Six Keys to Microgrid Success

Microgrids offer a promising opportunity for communities seeking to reduce energy costs, limit greenhouse gas emissions and increase resiliency. States seeking to capture these benefits—including MassachusettsNew York and Connecticut—are offering millions of dollars in financial support for microgrid development. For all their benefits and incentives, however, technical, financial and regulatory hurdles must be overcome to successfully execute a microgrid project.


So, what does it take to see a microgrid project through to completion? What are the pitfalls along the way?
The Boston Redevelopment Authority recently released its Boston Community Energy Study, exploring the potential for “Community Energy Solutions” such as microgrids throughout Massachusetts. SourceOne consulted on three of the four success stories featured in the report. We share six key insights from those projects that will help ensure your microgrid is a success.


1. Collect load data carefully.


Seasonal, monthly, and daily load patterns have significant implications for the size and type of generation technology, which in turn influence financial and energy modeling. The quality of decisions made based on the load data is compounded throughout project, making this a classic case of measure twice, cut once.


Specifically, we recommend collecting hourly data for an entire year for electricity, steam, hot water and chilled water. Monthly data is not granular enough to show important trends.


Quality load data can sometimes be found in unexpected places; it can pay to get creative in your search. The best source of load data may be paper-based plant logs or data from the building management system. Cataloguing and entering this data can be time-consuming, but it will pay dividends in the later stages of the project.


2. Plan for tomorrow, not today.


As with any major investment, implementing a microgrid is about planning for the future as much as the present. Microgrids should be built for the projected needs of its service area or with the flexibility to adapt to them.


Before investing in a microgrid, we recommend conducting a site-wide energy audit to identify potential energy efficiency measures. The impact of these efficiency measures should be factored into projections of the site’s load profile during the microgrid’s lifetime.

As with our first recommendation, this will help lay the foundation for strong decision-making throughout the project.


3. Pick a generating technology that suits your goals.


A microgrid can serve multiple purposes. The generating technology that is installed should reflect your priorities. Are you primarily interested in emission reduction, resiliency or cost minimization?


If resiliency is a priority, the generating technology needs to be dispatchable. The cost of intermittent resources like solar and wind should be levelized to include the energy storage required for dispatch.


Many of our most successful projects rely on highly efficient combined heat and power (CHP) plants. There are several CHP prime movers—steam turbines, reciprocating engines, gas turbines, fuel cells, microturbines—each appropriate in different application contexts. A critical criterion for choosing the right technology is matching the site’s power-to-heat consumption ratio with the CHP technology’s power-to-heat output ratio (yet another reason quality load data is critical).


Of course, hybrid systems are also a possibility, mixing and matching renewables and conventional generation as necessary. The important lesson is not to be overly prescriptive. Enter the evaluation process with an open mind and choose the technology or technologies that meet your needs.


4. Engage stakeholders early and often.


For such questions there is no right answer, but there is a wrong answer—ambiguity. We recommend approaching this challenge head on. Define roles clearly and early, learn from experience and revise as necessary.Building a microgrid can involve a lot of stakeholders—the generator owner, the city or town, electric company, gas company, existing utility customers, regulators, etc. Collectively, these stakeholders must find answers to a series of questions that satisfy all parties involved. That includes divvying up responsibilities such as: Who operates the microgrid? Who owns it? Who is responsible for electric reliability and power quality? how are maintenance and operating costs shared?


5. Plan proactively for your utility interconnection.


Microgrids are able to operate in island mode, independent of the larger electrical grid. Island mode is critical during major outages because it enables microgrids to offer self-sufficient power supply, adding resiliency. When the system is operating normally, however, the micro and macro grids can operate more flexibly when they remain connected.


To connect generation in parallel with the electrical grid, permission must be granted from the local distribution company. The permitting process can take over a year, so the application process should begin as soon as possible—usually when the generating technology is chosen.


6. Incorporate utility rate forecasts into your financial and energy models.


The savings from installing a microgrid depend on the cost of energy displaced by the microgrid. This in turn depends on the when the microgrid is generating. A flat utility rate is usually not detailed enough for the energy and financial models to be produce accurate outputs. Your consultant or engineer should be as skilled in utility rate forecasting as they are in energy systems analysis and project management.
Microgrids require careful planning if they are to deliver on their promise. Following these lessons learned from experience can guide you to success.


Want to learn more? Contact SourceOne at 800.510.4485 to speak to an energy expert.