Amicrogrid is a group of interconnected electric and thermal loads and distributed energy resources within a defined boundary that acts as a single controllable entity with respect to the grid. The major purpose of the microgrid is to secure energy supply to customers most viable for the community. This paper outlines a microgrid system being developed for the City of Utica, NY.
The goal of the project was to develop a community microgrid (MG) system for the purpose of maintaining electric and thermal services for the participating customers/facilities at the City of Utica, NY, at times when weather events or other emergencies severely disrupt the capacity of the local electric distribution and transmission system and gas supply to serve essential customer needs. The project was sponsored by NYSERDA and the City of Utica, NY.
Extensive development of distributed energy resources has allowed the creation and reliable operation of novel microgrid systems. A microgrid is a localized group of electric and thermal sources and loads that normally operates connected to and synchronous with the electric utility synchronous grid, but can also disconnect to “island mode” and function autonomously as physical or economic conditions dictate.
The project team selected the downtown group of six buildings most critical to form a continuous MG (Figure 1).
The MG includes customers providing essential services to the community and must be in operation during any emergency situation. The impact of the MG critical facilities on the City of Utica operation is described in Table 1. Table 2 presents the MG customers’ existing and proposed generation capacities, electric and thermal loads, and consumption.
The combined MG annual electric load duration curve was constructed based on interval and monthly electric meter readings obtained from the National Grid for the six customers (Figure 2).The combined MG thermal load duration curve was constructed based on the monthly gas bills obtained from the MG customers and the annual outdoor temperatures recorded for Utica (Figure 3). The combined peak electric load of the MG is 1,761 kW and the peak occurs in the summer.
Preliminary Technical Design and Configuration
Based on detail electric and heat load analysis, the following DER equipment was selected: two 335-kW CHP high-efficiency reciprocating units to be installed in the basement of the Court House and four 400-kW electric generating reciprocating units installed in the basement of the train station. The CHP units will supply the base load with about 85% of annual energy consumption and the non-CHP units will provide the intermittent, peak, and backup loads. In addition, it was also decided to install a 150-kW solar PV system on the roof of the train station and a 250-kW electric storage facility at the basement of the station. The DERs will be integrated with the existing hot water boilers and chillers which will supplement the heating and cooling supply from the CHP units. The MG one-line equipment diagram is presented in Figure 4 and the electric diagram is presented in Figure 5.
The MG system will operate continuously in parallel with the National Grid at normal conditions. However, in case of emergency and failure of the National Grid electric supply, the MG plant will disconnect from the grid and operate in the islanded mode. Integration of the MG plant with utility electric distribution system requires compliance with utility requirements, which are described in National Grid/DG Installation Process Guide per NY SI/July 2011 ver. 1.0: Distributed Generation Installation Process Guide for Connections to National Grid Distribution Facilities per the New York Standardized Interconnection Requirements (the NY SIR).
The interconnection of the MG to the National Grid will offer the opportunity, when economically feasible, to participate in regional energy markets (i.e., sell excess power, purchase supplemental power, or participate in demand response programs).
- The selected MG should serve multiple physically separated critical facilities located in relatively close proximity and forming a separate island.
- The MG primary generation source will be CHP and DG facilities.
- The combination of generation resources will provide MG onsite power in both grid-connected and islanded mode.
- The selected MG should also: be able to automatically separate from the grid on loss of NG utility service and restore to grid after normal power is restored; comply with manufacturer’s requirements for scheduled maintenance intervals for all generation; provide power to a diverse group of critical facilities connected directly to the MG; include an uninterruptible fuel supply or minimum of one week of fuel supply onsite; and have black-start capability.
Currently, the City Court House, the City Police Station, and Memorial Auditorium are supplied with underground low-voltage AC primary feeders with 120/208 volts. The Boehlert train station is supplied with an underground AC primary 4160-V feeder. At the train station, the feeder is connected to three transformers owned by the utility. The transformers are connected to the train station switchgear equipped with 120/208-V breakers. The Federal Building and the Newspaper Building are supplied with underground low-voltage AC primary feeders with 120/208 volts.
The proposed MG DERs will generate 4160-V electricity. The electricity will be distributed throughout the MG underground electric distribution system (Figure 5). At each of the MG customers a smart meter, a new advanced circuit breaker (fast-switch capable to sense conditions on the National Grid and rapidly connect and disconnect the MG breakers), and a 4160-V:120/208-V step-down transformer and switchgear will be installed. The switchgear will be connected to a local MG controller and the existing switchgear which currently provides the electric supply of the customer. No utility electric distribution system will be used for the MG.
The operation and management of the MG will be controlled and coordinated via both local MG controllers and a central controller, which executes the overall control of the MG and also coordinates the operation and protection requirements of the micro-source controllers. The central controller will provide executive control functions over aggregate system operation, including the individual micro-source controllers, DERs, and power conditioning equipment. The central controller will ensure that power quality and reliability on the MG are maintained through power-frequency control, voltage control, and protection coordination. The central controller will also manage economic dispatch of MG resources, including use of macrogrid power, which it will determine through an optimization process. The central controller is designed to operate in an automated fashion under several different operating modes (i.e., normal grid-connected mode or island mode), but has the capability of manual override if necessary.
The MG will use the SEL MG Controller, which is equipped with the SEL-3530 Real-Time Automation Controller (RTAC). The RTAC has the ability to optimize and balance electrical demand with DERs, schedule the dispatch of the resources, provide synchronization and Volt/VAR/frequency controls, and preserve grid reliability and cybersecurity. It can also interact with, connect to, and disconnect from the utility grid (using fast switches); provide ancillary services (grid-connected, real-power-related, and reactive-power-related); black start; self-healing of the MG distribution system, user interface, and data management, two-way communication, and supervisory control and data acquisition (SCADA); and can have interoperability in order to improve the grid’s power quality and resilience while reducing overall cost.
The RTAC will also communicate with fast switches to enable quick intentional islanding and automatic re-synchronization of MG systems with the macrogrid. The MG fast switches will detect conditions both on the utility and MG sides and make rapid decisions about whether to maintain connection to the macrogrid or to seamlessly separate and institute islanded operations. With a fast switch, MGs could electrically isolate themselves within milliseconds, preventing the need to trip connected generation. A similar process will occur when the macrogrid comes back online and the MG reconnects—generation is tripped for a time period before re-synchronization can occur with the utility system.
Two of the six MG customers (the Train Station and the Memorial Auditorium) currently have Building Energy Management Systems (BEMS). It is proposed to install the MG control system at the Train Station. The existing BEMS systems will be integrated with the MG controller responsible for providing optimum supply and return temperatures of the MG central hot water system. The hot water supply temperature will be modulated in accordance with outdoor temperature sensors by specially developed algorithms. The existing individual cooling systems will also be controlled by the central MG controller. The BEMS will allow the implementation of a number of energy efficiency measures which will result in reduction in the electric and thermal demand and substantial savings in electric and thermal energy consumptions.
The MG controller has the capability to perform the following functions:
- Automatically connecting to/disconnecting from the grid
- Load shedding
- Black start and load addition
- Performing economic dispatch and load following
- Demand response
- Storage optimization
- Maintaining frequency and voltage
- PV observability and controllability, forecasting
- Coordination of protection settings
- Selling energy and ancillary services
- Data logging features
The MG DERs have redundant electric and thermal capacity to meet the required electric and thermal demands of the MG buildings during emergency conditions including severe weather and disconnection of the utility electric and gas supplies.
The MG will be equipped with an advanced metering infrastructure (AMI) that will measure, collect, and analyze energy usage, and which interacts with advanced smart electricity meters, gas meters, BTU meters, and water meters through various communication media. Due to the importance of load balancing on MGs, AMI is important for rapid sensing, communications, and response capabilities.
Smart meters will be installed at each customer. The smart meters will provide a platform for a two-way communication network between the utility and MG controller and each participant’s meter. Smart meters will communicate with building systems (demand generating devices) through a wireless communication system. The building’s area network will link into a Local Area Network (LAN) to establish connectivity between network devices (e.g., smart meters) and the MG’s central control system. The LAN will also use a communication system, such as wireless radio frequency (rf) mesh, to establish connectivity between the electric meters and standalone cell relays that transmit signals to the central control system.
The DER’s plants located at the Court House and the Train Station will be equipped with supervisory control and acquisition systems (SCADA).
MG Commercial and Financial Feasibility
The major benefits of the MG system to the electric utility and the NYISO will be as follows:
- Reduce peak demand on the system and help avoiding the need to invest in new utility assets to serve that area
- Reduce capital expenditures necessary to meet the utility’s required level of service reliability
- Improve the electric supply to the neighboring customers located in the oldest part of the City downtown with aged utility electric and gas supply infrastructure
- Energy benefits, including energy cost savings and reductions in the cost of expanding or maintaining energy generation capacity
- Reliability benefits, which stem from reductions in exposure to power outages controlled by utility
- Power quality benefits, including reductions in the frequency of voltage sags and swells or reductions in the frequency of momentary power interruptions
- Environmental benefits, such as reductions in the emissions of GHG and air pollutants
- Public safety, health, and security benefits, which include reductions in fatalities, injuries, property losses, or other damages and costs that may be incurred during prolonged power outages. Such outages are generally attributable to major storms or other events beyond the control of the utility
- Improve the resilience of the electric distribution infrastructure and defer generation, transmission, and distribution investments (upgrades) and congestion in the downtown of Utica, NY
- Improve reliability for critical loads
- Provide outage management
- The capacity of the MG to provide ancillary and price-driven demand response services to electric utility and NYISO
- Reduce peak loads for the interconnected grid
Customer benefits from the project will include:
- Increase in energy efficiency (lowering energy consumption) by demand and consumption reduction of electricity, natural gas, and water use, implementing building energy management systems, lighting retrofits, HVAC upgrades, and building envelope improvements
- Electric and thermal energy cost reduction in comparison with current conditions
- Increase of reliability and safety of electric and thermal supply
- Increase in quality of electric supply
- Increase in security of energy supply during natural disasters and other risks
- Increase in energy system sustainability
- Improvement of the environment
Community benefits from the project will include:
- The community will secure reliable and safe operation of the MG customers vital to the wellbeing of the city. This will increase community resilience to electric service disruption caused by severe weather and avoid associated substantial economic losses from disruption of customer operations
- Economic development of the downtown area and job creation
- Improvement of electric supply to neighboring customers
- Improvement of the environmental conditions in downtown and avoidance of greenhouse gases (GHG)
- Reduction of other pollutants in the downtown area (NOx, CO, PM)
- Improvement of property values
- Opportunity to start development of citywide district energy system
Three of the customers (the City Court, the police station, and the train station) are owned and managed by the City of Utica and Oneida County, NY, and the Memorial Auditorium is closely associated with the City. The Federal and Newspaper Buildings expressed interest in connecting to the MG system.
Proposed MG Ownership
A municipal City/County MG ownership model is recommended for the following reasons:
- The MG customers are critical to the reliable operation of the City and the County during the year, particularly during emergency situations (severe weather, snow storm, or hurricane).
- The City owns the courthouse and the police station facilities.
- The County of Oneida owns the train station.
- The Memorial Auditorium Authority is related to the City.
- All MG customers are interested in improving the energy infrastructure and reducing energy cost for their buildings.
- The City is planning to develop in the adjacent area a large hospital equipped with a CHP facility.
- The City is interested in developing a citywide district energy system (DES), and the proposed MG system will be the first energy island of the DES in the downtown of Utica, NY.
- The City is planning to start separation of the storm and sanitary sewer system and will be conducting extensive reconstruction of the City streets. The installation of MG electric cables, hot water piping, and communication cables could be combined in one trench with retrofit of the sewer system.
- The City owns the right-of-ways to all streets and can install electric wires and hot water piping at the underground of the streets.
- The existing electric, gas, and water infrastructure in the proposed MG service area (Bagg’s Square and Harbor Point) is the oldest in the City and is subject to limitations for expansion.
- The City is actively conducting rehabilitation and economic development in the Bagg’s Square and Harbor Point areas.
- The City/County can retain a private development company which will construct and operate the MG system.
- The City/County have access to low cost municipal financing.
The technologies proposed for the MG system are all widely used in the energy industry today. The technologies include: onsite efficient, clean, small carbon footprint conventional CHP and renewable generation (solar PV); electric and thermal storage; advanced controls and automatic ability to operate independently from the main grid for an extended period of time (automatic connecting and disconnecting from main grid; demand response capability; balance system supply and demand; optimization of power system based on performance economics; reduced carbon footprint; improved reliability; advanced metering; distribution supervisory control and data acquisition (SCADA) systems; optimized and balanced in real-time electric and thermal system supply and demand.
The project represents a typical neighborhood of a New York city and can be easily replicated. The project can be expanded and replicated in other locations of Utica and the state of New York. The project will also demonstrate the island type development strategy and be integrated with the future central hospital CHP facility to be developed by the City in the adjacent area. The project will demonstrate the advantages of municipal ownership, which can be widely replicated in other NYS municipalities.
The proposed MG project directly promotes the objectives of the NY REV and Renewable Portfolio Standard (RPS). With assistance from the State, the Utica community has been empowered to create and implement local strategies for rebuilding and strengthening the community against future extreme weather events.
The proposed MG system will positively contribute to the New York State Renewable Portfolio Standard Policy’s efforts to increase renewable generation for the state. The MG system includes a 150-kW solar PV unit and 250-kW electric battery storage.
The development of the MG will benefit the economic development of the city of Utica and result in job creation.
Benefit Cost Analysis and Financial Viability
The business model of the project is based on following energy, reliability, and environmental and economic development benefits to the MG customers, the community, and the utility.
Potential Revenue Streams to the MG Owner
- Electricity Sales Revenue Stream. The MG system will allow avoiding purchases of electricity and transmission and distribution services from the electric utility. MG system equipped with CHP units will generate electricity and thermal energy with higher efficiency and fewer emissions than the current system. The MG customers will also avoid electric utility reactive power charges, competitive transition charges, or other surcharges. Moreover, the addition of fuel-free solar PV unit will benefit the customers from reduced energy market price volatility. The analysis indicates that the MG system will reduce the total customers’ current cost of electricity from $738,000 to $590,400, providing about 20% savings. So the electric revenue stream to the MG owner will be $590,400.
- Thermal Energy Sales Revenue Stream. The extensive district energy experience indicates that the MG customers will benefit from reduction of the total thermal energy cost currently paid for self-generation of thermal energy. Typically, the comparison of MG thermal energy cost to individual building cost takes into consideration only fuel savings from use of more efficient MG energy generation systems. However, the current thermal self-generation cost of the customers contains a number of hidden components which have to be taken into consideration. The estimates for the Utica MG customers indicate that the current self-generation cost of thermal energy amounts to $713,256 per year. Assuming that the MG system will provide 20% savings to the customers, the potential revenue of thermal energy to the MG owner will amount to $570,600 per year.
- The power quality improvement to the MG customers is estimated by the Industrial Economics Incorporated (IEC) to be $296,000 per year.
- The value of deferred generation capacity is estimated by IEC to be $170,000 per year.
- Potential value of reduction of utility electric transmission and distribution losses is estimated by IEC to be $75,000 per year.
- The MG will reduce power interruptions and provide reliability cost savings estimated by the IEC to be $45,000 per year.
- The value of avoided emission damages is estimated at $100,000 per year.
- Additional potential revenues of the MG system not estimated at present time may include: participation in demand response markets, sales of excess power to the utility and ancillary services, enhanced electricity price elasticity, reduction in cost of meeting the state’s renewable energy target, potential sales of thermal energy to neighboring buildings, and economic development and job creation for the City.
Capital Investment Cost of the MG Project
The capital cost of the project includes energy generation equipment, energy storage equipment, energy distribution infrastructure, and upgrades to customers’ existing equipment. The initial investment also includes the following costs: project planning and administration costs, project design, building and environmental permits, efforts to secure financing, marketing the project, and negotiating and administering customer contracts.
The total investment cost of the MG project is estimated at $13,040,000. The MG system capital cost will be reduced by the NYSERDA CHP system incentive of $972,000 and Solar PV NYSERDA incentive and Federal Income Tax Credit of $180,000. Total initial capital cost of the MG system will be $13,040,000 – $972,000 – $180,000 = $11,888,000.
- Capital Carrying Charges. The annual capital carrying charges of the cost of $ 11,888,000 are estimated to be $874,957 per year.
- Fuel Cost. Fuel cost for the DER electric generating units at fuel cost of $6.34/MMBtu (IEC recommended) is estimated to be $488,453.Our experience with district energy systems indicates that by coagulating the customers into one system, it is possible to negotiate a lower price of natural gas.
- Labor Cost. Labor cost of four (4) operators at $80,000 per year is estimated to be $320,000 per year.
- Operating and Maintenance Cost. The vendors of the DERs offered service maintenance contracts at $0.015/kWh. At this unit cost, the vendor’s maintenance contracts will amount to $102,733. For our analysis, this O&M cost was doubled to $205,466.
- The MG system will supply continuous electricity and hot water to the community critical customers.
- It is technically feasible to construct an energy-efficient and environmentally clean community MG system in the City of Utica.
- The IEC and the Contractor benefit cost analysis results indicate that if there were no major power outages over the 20-year period, the MG project’s costs would exceed its benefits. In order for the project’s benefits to outweigh its costs, the average duration of major outages would need to equal or exceed 4.8 days per year (IEC estimates) or 1.55 days per year (Contractor estimates).
- It is recommended to develop methodology for adding to the MG system cost benefits the monetized value of associated economic development and job creation for the community.
- It is recommended that the City of Utica and the Oneida County will be the combined owner of the MG system. After the approvals, the City/County will select the system developer/operator through a competitive bidding process.
- It is recommended to proceed with the project implementation.
The major barriers to implementation of the MG system that need to be overcome are:
- Obtaining close cooperation of the electric utility and engage them as a partner. The utility has to provide points of common coupling of the MG system with the existing utility feeders, provide a permit for interconnection of the MG system to the utility feeders at points of common coupling, and interconnect and interface the control and communication systems of the utility and the MG.
- Limited experience of the City/County with development of community energy systems. This barrier will be overcome during the second stage of the project by demonstrating to the City, County, and community at-large of the benefits of the MG system.
- Uncertainty of the potential regulation by the PSC of electric sales by the MG owner to its customers. It is assumed that the PSC will clarify this issue by the time the MG system should be constructed. The MG hot water district heating system is not subject to regulation in New York State.