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ETIPP Workshop

Microgrid Options

Tony Jimenez

September 2024

Partnership Project

OFFICE OF STRATEGIC PROGRAMS | GEOTHERMAL TECHNOLOGIES OFFICE | SOLAR ENERGY TECHNOLOGIES OFFICE WATER POWER TECHNOLOGIES OFFICE | WIND ENERGY TECHNOLOGIES OFFICE

DRAFT – DO NOT CITE, QUOTE, COPY, DISTRIBUTE

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Incentive Programs: �Investment Tax Credit (ITC)

  • Available for both behind the meter and front of meter projects (renewable energy, energy storage)
  • The ITC payment is received after the project is placed in service.
  • State, local, & Tribal governments can access the ITC via the “direct pay” provision in the Inflation Reduction Act

Item

(%) of Eligible Costs

Notes

Base Value

6%

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Meet Wage & Prevailing Wage standards

24%

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Meet Domestic Content Requirements

10%

Somewhat hard to qualify for

Energy Community

10%

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Potential Bonus Credits Limited allocations. Need to apply for. Can only use one.

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Low-Income Community

10%

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Tribal Land

10%

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Low Income Economic Benefit Project

20%

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Low Income Residential Project

20%

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Incentive Programs: �Net Metering

  • Applicable to behind the meter systems

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  • Net metering (or the lack of it) is distinct from interconnection.

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  • Net metering is an answer to the question “how much do I get for electricity I send to the grid”

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  • Maine offers two “Net Energy Billing” (NEB) programs. Smaller renewable energy facilities mostly use the “NEB kWh Credit Program”, where any monthly net excess generation is rolled forward as an energy credit on the next month’s bill. Unused credits are forfeit after 12 months. Financially, this is the better option for customers owning systems with annual production not (significantly) greater than their annual consumption. (100% offset or less)

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  • Net metering is available for customer owned renewable energy generation facilities with a rated power (AC) of up to 5.0 MW.

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  • Customers also have the option of “virtual net metering” where net-excess energy production from one location can be credited against the energy bill of another location owned by the same customer.

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Incentive Programs: �Net Metering

Bi-directional meter

Uni-directional meter

(Purchases from the grid)

Uni-directional meter

(Exports to the grid)

Grid

Net Metering

Two-meter System

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Behind the Meter (BTM): General Comments

  • Description: Install some sort of behind-the-meter storage and/or energy generation system to provide electricity during an interruption to a single facility.
  • Advantages
  • This is something an individual building owner can decide to do (or not).
  • Mitigates against all service interruptions (regardless of cause or location of outage)
  • Disadvantages/Limitations
  • System only provides backup power to a single building
  • High capital cost (overall) to do on a broad scale.
  • Discussion
  • Good choice for buildings located towards the far end of spur distribution lines
  • BTM systems often combine energy generation and storage technologies

Meter

Grid

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Behind the Meter: Generator

  • Description: Install a generator to provide backup power during an interruption
  • Advantages
  • Generator capital costs are relatively low (compared to batteries)
  • Generators can cover an extended outage (subject to fuel availability)
  • Disadvantages/Limitations
  • Generator O&M costs are relatively high. This is much less of an issue if the generator is only used for backup (up to say ~100 hours/year)
  • Fuel storage/resupply may limit run time
  • Discussion
  • A generator can be a good complement to a PV-battery system

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Behind the Meter: Battery

  • Description: Install a battery energy storage system (BESS) to provide backup power during an outage
  • Advantages
  • No fuel required
  • Disadvantages/Limitations
  • Relatively high capital cost but incentives are often available to reduce the up-front cost
  • Very expensive to purchase a BESS with sufficient storage capacity to cover an extended outage. (Residences: up to 1-2 days; Large commercial: up to a few hours)
  • Discussion
  • Batteries are best used to cover shorter outages.
  • Batteries are often paired with PV

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Behind the Meter: PV

  • Description: Install a PV system to produce on-site energy
  • Advantages
  • No fuel required
  • Low O&M costs
  • The economics of BTM PV systems can be very favorable, especially for residential and small commercial customers.
    • High energy prices
    • Net metering
    • Availability of incentives such as the Investment Tax Credit (ITC) to help with capital costs.
    • Availability of leasing options for those unable to afford the up front cost
  • Disadvantages/Limitations
  • High, but declining, upfront cost. Generous incentives are available to help with the upfront cost
  • Requires a battery to produce electricity during an outage.
  • Hosting capacity limitations limit that aggregate amount of PV electricity that can be back fed (exported) onto a given circuit.
  • Discussion
  • Versant is installing distribution upgrades (on an ongoing basis) to increase hosting capacity.
  • PV is often paired with a battery. This both ameliorates hosting capacity issues and may enable the battery to cover a longer outage.

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Behind the Meter Case Study: �Deer Isle Town Office PV + Storage

Town Office

Item

Value

Annual Consumption (kWh/year)

19,124

Average Monthly Consumption (kWh/month)

1,594

Avg. Daily Consumption (kWh/day)

52.4

Avg. Load (kW)

2.18

Peak Load (kW)

8.8

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Tariff Customer Charge ($/mo)

$23.11

Tariff Volumetric Rate [Generation + Distribution] (2024) ($/kWh)

$0.242/kWh

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PV Capacity for 100% offset (kWdc)

(Does not account for shading)

~15 kWdc

Note: The southish facing roof has sufficient area to accommodate this.

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Image from Google Maps

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Behind the Meter Case Study: �Deer Isle Town Office PV + Storage

Item

Value

Annual consumption (kWh/year)

19,092

Annual PV production (kWh/year)

19,098

Purchases from Grid (kWh/year)

11,124

Sales to Grid (kWh/year)

11,130

PV energy used onsite (kWh/year)

7,968

PV energy exported to grid (kWh/year)

11,130

The graph and table show the disposition of PV generated electricity for a PV system sized for 100% offset.

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Take Away: Only about 40% of the energy produced by the PV system is used onsite.

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Behind the Meter Case Study: �Deer Isle Town Office PV + Storage

Ballpark Capital Costs [CAPEX] (Based upon national averages)

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  • PV
  • ~$3,300/kWdc (for 10 – 20 kWdc systems)
  • 🡺 CAPEX for a 15 kWdc system: ~$50,000

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  • Storage
  • ~$2,500/kW for a residential-size “2-hour” battery
  • 🡺 CAPEX for a 10kW / 20 kWh battery: ~$25,000

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Behind the Meter Case Study: �Burnt Cove Market

Item

Value

Annual Consumption (kWh/year)

484,120

Average Monthly Consumption (kWh/month)

40,343

Avg. Daily Consumption (kWh/day)

1,326

Avg. Load (kW)

55

Peak Load (kW)

86

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Tariff Customer Charge ($/mo)

$79.19

Tariff Volumetric Rate [Generation + Distribution] (2024) ($/kWh)

$0.125

Tariff Demand Charge ($/kW)

$33.33

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PV Capacity for 100% offset (kWdc)

(Does not account for shading)

~260 kWdc

PV Capacity Roof Can Accommodate

~58 kWdc

Annual production of 58 kWdc system (kWh/year)

76,400

(~16% offset)

Image from Google Maps

Burnt Cove Variety

Burnt Cove Market

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Behind the Meter Case Study: �Burnt Cove Market

Ballpark Capital Costs [CAPEX] (Based upon national averages)

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  • PV
  • ~$2,500/kWdc (for 50 – 100 kWdc systems)
  • 🡺 CAPEX for a 58 kWdc system: ~$145,000

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  • Storage
  • ~$1,530/kW for a commercial-size “2-hour” battery
  • 🡺 CAPEX for a 100kW / 200 kWh battery: ~$150,000

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Front of the Meter: General Comments

  • Description:
  • Install some sort of front-of-meter storage and/or energy generation system to provide electricity during an interruption for multiple facilities.
  • Location: Adjacent to the main distribution line coming down to Stonington. Location close to the main load concentration in Stonington would maximize the resilience benefits
  • Advantages
  • One project can serve multiple facilities, up to the whole island
  • Placement at a central location would improve reliability for majority of community facilities
  • Disadvantages/Limitations
  • Complicated project. The physics is the same as for a BTM system, but the regulatory/economic environment is a different universe.
  • Mitigates interruptions due to outages on the main line. In the case of an outage on a spur line, the folks on the far side of the outage are still out of luck.
  • Discussion
  • Include mainland loads?

Meter

Grid

Meter

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Front of the Meter: Battery

  • Description:
  • Install a large battery to supply all, or a portion of, the Island during an outage.
  • Envisioned total power/energy capacity: 4 MW/8MWh (2-hour) up to 4 MW/16MWh (4-hour)
  • As a “for instance”, one vendor’s products come in 4 MWh increments. Each increment is the size of a 30-foot shipping container and weighs 84,000 lbs.
  • Ballpark capital cost for 4MW / 8MWh: ~$3,400,000 (Does not include any needed distribution grid upgrades.
  • Advantages
  • A community-size battery could provide other valuable services to the local distribution grid, such as voltage control and increased PV hosting capacity.
  • Disadvantages/Limitations
  • This would be a complicated project requiring extensive effort to plan and execute.
  • High capital cost would likely require significant grant funding (of which there is a decent chance of procuring)
  • The battery could not cover entire Island during an extended outage. 16 MWh of energy storage could cover consumption for ~6 hours (at average load). For comparison, the CAIDI is 7.13 hours.
  • This solution does not help when there is a break on a spur line. Facilities on the far side of the break will be without power.
  • Discussion
  • There is the potentially option to site the battery adjacent to a key facility, giving the option to power the Island for a handful of hours or the key facility for an extended period (up to several days).
  • Pending MPUC decision to clarify whether Versant may own the system.

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Front of the Meter: Generator

  • Description:
  • Install a large generator (~4 MW) to provide electricity to the island during an interruption.
  • Ballpark capital cost: $2,000,000
  • Advantages
  • Could cover longer interruptions than a battery (so long as fuel is available).
  • Disadvantages/Limitations
  • This would be a complicated project.
  • Air quality impacts, GHG emissions
  • Fuel storage: 13-14 kWh/gallon 🡺 ~175 gallons/hour to meet average load of 2,367 kW
  • Discussion

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Thank You

This work was authored in part by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy, Building Technologies Office, Energy Transitions Initiative, Geothermal Technologies Office, Solar Energy Technologies Office, Vehicle Technologies Office, Water Power Technologies Office, and Wind Energy Technologies Office. The views expressed in the article do not necessarily represent the views of the DOE or the U.S. Government. The U.S. Government retains and the publisher, by accepting the article for publication, acknowledges that the U.S. Government retains a nonexclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published form of this work, or allow others to do so, for U.S. Government purposes.

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