Enhancing Resiliency Through Sustainable Microgrids and Value Creation Using Smart Grid Paradigms

By Krishnakumar R. Vasudevan, Vigna K. Ramachandaramurthy, Thanikanti Sudhakar Babu

Resiliency

Power system resilience has become an important factor with ever-increasing natural calamities and manmade threats. According to the US Department of Energy, about 58% of the power outages are the result of extreme weather conditions. On the other hand, the cyber-attacks on the power system pose an additional threat to the resiliency of the power system. A resilient power system should be able to anticipate, withstand and respond to unprecedented contingencies. The prevailing reliability standards of power system are designed to withstand high-probability, low-impact contingencies. However, resiliency targets to withstand the low-probability, high-impact disturbances. Nevertheless, the power system is deemed as critical infrastructure and any damage to it directly inflicts on the country’s economy, since other critical infrastructure depend on electrical power for its operation. For example, a week-long power outage in a region could incur high losses to the telecom industry, which will directly affect the country’s economy.

Sustainable Microgrids

Microgrids are inherently resilient due to its ability to operate disconnected from the grid in case of contingencies and reconnect when contingencies clear. After islanding, the backup generators should take over and continue to supply the load. Historically, diesel generators, microturbines and combined heat and power plants have been used for onsite generation at load centers. However, their operation depends on the availability of fuel onsite, which may not be enough to sustain an extended outage. Moreover, the loss of lifelines, such as pipelines and transportation during natural calamity play a critical role in resiliency. In such cases, a sustainable microgrid with a diverse mix of renewables is key to improve resiliency. A sustainable microgrid could ride through an extended outage, with enough storage to meet the nocturnal demand and stability requirements.

In most countries, grid parity is yet to be attained by the renewables, which makes grid supply a cheaper option. So, the willingness to pay for a high-cost generation (cost of resiliency) with renewables and storage is imperative. Moreover, the level of resiliency is subjective and differs across various sectors and consumers. A residential customer might opt to sustain an outage without power, instead of paying for resiliency. Whereas, the services and production sector demand a high level of resiliency since an outage can incur a huge loss. Moreover, the classical cost-benefit analysis yields a higher net present cost (NPC) of the project which deters the investment on sustainable microgrids. So, appropriate valuing of resiliency and estimation of probable revenue generation would attract investments on sustainable microgrids. Furthermore, accurate sizing of sources and storage by considering factors like load profile, critical loads, probable time and duration of the outage, can reduce NPC.

Value creation through smart grid paradigms

Under normal operation of the grid, the conventional fossil fuel-based generators predominantly remain idle throughout its lifetime. Hence, it does not generate any value during the entire lifetime, besides providing back up supply for a few hours. However, a grid-connected sustainable microgrid can take part in various services to generate revenue through smart grid technologies. Firstly, it is possible to minimize the utility bills through efficient management of onsite generation. The microgrid controllers can be programmed to take part in energy arbitrage by optimally dispatching resources considering the time of use tariff signal from the grid. Under such circumstances, the onsite energy storage plays a vital role, since it could deliver power during peak hours. In a de-regulated market regime, it is possible to further maximize the profit by taking part in the market. Besides the capacity market, a sustainable microgrid with fast responding storages can take part in the ancillary services market. Since the bids cleared in the ancillary services market are often high due to the immediate demand for resources.

Demand response is another smart grid paradigm which allows generating extra revenue by controlling the non-critical loads when required by the utility. However, it is also possible to reduce the grid power consumption without losing any loads, thanks to the power onsite generation. As an added bonus, electric vehicles can further increase the resiliency without incurring on any upfront costs. The argument is backed by the purpose (mobility) for which the EVs are bought. A large pool of EVs can connect to the microgrid and provide its service during idle conditions. However, an accurate estimation of the spatial and temporal distribution of EVs (driving pattern) can affect the cost of resiliency.

Conclusion

The critical infrastructures of a country like a telecom, defence base, water utility and hospitals require highly resilient power system since they are responsible for a country’s economy, social well-being and safety of citizens. With the existing diesel generators and a finite amount of onsite fuel storage, it is onerous to increase the resiliency. The operation of diesel generators and microturbines for backup supply is a costly proposition in countries like Iceland, Norway, Sweden etc., where the fuel cost is very high. However, a potential solution is to integrate a diverse mix of renewables and energy storage systems to form a sustainable microgrid. Meanwhile, an effective control technique would improve resiliency and enable the transition to sustainable energy. Nonetheless, the increase in resiliency often comes with a cost to bear. The monetary loss averted through high resiliency pays off for the high financial investment. A cost-benefit analysis with an appropriate estimation of the anticipated revenue generation by the microgrid would attract investment. Hence, a trade-off between the cost and resiliency should be met for a feasible solution.

 

 For a downloadable copy of March 2020 eNewsletter which includes this article, please visit the IEEE Smart Grid Resource Center.