Microgrids get big

John Dilliott is yelling at me.

We’re standing in a sweltering room where the din of machinery and mandatory safety earplugs make it all but impossible to hear one another. On either side of us, two metal boxes the size of shipping containers house the thrumming gas turbines that generate more than three-quarters of the power needed by the University of California, San Diego.

As the campus’ energy and utilities manager, Dilliott is spending this unseasonably warm January day shuttling me around in a university-owned Prius and breaking down the oceanfront campus’ efforts to become an island unto itself – or at least an island when it comes to generating its own power.

That’s because the university that is a leader in climate change research is also home to what is likely the most advanced microgrid in North America. As such, it aims to highlight how small, semi-independent power grids could help solve the problem of how to reliably integrate renewable energy into distribution systems, boost grid security and even make money for their owners, operators and developers.

As utilities face long timelines, multibillion-dollar price tags and inadequate transmission infrastructure for renewable energy power plants like those planned for California’s Mojave Desert, microgrid projects could offer stable power supplies by reducing or eliminating dependence on the larger power grid.

And that could keep facilities like hospitals, data centers and military bases running during power outages. Meanwhile, self-generation insulates UCSD and other microgrid owners from climbing electricity rates while offering opportunities to profit from utility incentive programs.

In the process, the university is attracting companies eager to try out new technologies in what Dilliott and others at UCSD like to call a “living laboratory.” 

Scattered about the eucalyptus-studded campus in La Jolla, R&D projects test energy generation, storage and management technologies that could enable the smart grid of the future.

GOING  MAINSTREAM

The U.S. Department of Energy’s official definition of a microgrid is “a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid [and can] connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode.”

If that definition sounds cumbersome, that may be fitting: Microgrids themselves are in something of an awkward phase – full of promise, but not quite ready for prime time. Those that do exist in the United States tend to be special cases, able to skirt complicated connection and permitting rules by virtue of location and design.

“Virtually all microgrids are exceptions to the norm,” says Peter Asmus, a senior analyst for Pike Research, a clean tech market research firm.

Asmus authored a report for Pike last year that found the total capacity of microgrids worldwide would more than double in the next five years, from about 1.8 gigawatts in 2010 to 4.5 gigawatts in 2016, representing revenues of up to $3 billion.

In the United States, most of the microgrid development is being driven by public institutions such as the military and universities.

“The private sector is waiting for someone else to go first,” says Guy Warner, founder and chief executive of Pareto Energy, a Washington, D.C.-based microgrid developer. The company is working on several demonstration projects, including one for the city of  Stamford, Conn., and another at Howard University.

Santa Clara University, an 8,700-student Jesuit school in Silicon Valley, is building a microgrid to give it more control over its electricity costs and greenhouse gas emissions, as well as the ability to keep the lights on during an extended power outage, says Joe Sugg, the campus’ assistant vice president of operations.

The $15 million project is slated for completion by the end of the year and will include renewable generation from solar arrays and a fuel cell as well as an energy management system.

For the armed forces, security concerns and a mandate to switch to renewable energy is mobilizing microgrids. The military is rolling out projects in about a dozen U.S. locations, including one in Hawaii with Honeywell and a stimulus-funded project with General Electric at the Twentynine Palms Marine base in Southern California.

There’s also a market for microgrids in remote locations, like a project commissioned last year by GE in Bella Coola. The town, located about 250 miles north of Vancouver, B.C., is off the grid and had relied on hydropower with diesel generators supplying backup electricity.

The microgrid project includes a hydrogen and fuel cell system to store river-generated power for use in times of peak demand or low river flows. That will cut the need for dirty diesel generation, reducing the town’s greenhouse gas emissions by an estimated 600 tons annually. Meanwhile, a GE microgrid controller balances supply and demand, indicating which power source the town should tap at any given time.

Eventually, industry observers anticipate that microgrids will make their way into the private sector, likely starting with large corporate and industrial facilities.

“Silicon Valley would be a very natural place for microgrids,” Asmus says. He notes that the Googles and Apples of the world have massive corporate campuses, coupled with a need for reliable power and a commitment to sustainability initiatives that call for boosting use of renewable power.

For microgrids to make the leap to the mass market, though, developers will need to sort out a host of issues, including how to get buy-in from utilities.

While questions remain about how to deal with billing and other management issues, some utilities – Asmus cites Sacramento Municipal Utility District and BC Hydro in Canada as notable examples – are starting to warm up to microgrids, realizing that small grids could help them beef up renewable energy production in the face of state mandates. 

POWER ISLAND

With a daily population of 45,000, UCSD’s 1,200-acre campus essentially functions as a small city, albeit one boasting a marine institute, laboratories and other research facilities with intense power demands. 

“We have one of everything: A hospital, pool, offices, dorms,” says Dilliott. “Any application where energy is being used, we have at least one on campus.”

A lanky engineer, Dilliott got his start in merchant shipping, a field he says was great preparation for his position at the helm of UCSD’s microgrid. It makes sense, considering how big ships, and to some extent ports, have to generate and manage their own power supplies.  

Like a ship or a port, UCSD has attributes that make it a prime spot for developing a microgrid and testing new technologies: It only has one point of connection to the larger electric grid, and it’s not subject to the same building regulations that can bog down first-of-their-kind projects.

“We’re a self-regulated institution,” says Byron Washom, the university’s director of strategic energy initiatives. “We don’t require local permits to install projects. We can be finished by the time other projects are getting permits.”

At the heart of the school’s microgrid project is a cogeneration plant powered by the two 13-megawatt natural gas-powered turbines.

While the turbines generate electricity, waste heat makes steam used to meet about 95 percent of the university’s heating and cooling needs. At night, cooled water is stored in an 87-foot-tall, four-million-gallon thermal storage tank. During the day, a complex network of pipes connected to every major building on campus delivers chilled water for air conditioning, circulating the water back through cooling towers before returning it to the tank for storage. The university estimates that the system saves almost $700,000 a month in electricity costs.

While UCSD’s central cogeneration plant gives the campus a solid foundation for its microgrid project, it is the school’s efforts to incorporate new energy generation, management and storage technologies that are blazing the trail for smarter, more efficient electrical grids.

SOLAR FORECASTING

Scattered across UCSD’s campus, mostly atop parking structures, photovoltaic panels generate about one megawatt of electricity. Add to that a 2.8-megawatt fuel cell from FuelCell Energy that’s expected to come online later this year, and the campus will get about 11 percent of its total power from renewables.

“Now that we have it, we have to figure out how to optimize its management,” Dilliott says.

For that, UCSD is in the midst of a two-year project with Viridity Energy, a Pennsylvania-based startup whose software aims to make microgrids pencil out financially. The company won a $1.6 million grant from the California Public Utilities Commission last year for the San Diego project.

Dilliott likens the process of managing the university’s various assets to conducting a symphony, for which Viridity generates new sheet music every day. It directs which power sources to draw from at any given time, based on market prices of power, and allows producers like UCSD to sell back into wholesale electricity markets. For example, combining weather and market pricing forecasts, Viridity could tell UCSD when to import electricity from the grid, or when to max out its self-generated power.

Viridity’s software is “the brain that sits on top of everything else,” says Audrey Zibelman, the company’s chief executive. “We move management to the edge of the grid. It makes consumers active players,” by allowing them to adjust their power consumption to get the most from their distributed generation resources.  

Meanwhile, Concentrix Solar, a German startup, installed its first U.S. project at UCSD, a 5.75-kilowatt concentrating photovoltaic array that uses lenses to focus sunlight on solar cells to boost electricity generation.

The demonstration project helped Concentrix win a contract last year from Chevron Technology Ventures for a one-megawatt photovoltaic farm.

The school is also collaborating with Sanyo on an energy storage project and a solar forecasting system to make hourly solar output projections. 

Both projects could help the school optimize its renewable energy resources. The storage system, scheduled for deployment later this year, would channel power from a 33-kilowatt solar array to lithium-ion batteries, which could then generate the energy at night or when demand spikes.

The solar forecasting system, meanwhile, uses an imaging tool – described by Dilliott as a “fisheye in the sky” – to give a 360-degree view of the horizon to spot incoming clouds. The goal is to calculate how cloud cover will affect the output of photovoltaic arrays to help make decisions about when to store or release solar energy.

Of course, these technologies don’t come cheap. Companies like Concentrix and Sanyo are funding their demonstration projects. But the university, which has invested about $60 million in energy-related projects in the past 15 years, relies on outside funding, state and federal incentives and public-private partnerships to pay for components of its microgrid.

“For renewable projects, financing is the hardest part,” Dilliott says.

That makes the university’s own efforts to make its microgrid generate cash as well as electricity even more crucial, not only for the school, but to encourage the expansion of  microgrids to other institutions.

In that sense, the university, whose researchers were the first to confirm the buildup of carbon dioxide in the atmosphere, is a natural fit to drive ways to encourage broader and more efficient adoption of cleaner power.

“That’s what a university is all about,” Dilliott says.