1. Microgrids and the Macrogrid Presentation to the California Public Utilities Commission 20 February 2001 by Abbas Akhil, Chris Marnay, & Bob Lasseter Sandia National Laboratory, Berkeley Lab, and University of Wisconsin, Madison Consortium for Electric Reliability Technology Solutions Other Members of CERTS Distributed Energy Resources Group: Bob Yinger - SCE, Jeff Dagle - PNNL, John Kueck - ORNL

2. Outline  INTRODUCTION TO CERTS - Abbas  THE EMERGING MICROGRID PARADIGM - Chris  DER TECHNOLOGY AND THE MICROGRID - Bob  CONCLUSION - Bob  QUESTIONS - all

3. CERTS Mission Statement “To research, develop, and disseminate new methods, tools, and technologies to protect and enhance the reliability of the U.S. electric power system under the emerging competitive electricity market structure” CERTS Formation Formed in 1998 as an Industry, DOE Labs and Universities consortium

4. Research Performers

5. Core Research Areas Reliability and Markets Distributed Energy Resources Integration Real-Time Grid Reliability Management Reliability Technology Issues and Needs Assessment Addresses recommendations made by Secretary of Energy Advisory Board (SEAB) Task Force on Electric System Reliability

6. CERTS Road Map  Assess market design and reliability performance  Price transparency and load participation for reliability management Reliability and Markets  Microgrids  DER integration  Customer reliability and power quality Distributed Energy Resources Integration  Real-time controls and visualization technologies for VAR management, ancillary services, ACE, load forecasting  Reliability performance measures, tracking and monitoring Real-Time Grid Reliability Management  Reliability monitoring and issues  Research road mapping  Technology tracking  Policy issues and research planning Reliability Technology Issues and Needs Assessment

7. CERTS Industry Advisory Board VIKRAM S. BUDHRAJA - Chair President Electric Power Group MICHEHL R. GENT President North American Electric Reliability Council TERRY M. WINTER Chief Executive Officer California Independent System Operator PHILLIP G. HARRIS President and CEO PJM Interconnection, L.L.C. BRUCE A. RENZ former VP Energy Delivery Support American Electric Power Chair, AEIC Electric Reliability Committee EPRI Research Advisory Council CHARLES B. CURTIS Executive Vice President United Nations Foundation RICK A. BOWEN Executive Vice President Dynegy PAUL BARBER Sr. Vice President, Transmission & Engrg. Citizens Power DALE T. BRADSHAW Senior Mgr., Power Delivery Technology Tennessee Valley Authority JOHN D. WILEY Provost & Vice Chancellor, Academic University of Wisconsin

8. Funding

9. DOE CERTS Relationship

10. The DOE DER Program Goals  Near Term (Year 2005):  Develop the “next generation” distributed energy technologies and address institutional/regulatory barriers  Mid Term (Year 2010):  Reduce the costs and emissions and increase efficiency and reliability of distributed technologies to achieve 20% of new capacity additions  Long Term (Year 2020):  Make the nation’s electric system the cleanest, most efficient, reliable and affordable in the world by maximizing the use of distributed energy resources

11. Program Differences  DOE DER Program sets national policy, goals  Technology improvements: Advanced microturbines, gas-fired engines  Strong emphasis on combined heat and power  Focus on reducing institutional and regulatory barriers  CERTS DER activity focuses on DG systems issues  Examines DG from transmission reliability perspective  Effects of large penetration of DG into the grid:  Control, protection, role in the grid and competitive market

12. Framing the Issues  DOE DER Program goal:  20% of new generation capacity additions through distributed generation by year 2010  26.5 GW of DG  If “small” DG ( <100 kW) captures 25% of the 26.5 GW goal, then - 100,000 small DG sources could populate the grid…

13. Meeting Future Electricity Demand  according to the Annual Energy Outlook 2001  to 2020 U.S. electricity demand:  will grow at only 1.8%/a (GDP at 3.0)  but with retirements, that’s almost 400 GW new capacity  that’s 92% natural gas fired, tripling NG use for power  roughly equivalent to 1000 new generating stations plus associated transmission and distribution (an investment of ~ $400 billion)  NG prices increase at only 2%/a real  electricity prices fall at 0.5%/a real  share of electricity passing through high voltage grid unchanged

14. Limits of Current Power System  other restrictions on power system expansion  siting, environmental, right-of-way, etc.  efficiency limits (carbon, CHP/cogeneration, & losses)  centralized power system planning  heterogeneous power quality requirements  extreme customer requirements  high cost of reliability?  volatile bulk power markets  economic drive to operate power system closer to limits  can the traditional power system deliver digital power?

15. Customer Driven Development  apply emerging technologies to self generate  meet heterogeneous customer requirements locally  control reliability and quality close to end-use  optimize meshed grid reliability for bulk transactions  operate connected or disconnected to the grid  make decisions about power system expansion & operation  group sources and loads  optimize over compatible electrical and heat requirements  power system of relatively weakly interconnected microgrids?

16. A microgrid is...  designed, built, and controlled by “customers” based on internal requirements subject to the technical, economic, and regulatory opportunities and constraints faced.  a cluster of small (e.g. < 500 kW) sources, storage systems, and loads which presents itself to the grid as a legitimate entity, i.e. as a good citizen  interconnected with the familiar wider power system, or macrogrid, but can island from it

17. Customer DER Adoption  goal is to anticipate the microgrid technical problems that must be solved  forecast the attractive technologies and configurations  customer decision is akin to utility planning  local constraints on development critical - GIS  microgrids unlikely to disconnect entirely  DER adoption can/will be shaped by tariff policy

18. DER Adoption by a Typical Office Building on-site installed capacity economic environment scenarios

19. Key DG Technology Substation DG 1-10 MW: 2.2 kV & up  Combustion Turbines  Reciprocating Engines  Fuel Cells  Hybrids “Appliance like” DG ~ 100 kW: 120 - 480 V  Microturbine  Photovoltaic  Automotive Fuel Cell

20. Generation Efficiencies 10kW 100kW 1 MW 10MW 100MW 1000MW 20% 30% 40% 50% 60% 70% Micro Turbine CHP Fuel Cell With CHP Hybrid Fuel cell Reciprocating Engines CCTG GasTurbine Old steam 1 MW

21. Reciprocating Gen Sets oDiesel gen sets generally will be your best choice when: Low installed cost ($/kW).. Gas fuel is unavailable or expensive. oGas gen sets generally will be your best choice when: Air emissions regulations are a concern. A reliable gas supply is available and affordable.

22. Caterpillar’s Gen Sets  In the last 60 days, Caterpillar installed 200MW of rental power throughout the West Coast U.S.  During 2000, they sold nearly 20 gigawatts --

23. Hybrid Fuel Cells/Microturbine  Commercial Scale Plan  Demonstration oDOE oTechnology Program  250kW  1.3MW  2.5MW oElectricity Efficient ( >70%)

24. The New Paradigm oDistributed generation. Small-scale power systems, installed on multiple commercial and industrial customers' sites, can function as a "virtual power plant" under utility control. oUtilities can dispatch these distributed systems to enhance local grid stability, meet peak demands, capitalize on favorable market prices, and more.

25. Application of Distributed Generation: New Paradigm GENERATOR TYPE  Combustion Turbines  Fuel Cells  Reciprocating Engines  Hybrids KEY ISSUES  Ratings: > 1MW  Utility Voltages: 2.2 - 66 kV  Dispatchable:  Can Participate in Markets

26. Key DG Technology Substation DG 1-10 MW: 2.2 kV & up  Combustion Turbines  Reciprocating Engines  Fuel Cells  Hybrids “Appliance like” DG ~ 100 kW: 120 - 480 V  Microturbine  Photovoltaic  Automotive Fuel Cell

27. 30-75 kW Micro turbine  Installed at $700/kW (target is $350/kW)  Efficiency 30%  Air foil bearings  Operation speed 60,000- 100,000 RPMs

28. Microturbine Basics Power electronics Generator Air Compressor Turbine Recuperator 3 Phase ~ 480V AC Hot Air

29. 200kW Phosphoric Acid Fuel Cell  The power plant in Santa Clara is rated at 1.8 MW AC net  It contains more than 4,000 cells $2000-3000/kW

30. Fuel Cell System CO 2

31. lb/kWh  Microturbine  C Turbine  PEM Fuel Cells  Hybrid FC/MT  Roof top PV  DualFuel Engine On Site Generation NOx.00115.00124.000015 ~.0005.00.010 CO 2 1.188 1.145 0.95 ~0.5.00 1.20 “Air Pollution Emission Impacts Associated with Economic Market Potential of DG in California, June 2000

32. Key Factors Impacting Application of Small Distributed Generation GENERATOR TYPE (appliance like)  Microturbine  Automotive Fuel Cell  Photovoltaic KEY ISSUES  Uses Power Electronics  Ratings: small ~ 100kW  Customer Voltages: 120 - 480 V  Dispatchable: Very Complex  Difficult to Participate in Markets due to small size  Connection Cost: High

33. Achieving the 100,000 units Rethink the paradigm :  System approach to DER  Enable small-size DER to be a citizen of the grid  Promote multiple unit installations  Enable appliance type plug-and-play functionality  Enable market participation

34. MicroGrid concept assumes a cluster of loads, micro-sources and storage operating as a single system to:  Presented to the grid as a single controllable unit (impacts system reliability; fits new paradigm)  Meets customers needs (such as local reliability or power quality) MicroGrid Paradigm

35. Utility Loads, micro- sources & storage  Local voltage control  UPS functions  Local redundancy  Digital power  Loss reduction  Use of waste heat Customer 13.8 kV 5 8 M8 M5  Dispatchable load  Responds to real-time pricing  Simple protection MicroGrid Paradigm

36. Islanded Factory: Micro Grid Non-critical Loads Critical Loads 480V 13.8 kV 16 8 22 11

37. Frequency Droop P   o  min  1 P 22 P 16 P 11 P8P8

38. Island Operation

39. Conclusion: 100,000 units Key: The MicroGrid ( Key: The MicroGrid (An aggregation of micro- sources, loads and storage)  Presents itself as a single operating entity to the grid  Customer centered; Key “value added” point  Can participate in markets (load management)  Recognizes combined heat and power applications  No centralized fast control  Visualizes an appliance model: “Plug & Play” model