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Addressing Radial Feeder Challenges with Microgrids

by Randall September, ABB

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• Challenges of the future power grid

• Overview of Radial Feeder Challenges

• How can Microgrid help

• What ABB has to offer

• Radial Feeder Microgrid Business Case

• Summary

October 25, 2018 Slide 2

Agenda

—Grid connected Battery Energy Storage Systems

October 25, 2018 Slide 3

—

Long-term drivers for energy storage

Challenges of the future power grid

• Electricity consumption on the rise

• Coal plant retirements

• Growth in renewables

• Electrification of transportation

• Proliferation of smart grid technology

• Tax and regulatory incentives

October 25, 2018Slide 4

—Executive Summary

October 25, 2018 Slide 5

Challenges for distribution utilities Microgrid benefits

• Defer distribution system upgrades while manage expected demand growth

• Improve reliability performance and resiliency

• Provide voltage regulation and increase hosting capacity of network for additional renewable penetration

• Decrease demand charges by peak shaving

• Radial feeders in need of capacity upgrades for the demand growth.

• Below-average reliability and power quality metrics

• Voltage issues due to the increased Solar Photovoltaic (PV) penetration

• Peak demand charges for Distribution utility

Target is distribution utilities that can own energy storage

—Microgrid

* Islanded mode: ability to provide power independently from the main power gridOctober 25, 2018 Slide 6

Microgrid Definition

Distributed energy resources and loads that can be operated in a controlled, coordinated way either connected to the main power grid or in “islanded”* mode.

Microgrids are low or medium voltage grids without power transmission capabilities and are typically not geographically spread out.

ABB has +331 MW global installed capacity of Microgrid and BESS

Solar PV power plant

Wind power plant

Remote asset management

and data analytics

Advanced powerdistribution and

protection

Conventional power

Grid connection

Modular scalable energy storage and grid

stabilization

Commercial loads

Industrial loads

Distributed control system Residential

loads

—Grid connected energy storage applications

ESS

Integration of

renewables

1-100 MW,1-10 hPeak shaving

0.5-10 MW, 1 h

220 kV

110 kV

20 kV ring

20 kV

Conventional

central

generation

Variable

renewable

generation

220 kV

Load leveling

for generation utilization

10-1000 MW, 1-8 h

ESS

110 kV Industry/

Large commercial

Load center

20 kV

ESS

Spinning reserve

In case of line loss

10-500 MW, 0.25-1 h

Load levelingfor postponement of grid upgrade

1-10 MW, 1-6 h

ESS

ESS

Frequency regulation

1-50 MW, 0.25-1 h

220 kV

110 kV

ESS

Solar PV time shift

1-100 kW, 2-6 h

ESS

0.4 kV

Residential/Small commercialESS

Microgrid

Stabilization

0.1-5 MW,

5 min

October 25, 2018 Slide 7

—Radial Feeder challenges

—Load Growth Challenge

October 25, 2018 Slide 9

Radial feeder Load forecast, substation capacity

Distribution system cannot host the expected demand growth in future due to substation capacity

Distribution utility with radial feeders in need for capacity upgrade

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV

Aggregated Load

—Reliability Performance Measurements

October 25, 2018 Slide 10

System Average Interruption Duration Index System Average Interruption Frequency Index

System Average Interruption Frequency Index(SAIFI):

The sum of the number of interrupted customersfor each power outage greater than five minutesduring a given period, divided by the total numberof customers served for the area. This metric isexpressed in the average number of outages peryear

System Average Interruption Duration Index(SAIDI):

The sum of the restoration time for each sustainedinterruption multiplied by the sum of the number ofcustomers interrupted, divided by the total numberof customers served for the area. This metric isexpressed in average minutes per year

According to IEEE, North American utilities have the SAIFI median value of 1.10 interruptions per customer per year and the SAIDI median value of 90 minutes per customer per year

System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI)

—Reliability Performance for Utilities

October 25, 2018ABB AbilityTM Velocity Suite, https://new.abb.com/enterprise-software/energy-portfolio-management/market-intelligence-services/velocity-suite

Slide 11

US utility categories and reliability performances

—Economic Impacts of Reliability Performance

October 25, 2018“Decision Addressing The General Rate Cases of San Diego Gas & Electric Company and Southern California Gas Company and The Proposed Settlements”, June 2016Finish Electricity Market Act, 2018, “Compensation for Power Cuts”

Slide 12

Example from San Diego Gas & Electric

1. Penalty/ Reward Scheme

2. Non-Delivered Energy (Costumer compensation Finnish Electricity Market Act)

Impacts SAIDI System Worst Circuit

Target (minutes)

60 585

Dead Band +/- 2 +/- 35

Increment 1 10

Annual Improvement

1%

Reward Increment

375 kUSD 125 kUSD

Penalty Increment

375 kUSD 125 kUSD

Maximum 3 MUSD 1 MUSD

SAIFI System Worst Circuit

Target (outages)

0.51 4.40

Dead Band +/- 0.02 +/- 0.35

Increment 0.01 0.10

Annual Improvement

1%

Reward Increment

375 kUSD 125 kUSD

Penalty Increment

375 kUSD 125 kUSD

Maximum 3 MUSD 1 MUSD

—Voltage Issues

ABB AbilityTM Velocity Suite, https://new.abb.com/enterprise-software/energy-portfolio-management/market-intelligence-services/velocity-suiteJ. Bank, B. Mather, J. Keller, and M. Codington, “High Penetration Photovoltaic Case Study Report,” NREL, 2013

October 25, 2018 Slide 13

Does voltage regulation impact….

US Solar Global Horizontal Irradiance Map with Planned and Operating Solar Generating Units (By ABB AbilityTM Velocity Suite)

Over Voltage: The PV generationincreases the line voltage at the feed-inpoint.

Voltage Fluctuations: Clouds causefrequent voltage changes. Voltageregulators have ~30 second operationaldelay.

In the existence of solar PV, VRs need toget replaced every year due to hundredsof thousands operation (mechanicalswitching) per year.

Impact of PV on the radial feeder voltage regulation

—Charges for Peak Demand

ABB NAM Reference Case,https://new.abb.com/enterprise-software/energy-portfolio-management

SANDIA Report, “Green Mountain Power (GMP): Significant Revenues from Energy Storage”, SAND2017-6164, May 2017.October 25, 2018 Slide 14

Transmission Charge Capacity Charge (ABB NAM Reference Case)

Distribution utilities pay charges related to the peak demand - Example New England Independent System Operator (ISO)

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—Radial Feeder Microgrid Business Case

—Radial Feeder Business Case – Problem Definition

October 25, 2018 Slide 16

Distribution Utility Challenges Power System Assumptions

Location: Long radial feeders with geographic restrictions

• Peak demand exceeds the substation capacity in 5 years.

• The capacity upgrade is required to manage the load growth.

• The utility pays the peak demand charges to ISO/RTO.

• The reliability performance is below the target and utility pays the penalty.

• The utility is facing increased O&M cost for voltage issues by solar PV

Load 8 MWp, 5.5 MW avg, 1% growth rate

Substation Capacity

8.5 MW

Solar PV 800 kWp

Utility Rate 0.12 USD/kWh (50% grid fee), 2% inflation rate

SAIDI 420 minutes per customer per year

SAIFI 3 times per customer per year

Reliability Impact

125 kUSD-Year as a Penalty/ Reward, 2% inflation rate

Demand Charge

100 USD/kW-Year as transmission charge, 12 USD/kW-Month as a capacity charge, 2% growth rate

System O&M Cost

425 kUSD, including extra maintenance for VRs.

—Radial Feeder Business Case - Scenarios

October 25, 2018 Slide 17

Distribution Capacity Upgrade Scenario Microgrid Solutions Scenario

These scenarios manage the demand growth, but Microgrids have multiple revenue streams.

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV

ABB Microgrid Plus Control System

ABB Ability PowerStoreTM

Aggregated Load

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV Aggregated Load

—Scenario 1: Distribution Capacity Upgrade

October 25, 2018 Slide 18

Qualitative description

Peak Demand

Voltage Regulation

2

4

Distribution Capacity Upgrade

Distribution utility pays the penalty for low reliability performance.

1

Reliability 3

The operation and maintenance cost is increased due to the voltage issues occurred by PV integration.

Distribution utility pays the investment for capacity upgrades. This covers the load growth during the project duration considering the lead time.

Distribution utility pays for the capacity charge and transmission charge related to the peak demand.

—Scenario 1: Distribution Capacity Upgrade

Microgrid Knowledge Report for Berkley, published on August 17, 2018.October 25, 2018 Slide 19

Benefits Costs

Upgrade Cost 1 MUSD per mile*

Distance 5 miles

Lead time 5 years

• Manage the expected demand growth

• No impact on Peak demand charges

• No impact on reliability performance

• No impact on voltage regulation and relative maintenance costs

Quantitative description

—Scenario 2: Microgrid Solutions

October 25, 2018 Slide 20

Qualitative description

Peak Demand

Voltage Regulation

2

4

Microgrid

Distribution utility receives the reward for high reliability performance

1

Reliability 3

Voltage regulators need to switch less due to the battery voltage regulation

Distribution utility invests in Microgrid solution with lower lead time to manage the expected demand growth

Distribution utility pays less demand charge due to the Microgrid peak shaving capability

Microgrid improves resiliency and increase hosting capacity of distribution system for renewable integration

—Scenario 2: Microgrid Solutions

Lazard levelized cost of storage analysis,October 25, 2018 Slide 21

Benefits Costs

• Manage the expected demand growth by peak shaving

• Reduce Peak demand charges by 20%

• Improve reliability performance and receive rewards of 125 kUSD per year

• Decrease system O&M costs relative to voltage regulators by 25%.

Quantitative description of Microgrid (5.5 MW, 16.5 MWh)

Microgrid total cost 470 USD/ kWh**

Battery replacement cost after 10 years

175 USD/ kWh

Lead time 1 year

Microgrid O&M Cost 0.2% Microgrid CAPEX

—Microgrid Impact on Reliability Performance

October 25, 2018 CIGRE Technical Brochure (TB635) and ISBN: 978-2-85873-33835Slide 22

Reliability performance Indices

Assuming an availability of 98% for the energy storage(𝑃𝐸), a 100% probability of successfully transitioning toislanding mode (𝑃𝑀𝐺), and that 0 minutes are requiredfor the Microgrid to transfer to islanding mode (𝑡𝑀𝐺)with an ABB Ability PowerStoreTM and Microgrid Pluscontrol system.

• 𝑆𝐴𝐼𝐹𝐼 = 𝑆𝐴𝐼𝐹𝐼𝐵𝑎𝑠𝑒 𝑃𝑀𝐺𝑃𝐸𝑆 + 1 − 𝑃𝐸𝑆 =0.06 𝑜𝑢𝑡𝑎𝑔𝑒𝑠 𝑝𝑒𝑟 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟

• 𝑆𝐴𝐼𝐷𝐼 = 𝑆𝐴𝐼𝐹𝐼𝐵𝑎𝑠𝑒 𝑃𝑀𝐺𝑃𝐸𝑆𝑡𝑀𝐺 +𝑆𝐴𝐼𝐷𝐼𝐵𝑎𝑠𝑒

𝑆𝐴𝐼𝐹𝐼𝐵𝑎𝑠𝑒1 − 𝑃𝐸𝑆 =

8 𝑚𝑖𝑛𝑢𝑡𝑒𝑠 𝑝𝑒𝑟 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟

Reliability performance has improved significantly with the islanding capability

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV

ABB Microgrid Plus Control System

ABB Ability PowerStoreTM

Aggregated Load

—Radial Feeder Business Case- Results

October 25, 2018 Slide 23

20 years project life time with 9% discount rate

Microgrid is the economic solution for the Distribution utility with radial feeder in need for capacity upgrade

Scenario 1: Distribution System Upgrade Scenario 2: Microgrid

CAPEX 5 MUSD 7.8 MUSD

OPEX 27.3 MUSD 21.9 MUSD

Revenue 32.7 MUSD 34 MUSD

Net Present Value 0.4 MUSD 4.3 MUSD

Internal Rate of Return 10% 15%

Payback Period 10 years 6 years

—Summary

—Microgrid Business Case for Radial Feeder

October 25, 2018 Slide 25

Key Takeaways

• Defer Distribution System Upgrade

• Manage Demand Growth

• Provide Peak Shaving

• Improve Reliability Performance

• Provide Voltage Regulation

• Increase Hosting Capacity of Distribution System

• Improve Resiliency

PowerStore™ Battery

—Developing a microgrid project from concept to commission

October 25, 2018 Slide 26

The project lifecycle

Concept Feasibility studyDetailed

engineeringSupply

Installation& commissioning

Optimization

Main business drivers

Business case

Analysis

Data collection

Social & Environmental Economic & Operational

Technical Site conditions, solar, wind, generation and load

Financial Subsidies, OpEx Costs, Fuel price

Technical viability Financial analysis

Different tools are required for each stage of the project lifecycle

– HOMER Quickstart (http://quickstart.homerenergy.com/)

– Financial model

– HomerPro (Energy flow)

– Power factory, PSSE, PSCAD (Loadflow, Stability, Protection)

– MatLab (Tuning)

Each tool has its own specific application

Operations & Maintenance

Microgrid Project Lifecycle