The Face of the Grid of the Future: Distributed Energy Resources and Microgrids
Jul 29, 2016
Concerns about climate change, grid reliability and resiliency, are enabling a paradigm shift in the structure and operation of the electric power system and shaping the grid of the future.
A distinctive feature of this transformation is the expected higher penetration of distributed energy resources (DER) in the power grid. DERs include distributed generation (such as reciprocating engines, solar photovoltaics, and the like), electric and thermal energy storage, demand response and energy efficiency, and electric vehicles.
Increased deployment of DER suggests a future where the electric grid will rely more and more on smaller and cleaner local generation, with interplay of supply and demand based on market forces and consumer choices under more dynamic prices, supervised and managed by automated intelligent control and communications systems.
Furthermore, natural disasters in recent years, particularly those in the Northeast of the United States, have provided the impetus for development of resilient microgrids to provide uninterrupted power to mission critical services such as hospitals, police and fire departments, pubic shelters, and water and sewer departments.
Over the last few years, the state of New York has experienced several unprecedented weather events, including Hurricane Irene, the October 2011 snow storm and Super-storm Sandy in 2012, which caused significant damage across the state, with an estimated cost of $67.6 Billion. With recent impacts of extreme weather events, even as utilities struggle with physical, fiscal, and resource constraints, increased regulatory scrutiny, and rising expectations for performance; microgrids are an option to help utilities face this challenging environment.
In simple terms, a microgrid is essentially a self-sustaining small electric grid with its own generation resources and multiple internal interconnected loads, which can operate in both grid-connected and islanded modes.
A microgrid can also take the form of a stand-alone small, isolated power system providing power to areas with no access to the larger electric network, such as remote rural villages, small island communities, and military bases.
Microgrids can also include integrated thermal heating and cooling loads served by combined heat or cool and heat power plants (CHP/CCHP). Moreover, microgrids are systems of highly integrated components and contain information systems technology for communications and control, in addition to power systems technology.
If regulatory frameworks allow market participation, besides meeting their own load, microgrids can also participate in various retail or wholesale markets of electricity (such as ISO energy, capacity, and ancillary services markets), either as virtual plants, or with their DERs acting individually.
A number of states in the U.S. are introducing clean and reliable energy plans. For instance, New York has launched the Reforming of Energy (REV) program. The REV is a broad based strategy to spur clean energy innovation and investment based on consumer choice. The New York Public Service Commission (PSC) in taking the lead role in reshaping the regulatory landscape in the state and is working to align public and private interests to develop distributed system platforms (DSP) where DER-based clean energy and demand resources can actively participate in electricity markets (i.e., “market animation”). This participation would be based on electricity prices that would reflect the time and location-based value of electricity generation and consumption (i.e., the “LMP+D” pricing).
Part of the NY REV program is the first-in-the nation $40 million New York Prize competition, designed to help NY communities create microgrids to support mission critical operations and grid resiliency during severe weather events.
GE’s Energy Consulting group (ECG) and Grid Solutions business have been involved in developing microgrids around the world for more than a decade, and ECG is [presently involved in numerous microgrid projects that are helping support New York’s energy vision.
GE is working with 10 communities throughout the state of New York on feasibility studies as part of Stage 1 of the New York Prize competition.
In addition to the communities GE is supporting as part of NY Prize, we’re also working on a project in Potsdam, NY, outside the confines of the competition. The proposed NYSERDA/National Grid microgrid is considered a NY REV Demonstration Project, where GE will be leading the overall project including the feasibility study and detailed engineering design and business case development for the project.
While New York and other states across the U.S. are encouraging the development of microgrids and other DERs, the ultimate role and level of penetration of DER and microgrids in the power system will depend on the prevailing regulatory framework, market structures, and the economic viability of business models adopted for these projects. Initial benefit/cost analyses of some of the NY Prize Stage 1 microgrid feasibility studies indicate a positive outlook for grid-connected DERs.
You can learn more about GE’s microgrid solutions by visiting our interactive infographic!