World-Gen Nov/Dec 2018

WORLD-GENERATION NOVEMBER/DECEMBER 2018 21 PERSPECTIVE en grassroots project, the 940-kW solar system is designed to cover the current peak demand of 450 kW, currently sup- plied by diesel generation at 60 cents/ kWh. The goal is to get off diesel, since the fuel has to be flown in. Residents expe- rience 24 hours of sunlight during sum- mer months and none in the winter months. There is no process for selling power as an independent power producer in the Yukon, so an agreement to sell power to the local utility, ATCO Electric Yukon, was necessary. A 25-year contract was a key component, with a guaranteed price and market certainty, established ownership and operational requirements of system components. The solar system design is suitable for minus 67 degrees Fahrenheit. A single axis tracker and bifacial panels failed to provide enough sunlight so back-to-back panels with east/west tracking were designed. The microgrid also includes bat- teries, diesel engines and a controller. Because the panels would be built on per- mafrost, insulation boards were laid down on the permafrost since the top three feet become slush in the summer months. The project will be completed in May 2019 for a total capital cost of $6 million. The Government of Yukon announced in August 2018 a $500,000 investment in the system. The Canadian government con- tributed over $2.6 million. Loans will cover additional costs. Approximately 40,000 gal- lons/year of diesel will be offset and reve- nues of $400,000/year are expected. Huang Lu, director of energy storage systems at Canadian Energy, described the microgrids being developed for indus- trial agriculture in Canada which are pro- viding alternatives to the transmission grid. In the case study Lu presented, the 500-kW solar PV array plus a centralized battery storage capacity of 770 kWh and diesel generator backup are providing resilient and redundant off-grid power and are minimizing global greenhouse emis- sions generation. Lu said each agricultural of three barns has its own storage supplied by the central energy storage system. Power is distributed through the storage system to each barn as well. MICROGRIDS NEED GOVERNMENT HELP Patrick Morand, a regulatory attorney with Duane Morris LLP, asked the ques- tion, who should pay for microgrids? Individual US states have different regula- tory structures for community microgrids that interface with utilities and these structures may impact their financing. A little more than half of state utilities remain monopoly institutions. Less than half of them have retail competition. Morand added that a regulatory frame- work for microgrids hasn’t been invented yet. Alabama Power’s Smart Neighborhood Project serves 62 new high efficiency homes tied to new microgrids and the local distribution grid. In Illinois Commonwealth Edison’s new Bronzville Project will serve ten com- munity facilities, police headquarters, health clinics, schools and public works. The US Department of Energy chipped in $5 million toward the $25-million cost, and Com Ed rate-based the remaining costs with the approval of the Illinois Public Utilities Commission. Com Ed will not own the generation. The utility bid out the project and has agreed to develop more projects with others. Baltimore Gas & Electric is building public purpose microgrids, but the Maryland Public Service Commission told them they could not rate-base the projects. Morand concluded that significant contributions from state and federal agen- cies along with in-place policies are need- ed for microgrids to get built. States have rejected projects without significant con- tributions from state and federal agencies. He said he did not find a microgrid that was entirely owned by a community. MICROGRIDS AS A SERVICE Jim Dodenhoff of IPERC discussed “Microgrids as a Service” or MAAS, as a way of overcoming microgrid deployment hurdles. It is a new trend in project owner- ship which has shifted from 92% of microgrids owned by end users to 44% in 2017. Third parties now own 46% of microgrids, he said, with utilities owning 4% of the microgrids being built. A MAAS module incentivizes opera- tions and maintenance optimization. A third party covers all ancillary services costs and sales of the power and builds the project. All elements of the power purchase agreement are provided by the investor who also provides the funding. MAAS providers are driven to retain- ing institutional memory. Contracts can include O&M performance metrics with a financial kickers and penalties if the proj- ect fails. This illustrates how the market is becoming more complex, Dodenhoff told the audience, and energy storage is becoming a standard element of that mar- ket. Meanwhile, investors are becoming more comfortable with microgrids being built “on someone else’s nickel” Dodenhoff said. Risk is transferred to MAAS and the host can focus on his or her core business. Resiliency is foundational to microgrids. It can solve some reliability problems but not all of them. The MAAS owner has motivation to stick around and follow the life of the microgrid since a new technology cannot operate if the supplier goes away for a year, says Dodenhoff. Dodenhoff said he is encouraged by the reoccurrence of a more holistic approach and to managing load first with energy efficiency initiatives. MICROGRID MARKETS EXPANDING CONTINUED FROM PAGE 4