Urban Microgrids – Plethora of Opportunity for City DISCOMs

Written by Ram Krishan, Er. Alekhya Datta, and Ashish Kumar Sharma

With increasing share of renewable energy (RE) in the power system, the resource adequacy planning exercise for power distribution utilities or Distribution Companies (DISCOMs) is bound to change. The role of balancing fleets such as Battery Energy Storage Systems (BESS) will become important and gain prominence with falling battery prices and more arbitrage opportunities in power markets. Flexibility and system reliability will be important attributes for any electricity distribution system operator and thus micro-grids will have a crucial role to play in both urban and rural set-ups. In an urban setting, micro-grids will help in synchronizing demand and supply and aid in improving quality & reliability of power supply. Such 'urban micro-grids' have gained relevance in congested Indian cities such as New Delhi, Kolkata, Mumbai where power distribution equipment augmentation becomes a tedious task due to underground cabling, space constraints and right of way challenges. Recent examples of distribution grid failures in major metropolitan cities have established the need for black-start support at the distribution-level. However, operational use cases at the distribution network-level can be unique and can change dynamically with time depending on demand & supply patterns, power purchase portfolio of the utility, customer-service obligations, etc. One such operational use case was found to exist for a Delhi based distribution utility wherein an urban micro-grid can be utilized to redeem energy arbitrage benefits, providing black-start support, meeting RPO targets and improving quality and reliability of power supply. A pre-feasibility study was carried out in this context which envisaged 8 MWp of solar PV potential along with 4 MWh of AC coupled BESS. The power evacuation for system integration at the utility power grid level was proposed through an 11 kV distribution line that emanates from a 66/11 kV distribution sub-station that serves the area. An operational control strategy for BESS was defined so as to maximize the benefits earned from the system in terms of peak power purchase cost saving while operating under Energy Arbitrage mode.


The study entailed detailed technical and economic feasibility of an urban micro-gird within the license area of an urban DISCOM serving electricity in a certain geography of the National Capital Territory (NCT) of Delhi. A commercial category consumer, in-particular a healthcare campus which is one of the largest temporary Covid-19 hospitals in India having capacity of 10,000 beds, (roughly the size of 22 football fields) was identified to carry out the feasibility assessment. The facility required the distribution company to set-up additional power distribution infrastructure in place. In a few days of its operation, the load increased to 100 times. The distribution equipment, including three additional 11 kV feeders, were set in place to supply power to the temporary health facility. The facility provides 75,000 m2 of area for large-scale solar PV and BESS installation with capacities mentioned above. The obvious reasons for selecting this particular site were the ample space available for installation of such large-scale micro-grids and adequate distribution network infrastructure to support the power flow through a micro-grid set up. The sizing of BESS was done so as to ensure that the power generated from the combined set-up was consumed locally within the distribution sub-station, thus preventing supply of power back to the upstream network, i.e., the 66 kV grid. The micro-grid was designed to supply power to the 14 feeders emanating from the 11 kV bus at the 66/11 kV sub-station owned by the utility. The BESS operational control algorithm was designed (as illustrated in figure 1) to operate the system as per peak and off-peak hours of the selected DISCOM and, in this regard, time-series loading data at the system level was assessed for last five financial years. The BESS was designed to charge during off-peak hours where cheaper power may be consumed and discharge during peak-loading durations when power purchase from expensive power plants can be curtailed. However, technical minimum of thermal power plants have to be taken into consideration in case large scale battery storage is deployed within the network of distribution utility since discharging of BESS with such a huge capacity may lead to significant reduction in power withdrawal from thermal power plants. Charging and discharging threshold along with rate of power flow for BESS operation was decided based on the assessment of monthly power purchase portfolio (shown in figure 2) and monthly system level load curve of the DISCOM. Furthermore, the charge/discharge threshold power level can also be made to vary dynamically on a daily basis. This can be performed while operating the system in real-time based on the forecast of the load pattern to identify the peak and off-peak times accurately. For optimal utilization of BESS, operation under off-grid mode during grid outages has also been explored by proposing black-start capability for a selected 11 kV feeder wherein micro-grid interconnection is being proposed. Based on load assessment, it was found that the BESS can provide 2-3 hours back-up to the loads connected on the feeder.


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Figure 1: BESS operational control algorithm


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Figure 2: Month wise peak and off-peak electricity price difference in INR/kWh


The stacking of plausible revenue streams resulted in a payback period of around 4-5 years (refer to the Figure 3 and Table 1) for the utility under study. These savings may not remain same for every utility and a lot depends on the consumer mix and other local conditions. The benefits from ensuring power supply during power outages were found to be the least since there is minimal incentive for distribution utilities to eliminate power outages completely. The prominent savings came from reducing early evening peak and energy arbitrage opportunities (charging in off-peak times and discharging in peak times). The benefit was found to be decreasing over the years due to linear degradation assumed for both BESS and Solar generation.


Table 1: Linear decrease in Non-discounted PBP with falling battery prices

BESS Cost in $/kWh 450 400 350 300 250 200
Non Discounted PBP 4.96 4.79 4.63 4.47 4.30 4.14


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Figure 3: Plausible revenue streams over life of 10 years


Since BESS is a customized solution, cost-benefit assessment may differ from location to location and application to application. Distinct battery technologies offer different technological characteristics like power density, energy density, C-rates etc. A suitable technology has to be chosen based upon pain areas and saving opportunity of the distribution network. Revenue streams are also dependent on the price signals of the specific region where BESS is located.


This article edited by Ali Nabavi

For a downloadable copy of the March 2021 eNewsletter which includes this article, please visit the IEEE Smart Grid Resource Center.

Ram photo
Ram Krishan works in the Electricity and Fuels Division of TERI as a Research Associate. He has 3 years of research experience in energy system modelling & simulation. Prior to joining TERI in May 2018, he worked in the position of Graduate Executive Trainee in maintenance department at Sentiss Pharma Pvt. Ltd., Nalagarh. He worked as a teaching assistantship under MHRD fellowship at IIT Mandi. He presently handles research projects in the domain of distribution system, especially in the area of battery storage, solar PV and Electric Vehicle charging stations. He is involved in the WBSEDCL funded project on grid scale battery storage system for various applications at distribution level and the Indo-US project on distribution level battery energy storage systems. He is actively involved in the development and validation of energy management system for BESS at laboratory scale. He is also working on impact assessment of high solar PV penetration in distribution network. He holds M.Tech in energy engineering from Indian Institute of Technology Mandi.
Alekhya pic
Er. Alekhya Datta is Fellow and Area Convenor, Electricity and Fuels Division, TERI. He is working on the grid integration aspects of renewable energy and micro-grids, implementation of Battery Energy Storage Systems (BESS), and vehicle-to-grid concept through Virtual Power Plants (VPPs) in electric vehicles. He has earlier worked in flagship projects such as R-APDRP/ IPDS, Solar Resource Assessment etc. and in developing the solar rooftop programme in India under the National Solar Mission. He is also an active member of committees/ working groups formulated by the Govt. of India through the Ministry of Power, Ministry of New & Renewable Energy, NITI Aayog, Bureau of Indian Standards (BIS), and Central Electricity Authority (CEA). He has published/ presented research papers/ articles in national and international journals, conferences, and newspapers. He is also guest faculty in capacity building programmes related to renewable energy and energy transitions, organized by academic institutions and corporates.
Ashish pic
Ashish Kumar Sharma, a Research Associate is working in Electricity & Fuels Division of TERI. He is currently looking after Impact assessment of solar rooftop across PAN India, implementation of Battery Energy Storage Systems (BESS) and building financial models for different of batteries, solar and wind to find landed cost to customers. Before joining TERI, he has done MBA in power management from NPTI (2016-2018), He did his two months internship from TERI in June, 2017 and thereafter, he has remained associated with TERI on bi-weekly basis supporting in various projects like LED impact assessment, GRPV tender evaluation for MP discom, writing TEDDY, making tool for calculating LCOS of BESS, writing proposals etc. He has also written many research papers/ articles in various National and International Journals on BESS economics. As a speaker he has undertaken sessions on BESS with advent ofmicro grids in tow day workshop organised at NPTI and has represented Teri at various other international level conferences.

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