Translating DER and Microgrid Complexity into Simplicity & Bankability

Sept. 21, 2018
The California Energy Commission wants to make microgrids more bankable. But to do so it must first translate DER and microgrid complexity into simplicity.

The California Energy Commission (CEC) wants to make microgrids more bankable. But to do so it must first translate DER and microgrid complexity into simplicity.

That’s the aim of a $2 million grant that the commission awarded to the Electric Power Research Institute (EPRI). In turn, EPRI has hired Bankable Energy/Xendee — developer of cloud computing platforms for microgrids — to address a big part of the challenge: creation of a software platform that allows DER and microgrid developers to quantify the costs and value of their projects.

Easy tool that demystifies DER and microgrid projects

“We want a streamlined process, an easy tool that customers from any class can use to assess the value of a microgrid” — Mike Gravely

The researchers want to create an “easy tool” that demystifies DER and microgrid projects for bankers, investors, developers, utilities, customers and others, said Mike Gravely, CEC research program manager.

“We want a streamlined process, an easy tool that customers from any class can use to assess the value of a microgrid,” said Gravely.

That means developing creative metrics that speak to the banking and investment communities and allow them to feel comfortable investing in DER and microgrid projects, he said.

Evaluating resiliency and reliability poses a big challenge. The commission has asked the military to help create those metrics.

“The needs of the market are always changing,” added Adib Nasle, CEO of Bankable Energy/Xendee. “Before there was a lot of focus on carbon reduction. Now we have resilience, and need to figure out how to evaluate that.”

Nasle’s company plans on developing algorithms that can quantify the benefits of the resilience and reliability provided by DER and microgrids, he said. EPRI awarded $750,000 of the grant to Bankable Energy/Xendee for its work.

But that’s not all that the commission grant seeks to accomplish. Another goal is creating a system for standardizing microgrid design and construction so that each project doesn’t have to be custom, said Michael Stadler, chief technology officer for Bankable Energy/Xendee.

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“At the end of the day, microgrid projects have to make business sense and have to have a solid business case. With the current approach to microgrids, when everything is re-engineered from the ground up for each project, it makes it difficult to see the value with confidence,” Stadler said.

What’s more, developers must now invest hundreds of thousands of dollars into feasibility studies to determine if a project is viable. The Bankable Energy/Xendee system seeks to solve that problem by standardizing the planning process, said Stadler.

“We can create templates and standardize microgrids so they don’t have to be re-engineered with each project. This will take away the soft costs,” said Nasle. For small microgrid developers, the platform could be used to get beyond the planning phase quickly, save money, and convince investors that the project is financially viable.

Creating a known animal for investors

With this type of platform, the microgrid becomes a “known animal” to investors, he said.

Or, as Gravely puts it, “In order to commercialize microgrids, we have to convince the investment community that it’s not just a science project.”

As Bankable Energy/Xendee strives to identify the benefits of DER and microgrids, the company will create a platform that captures the whole value stream, an effort that could result in more renewable energy added to the grid, said Stadler.

“You want to make sure you get renewables on the system, without hurting utilities and the distribution system,” said Stadler. “We want to tackle this. The platform will capture the whole value stream, which will create enormous potential for renewable energy.”

The whole value stream includes demand charge management, load shifting, and ancillary services market participation. It’s also important to place the DER or microgrid strategically to reduce power flow impacts on the utility distribution system, he added.

“Through this approach the utility can also host more renewables at less cost,” he said. In addition, when the Bankable Energy/Xendee platform combines renewable energy with storage technologies and considers DER and microgrid controller concepts in the planning modelling, it can reduce problems — such as power flow impacts — on the utility distribution system, he said.

Gravely added that the project will help industry players develop different DER options and identify their costs to help them decide what’s most cost-effective.

Maximum value and income for energy storage

The project also supports efforts at the California Public Utilities Commission to determine how to use energy storage on the grid in ways that provide maximum value and income. How can a single source of energy storage provide multiple uses,  generate more income for the storage owner and provide more value to the grid?

The idea is to find a way that owners of energy storage units can bid into multiple markets — demand response plus other markets, for example — without over-committing themselves, Gravely explained. If they provide day-ahead bids into multiple markets, a system is needed to ensure that the storage owners can fulfill their bids if the grid needs all of their offerings.

Such a system would open up opportunities for microgrid developers and owners, said Gravely.

“Within a microgrid, you can shift energy around,” he explained. “A microgrid has a single connection to the grid. It could just offer storage or could provide services from the whole microgrid. We want to first work out the details for storage and then add all that microgrids offer.”

Geospatial microgrid economic optimization diagram. Credit: Xendee

End confusion, boost confidence

Overall, the commission hopes to clarify, demystify, and sing the benefits of microgrids and DER.

“The vendors are confused. The bankers have no confidence, and no standard modeling, planning or optimization platform,” said Nasle. “We are bringing that all together.”

Both Stadler and Nasle have extensive experience in distributed energy and microgrid research. Stadler was a staff scientist at Lawrence Berkeley National Laboratory who led the Grid Integration Group, among other roles. Nasle oversaw the integration of EPRI’s distributed energy resources simulation analytics as part of the Bankable Energy/Xendee Microgrid Cloud Computing platform. He helped design and develop the Federal Aviation Administration’s predictive energy management system for the National Air Space critical infrastructure and holds a number of patents.

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About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

Twitter: @LisaECohn

Linkedin: LisaEllenCohn

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