. Commercial operations will likely adopt those first, thanks to the presence of facility managers trying to bring down power bills-- but what do you think might be the turning point for the residential sector?

Bryan Huber's picture
Bryan Huber on Sep 11, 2019 4:36 pm GMT

Hi Matt, thanks for your comments! Regarding the residential sector, we believe solar DER will remain popular in certain areas of the country, and utilities will continue to work to have control over some/all of this residential solar for grid management purposes. As far as a turning point for the residential sector into multi-DER solutions, our belief is storage has limited economic benefit to homeowners in most locations currently, thus solutions provided by/through utilities will drive adoption whereby the utility owns the storage system and garners value through Virtual Power Plant (VPP) use of multi-MW deployments aggregated across constrained areas of the grid. In addition, certain private aggregators and financiers will enter this space. It will not be until residential tariff structures move to time-of-use (TOU) where peak times are sometime punitive, and homeowners will be able to realize similar benefits as the Commercial and Industrial (C&I) sector including demand charge reduction, energy arbitrage (buy off-peak, use on-peak), and participation in demand response programs to stack value an provide compelling economics. I hope this answers your question, and thanks for starting the conversation!

Bob Meinetz's picture
Bob Meinetz on Aug 30, 2019 4:08 pm GMT

Bryan, if a microgrid's system developers discover it's more economical to power their grid with a natural gas/diesel/coal DER, how will emissions be regulated? Will they be regulated at all?

Bryan Huber's picture
Bryan Huber on Sep 11, 2019 4:44 pm GMT

Hi Bob, great question. As it relates to fossil fuel driven DER in microgrid operations, their implementation often depends on use case.

Standby fossil DER: We often see solar + storage paired with legacy standby diesel backup generators. In this case, standby operation of the diesel generators are governed by local regulations, but often can operate for a maximum number of hours per year when the grid is available.

Baseload and CHP solutions: We are also seeing quite a few project considering natrual gas baseload generation or small Combined Heat and Power (CHP) solutions. In these cases, local regulation also governs, but often is predicated upon the efficiency of the solution. For example, in California, there is a minimum efficiency requirement for natural gas DER, and fuel cells, microturbines, and CHP solutions which often can be complied with. We are yet to see coal DER and wouldn't expect it to become popular.

That said, regulations surrounding emissions for these technologies vary by jurisdiction. Yet, a good data point might be, that even in the very sustainable and carbon focused regluatory climate of California, operation of natural gas driven DER is still possible, but not always economic. The same is true of most places. The implementation decision comes down to economic analysis and resiliency needs of the end user. 

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »