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NYSERDA – Microgrids for Critical Facility Resiliency in New York State

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NYSERDA – Microgrids for Critical Facility Resiliency in New York State Microgrids for Critical Facility Resiliency in New York State Final Report December 2014 Report Number 14-36 Microgrids for Critical Facility Resiliency in New York State Final Report Prepared for: New York State Legislature Albany, NY Prepared by: New York State Energy Research and Development Authority (NYSERDA) Albany, NY and New York State Department of Public Service (DPS) Albany, NY and New York State Division of Homeland Security and Emergency Services (DHSES) Albany, NY NYSERDA Report 14-36 December 2014 Notice This report was prepared by the New York State Energy Research and Development Authority (NYSERDA), the New York State Department of Public Service (DPS), and New York State Division of Homeland Security and Emergency Services (DHSES) (hereafter the "Sponsors"). The opinions expressed in this report do not necessarily reflect those of the Sponsors or the State of New York, and reference to any specific product, service, process, or method does not constitute an implied or expressed recommendation or endorsement of it. Further, the Sponsors and the State of New York make no warranties or representations, expressed or implied, as to the fitness for particular purpose or merchantability of any product, apparatus, or service, or the usefulness, completeness, or accuracy of any processes, methods, or other information contained, described, disclosed, or referred to in this report. The Sponsors and the State of New York make no representation that the use of any product, apparatus, process, method, or other information will not infringe privately owned rights and will assume no liability for any loss, injury, or damage resulting from, or occurring in connection with, the use of information contained, described, disclosed, or referred to in this report. The Sponsors make every effort to provide accurate information about copyright owners and related matters in the reports they publish. If you are the copyright owner and believe a NYSERDA report has not properly attributed your work to you or has used it without permission, please email [email protected] ii Foreword This report, along with previous research on microgrids by the New York State Energy Research and Development Authority (NYSERDA)1, provides information on the challenges facing microgrid development in today’s utility environment. Specifically, it examined five case studies and took a focused look at the use of microgrids to support mission critical functionality - generally at facilities which already had backup generation installed. Highlights are: • In the particular scenarios examined, the economic case for reconfiguring resources into a microgrid was made challenging by the facilities’ existing as-built status, and the primary focus on mission critical functionality. • Microgrid investments may provide important value streams for which there are presently no mechanisms to compensate microgrid or distributed generator owners for distribution-level ancillary services and transmission and distribution investment deferral or other socially important benefits –such as reduced environmental consequences. This may result in the underutilization of otherwise economically feasible options and reduces the potential revenue streams that could be used to fund investments in microgrids. These issues will be examined by the Public Service Commission as part of its “Reforming the Energy Vision” (REV) initiative. • A useful cost benefit analysis tool was developed as part of the study, but a more expanded version of a benefit cost model should be developed that will satisfy the need to account for the full spectrum of costs and benefits associated with microgrids in a REV environment. • Technology development is required to reduce the costs of engineering the microgrid, specifically the control systems and electrical infrastructure necessary to balance supply and demand that currently result in elevated system costs. • There is a need to develop standard models/approaches to ensure effective microgrid integration with existing utility distribution networks, particularly for more complex microgrid configurations (e.g., multiple distributed energy resources (DER), multiple points of common coupling with the utility system and/or connection to urban secondary networks). Next steps are: While easing some of the hurdles to microgrid development raised by the study depend on regulatory reforms through REV, continued research into technology evolution, testing and adoption is necessary. Achieving long-term clean energy goals and other REV objectives will require a scaling up of efforts to improve end-to-end system efficiency and development of new customer-to generator-to utility transaction models. Increasing resiliency will require expanded options to island portions of the grid using DER and advanced controls. There is progress to report already. NYSERDA, through its Smart Grid Research program, is currently funding research in partnership with utilities on the integration of DER for urban networked systems through a large demonstration project in New York City. Additionally, several other rural/suburban microgrid design efforts are 1 Microgrids: An Assessment of the Value, Opportunities and Barriers to Deployment in New York State; NYSERDA Report 10-35, September 2010, Center for Energy, Marine Transportation and Public Policy at Columbia University. iii being supported including two projects, in Potsdam and Buffalo, which have also been awarded significant funding from U.S. Department of Energy to develop and demonstrate microgrid control systems, whose lack thereof was identified in the Study as impeding development of community based microgrids. The electric utilities in New York represent the full suite of distribution network configurations (rural radial, suburban loop, and urban network) and provide the perfect proving ground for new technologies. A new request for research proposals under NYSERDA’s Smart Grid Research program will provide additional opportunities for developing technologies essential to building the new energy ecosystems that REV envisions for New York. Finally, NYSERDA in partnership with the Governor’s Office of Storm Recovery will launch the NY Prize Community Grid Competition to support developing community microgrids aimed at improving the local distribution system performance and resiliency. Picking up where this study left off, NY Prize will leverage the knowledge of incumbent utilities about their system conditions with the creativity of community members to encourage broad customer participation, protect vulnerable populations and provide tools for building an efficient, cleaner and more reliable local-scale energy system. Several local community microgrids grids are expected to be built through NY Prize where REV principles could be tested. The outcomes from this Critical Facility Resiliency Assessment, taken in the proper context, coupled with ongoing NYSERDA and utility sponsored smart grid research supported through a strategically administered Clean Energy Fund (CEF), will fully reinforce a vibrant REV “ecosystem” across New York State. iv Acknowledgement NYSERDA would like to express its deepest appreciation to everyone who provided the project team with the information and diligent effort over the last year and a half to complete this report. Special gratitude goes out to our internal team at NYSERDA, John Love, John Saintcross, Mark Torpey, Erin Hogan, Karl Michaels, and James Hastings; at the New York State Department of Public Service, Michael Worden, Tammy Mitchell, and Ben Dunton; and at the New York State Division of Homeland Security and Emergency Services, Brian Wright and especially Chuck Phillips whose tireless and demanding pursuit of an excellent work product was commendable. A special thanks goes to a host of others in all three of these organizations who provided encouragement, edits, suggestions, and guidance that significantly enhanced the final report. We would also like to acknowledge the crucial role of the organizations that developed the individual pieces of this report. This effort was lead by Pace University’s Tom Bourgeois, with a special thanks going to Jordan Gerow and Nick Martin who provided information for the legal, regulatory, ownership model, and funding sections and coordinated all of the writing of this report. Thanks to General Electric Energy Consulting group led by Sundar Venkataraman and included Bahman Daryanian, Lavelle Freeman, Matt Lecar, Ray Piasecki, Suresh Gautam and Slobodan Matic, who developed all of the technical microgrid designs for the five County sites. Thanks to the Electric Power Research Institute’s Arindam Maitra and Tom Short, who did a great job on developing the interconnection section. Thanks to Industrial Economics Corporation’s Brian Morrison, Nadav Tanners, Claire Santoro, Chris Smith, and Cynthia Manson, who did amazing work in developing the first-of-its-kind benefit cost analysis model that included New York-specific public benefits. Finally, thanks to the International District Energy Association’s Rob Thornton and Ted Borer for providing the information for the operations section of this report. Furthermore, we would like to thank the many people from the critical facility sites, as well as County and utility company representatives who participated in the study. In Broome County, this group included Brett Chellis, Dave Harder, and Keith Wittig; SUNY Broome’s Barry Peterson and John Ruck; United Methodist Nursing Home’s Chet Lowrie; and New York State
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