Tying a microgrid to the smart grid

Building owners frequently integrate the utility's smart grid into their buildings to reduce electricity use and increase energy efficiency. Microgrids can further lower costs and raise reliability for owners and the surrounding communities.

By Kevin Krause, PE, LEED AP, Affiliated Engineers Inc., Madison, Wis. December 12, 2016

Learning objectives

  • Learn about smart grids, microgrids, and related concepts.
  • Identify key considerations for integrating smart grids and microgrids into nonresidential buildings.
  • Recognize key considerations for facility owners, engineers, and contractors looking to integrate smart grids and microgrids into nonresidential building projects.

The need to transform the nation’s aging electrical grid to enhance reliability and sustainability is increasingly imperative as the existing grid becomes outdated and unable to support or withstand current needs and risks. The fundamental concepts behind microgrids do not vary much from typical campus-scale power-production models that proliferated throughout the mid-20th century, which include paralleled local and utility generation with the ability for local generation to sustain a portion of a campus. However, the drivers for their application and the smart technologies available to support them continue to evolve.

Smart grid and microgrid defined

The terms "smart grid" and "microgrid" often become interchanged, inviting a variety of different understandings. Defining these systems by scale and function will help navigate their interrelation and set a basis for how to apply them.

A smart grid is an intelligent and integrated system of interregionally connected electric utilities, consumers, and distributed-energy resources (DERs). This evolving form of electrical transmission uses advanced metering, monitoring, management, automation, and communication technologies to provide reliable two-way delivery and consumption of electric power. Real-time flow of essential information among grid components assures effective, efficient operation for generators, distribution system operators, and end users. A smart grid optimizes two-way traffic on the grid.

A "microgrid" is a localized electrical network that allows campuses and other similar-sized districts to generate and store power from various DERs including renewable electrical generation sources, such as wind and solar, providing the ability for end users to function in isolation from the grid. Balancing supply-and-demand resources-including thermal and electrical loads-within its defined boundaries, a microgrid system provides resiliency (see Figure 1). A microgrid can operate as an "island" or independently from the larger utility grid as required, for example, during extreme weather events or at times when self-generation is more cost-effective (see Figure 2). With the design of distributed generation on many campuses dating back decades, microgrids have existed before the term was coined. However, what has changed is that now there is a smarter interface that makes the supply and draw of power to and from the grid more efficient, resilient, flexible, and sustainable.

The purpose of electrical transmissions systems in the U.S. traditionally has been to distribute electricity from large utility-scale generation plants to loads, i.e., consumers. Comparing it to the transportation network of vehicular traffic, the transmission system is the interstate system while local distribution consists of
roads and streets. The safety systems are traffic controls. The variability of economic market forces, an increase in climate change, and natural and human-
made disasters demand the grid to support large-scale and local generation and distribution. Effectively, every lane of the grid superhighway now must go in both directions, subject to instant reassignment and change. A smarter electrical transmission system supports the technical, financial, and regulatory requirements for microgrid development.

Experience with microgrid projects has shown the areas essential to successful analysis, planning, and implementation to include:

  • Identifying needs and drivers
  • Developing functional requirements
  • Developing system topology and operation
  • Considering technical, regulatory, and financial outlooks
  • Proper commissioning, start-up, and operation.

Identifying microgrid needs, drivers, and functional requirements

Campuses, municipalities, and other similarly sized regional areas choose to develop a microgrid for a variety of reasons, including resiliency, economics, flexibility, sustainability, and reputation. At the beginning of each project, it is important to discuss and determine the drivers that influence implementing a microgrid in a specific region.

With the increasing occurrence of natural disasters, such as Hurricanes Sandy and Ike, as well as the potential threat of human-made disasters and impact from population growth in susceptible areas, institutional leaders and private enterprises are seeking ways to make the electrical grid capable of withstanding these types of events. Resiliency to maintain operations during such crises, and to have greater control throughout, is a driving requirement for microgrid implementation. Mission critical functions likely to be supported by a microgrid include health care, research, financial operations, data centers, or providing refuge. A robust and flexible electrical generation and distribution network must allow for these operations to continue functioning 24/7 throughout the year to maintain life or prevent loss of critical data. The system equipment and design must be self-healing and support recovery efforts to get facilities and campuses back up and running following such tragedies.

Many cities and regions see microgrids as a possibility to create economic growth or better maintain financial stability. As part of a microgrid analysis, it is important to evaluate the mix of varying energy strategies, generation sources, and fuel types and to develop concepts that will provide clean, efficient, economic, highly reliable, and locally controlled power and thermal energy. With this type of infrastructure in place, cities and regions can increase the recruitment and development of high-technology businesses, research and development centers, data centers, and similar enterprises key to job creation and economic growth. The recent advantageous price of natural gas as well as advances in renewable energy integration and controls are making microgrids more economically feasible to construct and operate, thus increasing their rate of implementation. Microgrid planning must include investigation of potential power purchase agreements and credits that can generate additional revenue or provide more options for campuses and municipalities to buy power, so they can balance a power portfolio and allow a microgrid to maximize its use and timing of resources for greatest efficiency and economy.

Advances in renewable energy integration allow broader deployment of renewable energy sources and storage technologies as part of a microgrid strategy. Proper analysis and inclusion of these in microgrid planning efforts allow campuses and municipalities to meet stated carbon reduction or neutrality goals as well as to reduce greenhouse gases resulting from traditional energy-generation processes.

The U.S. Department of Energy (DOE) is at the forefront of energy-integration research. At the National Renewable Energy Laboratory in Golden, Colo., the Energy Systems Integration Facility (ESIF) uses a megawatt-scale research electrical distribution bus and smart hardware-in-the-loop prototyping to validate technologies and techniques that advance the interconnection of distributed energy systems and the seamless integration of renewable energy technologies into the grid. Affiliated Engineers Inc. planned, designed, and engineered ESIF’s primary research areas and laboratory systems, focusing on the research electrical distribution bus interconnecting plug-and-play testing components, hydrogen research exploring simpler and more scalable energy storage, and fuel cell and cell component development. A safety- and data-integrity-driven supervisory control and data acquisition system deploys hardware-independent software to govern the array of function-specific control systems and disseminate real-time data to principal investigators collaborating worldwide. The knowledge gained from this research, as well as other ongoing research and development of new microgrid technologies, informs design professionals of the capabilities of microgrid advances and the planning and development necessary for their success.

While developing microgrids, initial feasibility analysis of the potential energy sources and distribution systems that may meet the specific needs of a given project should be completed. Basic steps include identification of equipment types, equipment sizes, technical challenges, and basic system approach. Analysis typically includes a simple financial analysis of initial installation costs, potential operational costs savings, and payback durations on investment. The purpose of the initial analysis, often spreadsheet-based or using specialized software-such as the Distributed Energy Resources Customer Adoption Model (DER-CAM) as developed by DOE’s Lawrence Berkeley National Laboratory-is to rule out nonviable options and set the stage for solutions that will be technically and financially viable to support the intended performance goals for the microgrid.

Developing microgrid system topology and operation

As the development of a microgrid concept advances, it is critical to identify various possible operational modes of the given system. With the complexity of the system being analyzed implicit, the number of possible system configurations is substantial. To fully understand the intricacies of each configuration or mode and the transition between modes, a matrix of generation and load configurations should be developed. State diagrams provide a clear snapshot of each operating mode (see Figure 3). Using transitional analysis and fault-clearing analysis, the design engineer can identify the required safeties, communications, and sequences of operation required for smart microgrid operation.

Potential modes or configurations of microgrid operation include:

  • Grid mode-local generation is connected to the utility grid and operates in parallel
  • Intentional island mode-local generation is deliberately disconnected from the utility grid and can operate independently. Generation is typically sized to support the total load of the microgrid.
  • Emergency island mode-local generation is disconnected from the utility grid following a grid outage and can operate independently. Generation may or may not be sized to support the total load of the microgrid. Load shed may be required.
  • Load-shed mode-turning off load/demand response to prevent failure of a system when demand exceeds available generation
  • Power-purchase-only mode-all loads are being supplied completely by power purchased from the utility. No local generation is operating.
  • Power purchase and self-generation mode-loads are being supplied by a mix of power purchased from the utility and local generation
  • Power-export mode-loads are being supplied completely by local generation, and there is excess power from local generation being sent back to the utility grid
  • Micro-renewable generation-microgrid installations comprised of less than 50-kW electrical or less than 45-kW thermal resources
  • Multiple versus single utility feed-system is considered single or redundant utility feeds for resiliency
  • Varying self-generation dispatch-local generation is turned on or off, or power output is adjusted based on a number of factors that may include load matching, optimized source selection, economics, or redundancy
  • Storage dispatch-local energy-storage devices are placed in energy-collection, generation, or idle mode based on whether there is an excess or shortage of local or utility generation.

A number of events can affect the operating mode of the microgrid. Anomalies that must be investigated and planned for include:

  • Utility loss
  • Generation asset loss
  • Transformer lossFeeder loss
  • Switching-node loss
  • Momentary utility-voltage sag/brownout
  • Utility underfrequency event
  • Momentary utility loss
  • Sustained utility loss
  • Fuel interruption
  • Resynchronization to the utility.

Distributed generation (DG) that uses a microgrid allows any combination of local fuel-based or renewable energy sources, such as natural gas generators, microturbines, fuel cells, solar photovoltaic (PV), distributed wind, and combined heat and power (CHP) cogeneration systems, to serve the loads of a facility, campus, city, or another defined district. Often implementing renewable energy sources or energy-production technologies with less environmental impact than the power produced by a traditional central power plant, DG is more efficient in transmission to its nearby served loads.

A typical foundation of many microgrid systems is a CHP source comprised of a natural gas combustion turbine generator. This form of cogeneration generates electricity with the combustion turbine and captures wasted heat using a heat-recovery steam generator (see "Putting combined heat and power to work" on page xx). The steam can be used for heating buildings, operating chillers, supplying other process loads, or additional power generation by the use of a steam turbine generator. CHP can save facilities considerable money on their energy bills due to its high efficiency and provide a hedge against electricity cost increases. Depending on the technologies implemented, CHP systems can typically achieve total system efficiencies of 60% to 80% for producing electricity and useful thermal energy. This is a great improvement over the average efficiency of fossil-fueled power plants in the U.S., which is 33%.

Fuel cells provide another CHP source to consider, because of their smaller carbon footprint as compared with traditional CHP, with operating efficiencies that can achieve rates greater than 95%. Affiliated Engineers Inc. has evaluated a number of fuel cell applications, including their consideration in the distributed power-generation analysis for a microgrid in North Carolina, which, in addition to fuel cells, also included exploring rotary motor/generator units, flywheels, and batteries for uninterruptible power. Fuel cells are not in widespread use primarily due to their first cost, but as production of these systems increases or as alternative funding/buy-back arrangements are developed, their installations may become more economically viable.

The extent of renewable energies, such as PV or wind turbines, connected to the grid is increasing. Production from these renewable technologies is subject to weather conditions. For those times when the renewable source is not producing energy, the utility, local fuel-based generation assets, or stored energy must be available to carry the load. As more DG sources connect to the grid and supply power, multiple forms of storage will be necessary to ensure that loads can be served reliably at any time. Evolving storage options include flow batteries, which offer virtually unlimited longevity by pumping externally stored liquid (electrolytes) to create electrical current, and hydrogen electrolyzers, which convert electricity to hydrogen for storage. In turn, hydrogen can supply fuel cells and offers advantages over batteries, which must be electrically recharged. As smart buildings and even smart vehicles interconnect with the grid, over time, they too may be able to store and return power by virtue of their batteries. For example, their onboard controls’ ability to automatically control when a vehicle is charging or using the batteries may power the grid based on predictions of occupant behavior.

Smart buildings can improve the operation of a microgrid by which they are served. As load centers in a given locality, buildings that are technologically enabled to monitor their own energy consumption can be further enabled to reschedule certain power usage to off-peak hours, improving the overall efficiency of a microgrid. These intelligent buildings also can monitor and adjust building performance to reduce load and bolster cost savings.

Tying a microgrid to the smart grid

To respond fully and most effectively to the need for more sophisticated demand-and-supply monitoring and control, electrical energy management must be addressed. Increased monitoring and reporting of actual demands and behaviors of the end user, as well as further educating the end user on the amount and pattern of their electrical usage, is essential. There are elements of personal privacy that must be considered and a certain level of user-maintained control over the collection, use, reuse, and sharing of personal information that must be protected. Without this knowledge being collected, however, electrical energy suppliers delivering to the grid are challenged to meet demand or adjust to greater fluctuations in demand due to optimized facility operations or the variable nature of many of the distributed renewable energy sources being interconnected. With a more sophisticated smart grid, concurrent data across users and generators will allow for additional demand control, adjustment, or curtailment, with the goal of changing behaviors of consumers. If a user is better informed of the impact and cost of using energy during peak times, they could be more inclined to adjust the time when they run a given appliance or charge such devices as portable electronics or electrical vehicles.

A number of groups have been working on developing standards to integrate control and communication technologies into the grid. These include ASHRAE and the National Electrical Manufacturers Association-who jointly sponsored development of Standard 201P: Facility Smart Grid Information Model-as well as The Smart Grid Interoperability Panel (SGIP), a public-private partnership originally established by the National Institute of Standards and Technology, who saw the standard through to release and approval in May 2016. The model facilitates integration of objects and actions within the electrical infrastructure, such as onsite generation, demand response, load control, load shedding, submetering, load prediction, and energy storage. Standard 201P promotes the effectiveness of smart facilities, supporting the optimum functionality of a national smart grid.

Advanced power electronics and communication technologies increasingly enable large numbers of DG sources to link to the grid through highly controllable power processors, allowing efficient and reliable distributed power delivery during regular grid operation and powering specific islands in case of faults and contingencies, such as the natural disasters mentioned previously. SGIP also has been instrumental in developing IEEE P2030.7: Standard for the Specification of Microgrid Controllers (requires membership to read), which speaks to the technical issues and challenges associated with the operation of a microgrid and presents control and testing approaches for safe system operation.

Power electronics facilitate the efficient and seamless conversion of dc to ac power and vice versa. An example of the scale of such power electronics is the multiple-megawatt solar inverters required for utility-scale PV power stations installed in places like Southern California. These inverters have been developed to maximize allowable dc string voltage and tested to meet requirements of NFPA 70: National Electrical Code (NEC) Articles 690.11 and 690.12 for dc arc fault protection and rapid shutdown, as well as IEEE 1547: Standard for Interconnecting Distributed Resources with Electric Power Systems (requires membership to read) standards for voltage and frequency response and UL 1741: Standard for Inverters, Converters, Controllers, and Interconnection System Equipment for Use With Distributed Energy Resources (requires purchase to read). Utility interconnection constraints are stipulated by the IEEE 1547 standard. The limitations outlined therein relate to power quality and the impact of microgrids on a commercial power utility and, subsequently, its customers.

Utility interconnection rules are defined and regulated by individual state jurisdictional bodies referred to as public utility boards, public service commissions, and consumer utility boards. The IEEE 1547.4-2011 utility interconnection standards were specifically updated to accommodate microgrids and their unique frequency stability issues along with synchronization requirements. With the number of distributed-generation sources, storage, and loads connected in a microgrid, the system frequency becomes a bit more challenging to control in situations such as the transition from grid mode to island mode. High-speed microgrid switches have been developed by many manufacturers to handle these transitions and protect critical loads connected to a microgrid from power-quality anomalies by quickly isolating from the utility grid. It is critical that the specific utility-interconnection requirements in effect at a specific project site are understood and analyzed for their impact on the possible microgrid solutions.

As any project is being evaluated for a microgrid, redundancy of local distribution systems and the optimal location of generation sources and utility interconnections must be investigated to be optimally configured in support of microgrid goals. Techniques that can be applied include loop distribution in place of radial, primary selective distribution, redundant feeders, and strategic placement of fuel-based generation and storage infrastructure. These concepts and technologies are building blocks of successful microgrid and smart-grid design.

Fundamental considerations in a microgrid-development process

Several aspects of planning are universal to the development of a microgrid, regardless of location. Utility and other regulatory statutes, initial capital investment, rate structures, future cost of fuel, environmental permitting, technical limitations of available distributed-generation technologies, and sheer complexity of the systems being evaluated must be weighed simultaneously and reconciled.

Regulatory and financial outlook

Policymakers, regulators, and grid operators are at the beginning of new rules that will govern the next phase of microgrid development and operation. Many states and localities have yet to cross the bridge of what a microgrid might mean to their regions. Existing utility regulations originally were intended to protect the consumer and the supplier, but the relationship between utility operators and microgrids is largely undefined. These anachronisms can make the reality of a microgrid very difficult in some areas. The northeast portion of the U.S. is leading reform efforts to increase resiliency to natural disasters. Ongoing policy discussions play a critical role in the siting, interconnection/demarcation, utility franchise rules, financing, and regulatory approvals necessary for any microgrid development. Facility owners, engineers, and contractors must be prepared to work through these potential hurdles to arrive at systems that can ultimately be constructed and operated.

Microgrid development can be expensive, depending on existing utility grid infrastructure and rates in a given region. The investment payoff is directly related to the operation of the assets. Microgrids have a high rate of financial success in areas with high electricity prices. Onsite generation, possibly in conjunction with energy storage, can be used to avoid peak energy costs and even create revenue streams by selling energy back to the grid when price signals justify it economically. Enrollment in DR programs can be regarded as a means not only to reduce energy costs but also to generate revenue by reducing the load on the utility grid. DR can be provided by self-generation and curtailing loads. Electricity prices, fuel prices, financing costs, equipment costs, government incentives, loss revenue, and public-private partnerships play a role in the financial valuation of a microgrid. These options must be evaluated as part of any microgrid analysis.

Technological outlook

In addition to regulatory and financial factors, still-evolving technologies pose challenges to microgrid development. While basic technology of generation sources, switchgear, and paralleling controls exist to support microgrid generation and distribution, improvements can be made in the reliability of components, two-way communications, dc-distribution components (such as overcurrent devices and isolation switches), inverter technologies, and standardization of components for efficient rollout in microgrid applications. While dc distribution has not been that prevalent in today’s society, the ability to remove some of the dc-to-ac-to-dc power conversion is certainly another area for efficiency gain in facilities, such as data centers, where a large amount of electronic equipment operates on dc. Establishing utility and vendor engagement early in the microgrid planning process is critical to identifying and compensating for emerging technologies and modernized regulations.

From start to finish on any potential microgrid project, the facility owner, design engineer, and contractor must consider integration, communications, renewable energy sources, regulations, safety, financial impacts, varying project stakeholders, and more. As these considerations find further application together, we will see continuing evolution of a smarter, more resilient utility grid, and a new energy future-one microgrid at a time.


Putting combined heat and power to work

Implementation of 15 MW of onsite combined heat and power (CHP) to supplement outside electrical utilities was a central component of Affiliated Engineers Inc.’s approach to strengthening utility systems at the University of Texas Medical Branch (UTMB), Galveston, in the aftermath of Hurricane Ike. The hurricane flooded more than 1 million sq ft of campus buildings to depths of 6 ft, interrupting and damaging electrical infrastructure, emergency generators, and natural gas service, as well as chilled water, municipal water, and sewer distribution.

Rather than replacing in kind, Affiliated Engineers Inc. and UTMB established an approach that would protect utility sources by elevating boilers and chillers or protecting them with floodwalls, supplement outside electrical utilities with 15 MW of onsite microgrid CHP, and replace much of the existing steam system with a more resilient and efficient district hot-water system (see Figure 4). CHP islanding capability will reduce the threat of hurricane disruption to UTMB operations. With 50% more efficiency than conventional systems, UTMB’s two new CHP plants also will save approximately $3 million annually, with a 5-year simple payback. The 7.5-MW east plant is elevated 18 ft above ground level (30 ft mean sea level), and includes two 3,550-ton electric centrifugal chillers, a 5.5-MW gas combustion turbine, a 2-MW condensing-extraction steam turbine, a 75,000 lb/hour heat-recovery steam boiler, one 1-MW diesel engine-driven, black-start generator, and 2 million gallons of chilled-water thermal storage. Hardening of the existing west plant included a 5.5-MW gas combustion turbine, two 1-MW diesel generators, a 75,000 lb/hour heat-recovery steam generator, and a 2-million-gal thermal storage tank (see Figure 5). The entire existing plant, CHP, and thermal storage will be protected by a 14-ft (20-ft sea level) floodwall.


Kevin Krause is a principal with Affiliated Engineers Inc. With expertise in electrical systems for the energy and utilities and industrial test markets, he was the project manager and designer of the Research Electrical Distribution Bus at the DOE’s National Renewable Energy Laboratory.