Microgrids Have Emerged as a Viable Option to the Traditional Utility Grid

Operation and Management

In 2015, Electric Power Board became PEER-certified. Established as an independent board of the city of Chattanooga, Tenn., in 1935, EPB serves 177,000 home and businesses across greater Chattanooga and parts of north Georgia.
In 2015, Electric Power Board became PEER-certified. Established as an independent board of the city of Chattanooga, Tenn., in 1935, EPB serves 177,000 home and businesses across greater Chattanooga and parts of north Georgia.
Photo: JACKSON RILEY PARKER

If owning and operating a miniature power station sounds daunting, that’s because it is if you’re not in the utility business. As such, most microgrids being developed today are handled by private entities, according to Oathout. “Very few building owners have the experience and wherewithal to construct and operate all this stuff.”

With the exception of sophisticated facilities, like hospitals, airports or universities with operations staff that deal in energy management, most facility executives are focused on their areas of expertise and looking to outside sources to supply alternative energy solutions.

“Generally, these things are owned by independent power producers that own the asset and then sell the power back to the user through some sort of power purchase agreement,” Oathout explains. “I suggest that’s probably the most common application for this right now.”

Susman says a microgrid in the truest sense of the word is owned and managed by staff onsite. Involvement by third parties, he says, moves into the community aggregate microgrid category. “But the important point is that it’s not [just] the utility anymore—the utility has been taken out of the equation,” in that the microgrid becomes the primary source for choosing how to distribute energy to a portfolio of buildings, rather than the other way around.

Benefits of Going Micro

Regardless of who owns and manages the microgrid, the benefits microgrids offer are many. From greater flexibility and choice, reduced emissions, improved reliability and energy savings, it’s easy to see why microgrids are emerging as a viable alternative to the traditional grid.

  • FLEXIBILITY. Because microgrids have both power generation and storage capacities, they can continue to supply power to buildings in the event of grid failure caused by brown-outs or natural disasters, Oathout says. He adds, “Microgrids are flexible enough that they might have different technologies plug into them based on the type of building, the size of the building and availability of fuels,” which offers resiliency, or the ability to control the fuel sources you’re using at any given time.
  • CLEAN AND RELIABLE. Switching to microgrids that utilize renewable-energy sources, gives building owners “an opportunity to significantly mitigate their contribution to climate change and value technologies and strategies that can enable responsible citizenship,” according to Sulthan.
  • ENERGY SAVINGS. “By having storage onsite, you might be able to reduce your peak load, so if you’re grid connected, you could essentially level out the load that the grid sees and you might avoid any demand charges. You could really radically reduce that,” Susman says.

Additionally, Oathout notes up to 30 percent of energy is lost in the transfer between a central utility plant and the facilities it serves. “The losses associated with transformers and distribution of electric power primarily suggest that if I can generate that same amount of energy locally versus buying it off the grid where it’s generated, maybe hundreds of miles from my location, I can use much fewer natural resources and create a much smaller carbon footprint by omitting those losses during transmission,” he explains. “If you understand losses associated with transmitting power across the country and just try and minimize the losses, it’s the most economical energy-conservation project you can think of.”

A microgrid is a local energy grid with control capability, which means it can disconnect from the traditional grid and operate autonomously using various energy sources.
A microgrid is a local energy grid with control capability, which means it can disconnect from the traditional grid and operate autonomously using various energy sources.
Image: DLR Group

Considerations for Owners

It’s important to note onsite microgrids aren’t for everyone. Because of their costs and complexity, they work best where multiple buildings are clustered together, such as hospitals, airports and college campuses. In those applications, a microgrid can be an ideal solution. For example, Susman says the University of California San Diego switched to a microgrid to give it the ability to generate its own power through a cogeneration plant that supplies about 85 percent of the power to the sprawling campus. “They also buy a little bit from the grid, but that microgrid really gives them a kind of resilience against grid failure,” he says.

Oathout agrees and suggests most standalone buildings aren’t large enough to align with the power generation capacities for most of the equipment used in microgrids. Additionally, he says the cost to acquire and maintain the equipment can be a barrier. “These are 25- to 30-year projects that you’re going to build and operate and maintain because most of the equipment that’s part of these microgrids has a life cycle at that length,” he explains. “The payback on any of these things is not five years; it’s much further out than that.”

Susman and Oathout note existing buildings should already be optimized for energy efficiencies before considering switching to a microgrid. “All of the things you would consider in terms of a retrofit that would bring you savings, that becomes extremely relevant when it comes to the microgrid,” Susman says. Everything from applying solar film and insulation to more efficient HVAC systems should be addressed prior to making the switch.

“From a technical point of view, if you’re going to retrofit some sort of microgrid into an existing building, there’s likely going to be all sorts of electrical infrastructure modifications required to plug in all these different power sources,” Oathout says. “That’s pretty obvious.”

At the end of the day, facility executives need to consider their building portfolios and their priorities to determine if a microgrid is worth the effort and expense. “If you’re very concerned about reliability and resilience in your energy supply, then a microgrid is an obvious solution, and all the costs that go into that upfront investment are easier to justify,” Susman says. “If you’ve got a small number of buildings, you don’t have particularly critical operations and you’re OK relying on the grid, it might not be the right solution for you because you might not realize the benefits.”

PEER Certifying the Grid

In an effort to drive market transformation in the power and energy sectors, the Washington, D.C.-based U.S. Green Building Council along with GBCI, Washington, and the Perfect Power Institute, New York and other locations worldwide, launched PEER (Performance Excellence in Electricity Renewal) in 2013. Through certification, PEER recognizes industry leaders for improving efficiency, day-to-day reliability and overall resiliency when it comes to severe events, such as flooding and hurricanes. PEER is for all power systems and includes guidance for cities, utilities, campuses and transit.

“PEER was developed through a consensus-driven process very similar to LEED through several years of research, and it is the first rating system in the world that measures and improves power system performance and electricity infrastructure,” says Mili Majumdar, managing director, GBCI. “The standard looks at issues, such as reliability and resiliency of power systems, energy efficiency, environmental issues, population management, as well as operational effectiveness.”

In the same way the LEED rating system provided a framework for sustainable building design and construction, Ishaq Sulthan, technical manager for GBCI, says PEER seeks to do the same in the power and energy market. “We believe the power and electricity sector are currently at the similar tipping point as the building industry was 20 years ago and is in need of a tool that defines a common framework for accountability and transparency in modernization and smarter development,” he says. “Our aspiration is to realize wide-scale adoption of PEER, which will facilitate the construction of a modern, clean and resilient grid system. By doing this, we can reduce global emissions, make the world community more resilient, improve safety and security, and create thousands of new green jobs.”

Although still in its relative infancy, PEER is already making an impact around the world, as indicated by these recent statistics from GBCI:

  • PEER projects help in providing reliable and quality power to 55 million people across the globe.
  • PEER-certified projects have reduced carbon emissions by 20 million metric tons of CO2 equivalent per annum.
  • PEER-certified projects have generated savings of $31 million to consumers and business through demand-side management, renewable-energy purchases and energy-efficiency improvements.

For more information or to view case studies, visit the website. Read retrofit’s article about PEER in the November- December 2018 issue, page 20.

About the Author

Robert Nieminen
Robert Nieminen is a freelance writer; the former editor of Interiors & Sources magazine; and retrofit’s editor at large, specializing in interiors. Under his direction, Interiors & Sources was the recipient of several publishing awards, as well as a pioneer of sustainability reporting.

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