1. © 2006 San Diego Gas & Electric Company. All copyright and trademark rights reserved. Microgrid – A Smart Grid Alternative Service Delivery Model? Thomas Bialek, PhD, PE Chief Engineer SAME Luncheon – May 12, 2010

2. 2 The Utility World Today

3. 3 The Utility World 2015 +

4. 4 The Utility World Tomorrow

5. SDG&E Borrego Springs Microgrid Project Project Description: In cooperation with the US Department of Energy and the California Energy Commission, SDG&E and 10 public and private sector partners will develop a “microgrid” project - a small version of its electric grid which takes advantage of local distributed energy resources and state-of-the-art controls to enhance grid operations – to achieve a >15% reduction in feeder peak load and improve system reliability. Current Status: Site Selection complete – Borrego Springs Finalizing system requirements and high level design Developing customer communication plan Collaborating with environmental agencies to satisfy permitting requirements Energy Storage Micro turbine Rooftop PV Solar Utility-scale Energy Storage Distributed Generation Home Energy System Ground PV Solar Array PHEVs Switches & Power Electronics National Energy Technology Laboratory Distributed Energy Resources Utility-scale Energy Storage Rooftop PV Solar Micro-turbines Building Energy Storage Community Energy Storage Distributed Generation Home Energy System PHEVs Ground PV Solar Array Grid Resources Capacitor Banks Voltage Regulators Automated Switches Power Electronics Communications Information Electricity Pricing DER status Demand Response Programs Network status Community Objectives Load and Resource Profiles

6. 6 Microgrid Selected Project Site: Borrego Substation Borrego offers SDG&E an opportunity to be the leader in the microgrid area, with the possibility of being able to island an entire substation with peak load of over 13 MW. Key Characteristics: Strengths: No residences nearby, plenty of land More Existing Solar Customers Large Reliability Improvements Possible Possibility of ‘Islanding’ Entire Community Great learning environment Extendable to service territory Challenges: Remote Area Challenging Communications Environment New Fencing Required Requires Accelerating schedule for Condition Based Maintenance and AMI Deployment

7. 7 Project Architecture: Context Level Architecture

8. 8 Issues and Challenges Coordination of Efforts Across Departments and with Subcontractors Integration of Utility and Customer Distribution Energy Resources Distribution Automation Asset Management Security – Cyber & Physical Establishing Secure Communications Network Development of Appropriate Systems and Related IT Architecture Customer Participation in DG and Demand Response Programs Regulatory and Tariff Impacts Integration of New Market Participants Cross-jurisdictional Issues