Planning and implementation of bankable microgrids

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Abstract

Currently, many Microgrid projects remain financially uncertain and not bankable for institutional investors due to major challenges in existing planning and design methods that require multiple, complex steps and software tools.

Existing techniques treat every Microgrid project as a unique system, resulting in expensive, non-standardized approaches and implementations which cannot be compared. That is, it is not possible to correlate the results from different planning methods performed by different project developers and/or engineering companies.

This very expensive individual process cannot guarantee financial revenue streams, cannot be reliably audited, impedes pooling of multiple Microgrid projects into a financial asset class, nor does it allow for wide-spread and attractive Microgrid and Distributed Energy Resource projects deployment.

Thus, a reliable, integrated, and streamlined process is needed that guides the Microgrid developer and engineer through conceptual design, engineering, detailed electrical design, implementation, and operation in a standardized and data driven approach, creating reliable results and financial indicators that can be audited and repeated by investors and financers.

This article describes the steps and methods involved in creating bankable Microgrids by relying on an integrated Microgrid planning software approach that unifies proven technologies and tested planning methods, researched and developed by the United States National Laboratory System as well as the US Department of Energy, to reduce design times.

Section snippets

Growing markets

By the year 2027 it is expected that the Microgrid market reaches a volume of 31 billion dollars (Wood, 2018). Another Navigant report identified 240 additional Microgrid projects in the second half of 2018 alone. This represents 10% of the total installed and planned Microgrids of 2258 (Navigant, 2018). Two years earlier Navigant only tracked 1586 projects and counted 148 projects added in the second half of 2016 (Lorenz, 2016). There is a clear trend that Microgrids are growing considerably.

Planning, development, and implementation costs

The current Microgrid and DER project development costs are very high and the Blue Lake Rancheria Microgrid project for example incurred 20% development and soft costs, resulting to roughly 1.3 million dollars for that specific project (Carter, 2019). Based on (Dan Ton, 2012), up to 30% of the entire Microgrid costs can be attributed to the system integration and engineering, which indicates that for wide-spread and fast Microgrid/DER deployment these costs need to come down considerable by

Steps needed for a successful planning, deployment, implementation, and operation

The following high level steps are needed to deploy and operate a Microgrid or DER project successfully:

Challenges with existing financial indicators

A very commonly used index in the electricity space is the LCOE: Levelized Costs of Electricity. The LCOE is a helpful indicator in the electricity industry that allows comparing multiple power plants and the relative electricity generation costs. A simple definition of the LCOE can be

LCOE = Costs/Generated Electricity ($/kWh).

Different time intervals can be applied and some define the LCOE over the whole lifetime of a power plant, for an individual year, or shorter periods. The costs typically

Overcoming siloed tools

A forthcoming report analyzed 31 different Microgrid/DER, design, power flow, and transient tools, showing that there are a lot of tools emerging (Zack Pecenak, 2019). Another overview of simulation and optimization tools in the Microgrid space can be found at (Peter Tozzi, 2017). However, most of them are either purposed for academic usage or are black boxes that cannot be easily integrated into one platform and married with power flow capabilities or transient analyses features. Each tool

The ultimate microgrid software

Based on the considerations in the previous sections the optimal Microgrid software system needs to incorporate the described single steps into one platform, using mathematical optimization techniques for the conceptual design phase, marry it with power flow, transient, management, and operational features and capabilities following similar methodologies as in the conceptual design phase (Fig. 7).

Acknowledgements

We want to thank the Microgrid team at WorleyParsons Advisian for the numerous opportunities to experience Microgrid planning and design challenges first hand and being able to extend our knowledge of Microgrids via our very fruitful collaboration. We also want to thank our team, in particular Zack Pecenak, Kelsey Fahy, and Jon Miron for their very helpful discussions, as well as some of the great figures for this paper.

Michael Stadler, PhD Chief Technology Officer Bankable Energy | Xendee Corporation, California. Senior Scientific Advisor Bioenergy2020+ GmbH, Austria. Since August 2017 Dr. Michael Stadler has been the Chief Technology Officer of the San Diego based Bankable Energy | Xendee Corporation and he is also a Senior Scientific Advisor at Bioenergy2020+ GmbH for Microgrid research. Before that Michael Stadler was a Staff Scientist at Lawrence Berkeley National Laboratory at the University of

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    Michael Stadler, PhD Chief Technology Officer Bankable Energy | Xendee Corporation, California. Senior Scientific Advisor Bioenergy2020+ GmbH, Austria. Since August 2017 Dr. Michael Stadler has been the Chief Technology Officer of the San Diego based Bankable Energy | Xendee Corporation and he is also a Senior Scientific Advisor at Bioenergy2020+ GmbH for Microgrid research. Before that Michael Stadler was a Staff Scientist at Lawrence Berkeley National Laboratory at the University of California at Berkeley and leading the Grid Integration Group. He is a recipient of the US Presidential Early Career Award for Scientists and Engineers (PECASE). He led a team of more than 40 researchers and students in the USA, China, and Europe and he is also the CTO and founder of the Center for Energy and innovative Technologies (CET). Michael has published 240 papers, journal papers, and reports in his 17 year career to date and holds 9 copyrights. He is also leading the design, implementation, and operation of the first Austrian Microgrid testbed.

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