‘Optimized Microgrid’ at Algonquin College Achieves Positive ROI

July 29, 2016
An optimized microgrid at Algonquin College demonstrates how to showcase sustainability and earn a positive return on investment.

An optimized microgrid at Algonquin College demonstrates how to be a showcase for sustainability and earn a positive return on investment, in this excerpt from our new report “How Microgrids Can Achieve Maximum Return on Investment (ROI): The Role of the Advanced Microgrid Controller.”

Algonquin College in Ontario, Canada is modeling how to become a showcase for sustainability—and earn a positive return on investment—through exploration of a cutting-edge ‘optimized’ microgrid.

With more than 54,000 full- and part-time students, the college is renowned for integrating technology into learning. Its living laboratory of green technologies is designed to not only improve the campus environment, but also serve as an educational resource for students and faculty.

The campus already includes four state-of-the-art green buildings—one which has attained Platinum Leadership in Energy and Environmental (LEED) certification and three others either at or moving toward LEED Gold certification.

In addition, the college recently unveiled a high-efficiency microgrid, with a combined heat power (CHP) plant at its core.

Developed by Siemens, the project has drawn delegations of international visitors to the campus, according to the college president Cheryl Jensen.

The CHP plant is being constructed as part of a long-term strategic partnership aimed at transforming the Algonquin College Campus to a model of energy management and sustainability, which includes:

▶▶Reducing campus energy expenses

▶▶Keeping the power flowing during a central grid outage

▶▶Addressing major deferred maintenance issues

▶▶Offering students and faculty new learning and research opportunities

Next phase in sustainability leadership

The first 2-MW CHP plant is currently in operation. The next phase calls for a 2-MW CHP expansion and adding scaled solar PV, power storage and EV charging stations—all controlled by a new level of software intelligence to create a cutting-edge ‘optimized’ microgrid.

Microgrid Knowledge Special Report on Microgrid Financing – Download it Now

This new Energy Center makes the college a showcase for advanced microgrid control; software intelligence that uses complex algorithms to network on-site generators to each other as well as the campus buildings, and even the outside electric grid.

Developed by Siemens, the controller continuously reconfigures use of microgrid resources based on their availability and energy market prices. It achieves this feat minute-by-minute. In doing so, the controller minimizes emissions, increases efficiency and reduces energy costs.

Perhaps most significant, the project demonstrates how such intelligence brings about an impressive return on investment for the college’s microgrid, in this case a two-to four-year ROI.

By modeling how to achieve microgrid ROI for each individual customer, Siemens is at the forefront of advancing microgrid deployment.

“This project helps solve one of the most daunting issues facing the microgrid industry—how to finance a microgrid,” says Sally Jacquemin, Siemens microgrid business manager.

She points out that because an ‘optimized’ microgrid is a relatively new advancement, enabled by the latest software technology, it is not yet widely understood by investors. They are intrigued, but unsure how to structure a repeatable microgrid package that is able to be monetized.

“By showing how to solve for ROI, this project opens the way for innovation in financing, which in turn will make microgrids more accessible to businesses, institutions and communities,” she says.

Modeling CHP is particularly complex because it couples both power and heat, and has several input parameters.

The modeling details

The financial system modeling called for doubling the CHP plant’s capacity—from two to four megawatts. This gives the college the opportunity to secure all of its power onsite. The microgrid also incorporates solar power, energy storage, demand response, heat recovery, controllable loads, forecasting of load and generation, automated operation and control, and optimal economic dispatch and unit commitment.

While the college will be able to operate entirely off grid, it will only do so at times when a power outage occurs or when being off grid offers economic advantage.

Other times, the microgrid will operate in parallel with the local utility grid, entering into buy or sell contracts based on real-time grid prices. Automatically, and with no human intervention, the microgrid controller will decide the best mix of these resources at any given time.

Examples of some ways the microgrid can derive value include:

▶▶Storing energy in batteries and then using that energy to respond to a demand response event.

▶▶Controlling load in response to market signals. For example, a swimming pool’s energy use is flexible. If demand is low on the microgrid, the microgrid controller may choose to use on-site generators to heat the water. But if the on-site generators are in demand, or if grid electricity prices low, the college may instead tap into the grid for the necessary power.

▶▶Forecasting what is ahead for load and generation. The microgrid can look ahead to determine what mix of distributed generation resources will be most economical based on forecasted fuel prices.

Modeling CHP is particularly complex because it couples both power and heat, and has several input parameters. The controller must decide at any given time if it’s best to operate both CHP units, or just one and then purchase grid power.

“In Ottawa, electricity prices change every hour, so based on near real-time signals, the microgrid controller can decide which energy mix to plan,” says Dino Ablakovic, Senior solutions architect at Siemens.

Determining ROI

Siemens modeling shows the optimized microgrid earning a two- to four-year ROI. Siemens determined the ROI by:

  1. Replicating the customer’s energy usage and costs over a year based on past historical data.
  2. Determining how new generation types (such as CHP) will influence the calculation; for example, how will replacing grid power with CHP influence economics using a simple controller?
  3. Applying an advanced Siemens microgrid controller to optimize the mix, then determining how much money the optimized controller saves versus a simpler, non-microgrid controller.

Siemens also modeled a price for resiliency—the ability to keep the power flowing when the central grid fails. This is an important value because power reliability is a major reason many customers install microgrids; yet determining its value is tailored to each customer and not easy to apply generically across the industry.

Optimized microgrid opens new doors

By moving toward an optimized microgrid, the Algonquin College will create a highly advanced learning lab for its students and researchers. Even more, Algonquin College is helping to open the door for communities, businesses and institutions worldwide that can benefit from this cutting-edge clean technology.

Read more about microgrid financing in our report, “How Microgrids Can Achieve Maximum Return on Investment (ROI): The Role of the Advanced Microgrid Controller,” downloadable at no cost, courtesy of Siemens.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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