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Microgrids Trends & Key Issues November 2018

M I C R O G R I D S D E P L O Y E D T O D AY

K E Y F A C T S ¡ Electric companies

are active partners in microgrid deployment, and are involved in 42 percent of the projects in the United States, almost quadrupling since 2014.

¡ Since 2014, total installed U.S. microgrid capacity has almost tripled.

¡ The share of non-military microgrids is growing dramatically, and, in 2018, they represented 84 percent of all microgrids, up from almost zero only a few years ago.

¡ Drivers of microgrid deployment include falling costs of microgrid control technologies, increasing popularity of privately generated clean energy, and increasing efforts to enhance energy grid resilience.

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1,000

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4,000

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6,000

7,000

8,000

Other Projects with Electric Company Involvement

2018 Q22017201620152014

Meg

awat

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200

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1,000

1,200

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Other

ElectricCompany Involvement

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nal Cam

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Electric

Company-L

ed

Cap

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(MW

)

U.S. Microgrid Projects as of 2018 2Q

U.S. Microgrid Capacity Planned and Operational Projects

Source: Navigant

Source: Navigant

2 | E E I | M I C R O G R I D S T R E N D S & K E Y I S S U E S

O U R TA K E

M I C R O G R I D S P R O T E C T C R I T I C A L I N F R A S T R U C T U R E A N D E N H A N C E S Y S T E M R E S I L I E N C E

Electric companies increasingly are using innovative technologies such as energy storage, private solar, and microgrids to develop smarter energy infrastructure that delivers energy safely and reliably to customers.

Microgrids give customers more control over their own energy needs—enabling them to enhance reliability and resiliency; balance energy use; achieve clean energy goals; and explore other innovative products and services. When deployed by or in conjunction with electric companies, microgrids also can help electric companies enhance the resilience of the entire energy grid and provide numerous public benefits that extend beyond the microgrid users to the grid and all customers.

Among other things, electric companies are owning microgrids to improve resiliency for customers, provide cleaner energy, give customers more data about their energy use, enable greater energy efficiency, and deliver new products and services for future customer and community needs.

To unlock the full potential of microgrids for all customers, public policies must enable electric companies to participate in their development and operation. Policies also should ensure that electric companies continue to have a lead role in operating the energy grid as well as recognize the public benefit attributes of microgrids.

Enhancing System Resilience

Microgrids can provide service during a general outage to resources that will facilitate the general power restoration effort,

such as police, fire stations, communications centers,

and transportation.

Protection of Critical Infrastructure

Microgrids can provide service during a general outage to vital resources

that will be relied upon by all customers during the outage,

such as hospitals, gas stations, and stores that carry food

and other necessities.

Learning

When deployed as demonstration projects, microgrids provide

practical operating experience that contributes to cost

efficiencies and operational improvements. Although difficult

to quantify, this experience provides tangible benefits to all future microgrid projects.

M I C R O G R I D S T R E N D S & K E Y I S S U E S | E E I | 3

In the first half of 2018, microgrid policy activity remained robust and focused on increasing the energy grid’s resilience and supporting critical infrastructure, as well as implementing innovative business and regulatory models that will help electric companies achieve those goals.

About 60 percent of the activity occurred on the legislative side, while about 40 percent was attributable to regulatory activities.

E N H A N C I N G E N E R G Y G R I D R E S I L I E N C E

Resilience remains a top driver of microgrid legislation and regulatory proceedings. For example, Duke Energy filed a petition for a microgrid at Camp Atterbury, Indiana, which was granted approval at the end of May. In Michigan, a bill was introduced that looked to adopt microgrid standards, establish microgrid service rates, and evaluate the costs of using these systems to power critical infrastructure. Hawaii passed legislation that will establish a microgrid services tariff for Hawaiian Electric Company and its subsidiaries, and, in early July, the Commission opened a proceeding to investigate the establishment of such a tariff. In California, legislation was introduced that would require all electric companies to develop “grid resiliency deployment plans.”

B U S I N E S S A N D R E G U L A T O R Y M O D E L S

Developing business and regulatory models, defining ownership, and evaluating cost-recovery mechanisms remain top trends in proposed legislation and new regulatory activities. There is a special focus on the role of microgrids in supporting critical infrastructure as a key argument for passing and approving.

For example, legislation introduced in April would require the Michigan Commission to issue orders that would allow investor-owned electric companies to establish microgrids to support critical infrastructure, to issue standards related to microgrid ownership and operation, and to issue a costs-and-benefits analysis report evaluating the use of microgrids to support critical facilities.

In February, Commonwealth Edison (ComEd) received approval from Illinois regulators to build a multi-customer microgrid in the Bronzeville residential area of Chicago. The Commission will allow ComEd to recover most of this cost because of the public benefits that it will provide.

P O L I C Y U P D AT E

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Pilot Project

Financial Incentive

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Grid Modernization E�ort

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Number of Regulatory and Legislative Microgrid ActivitiesJanuary–June 2018

A M E R E N I L L I N O I S C Y B E R S E C U R I T Y M I C R O G R I D , C H A M P A I G N

This Champaign microgrid is one of the most technologically advanced electric company-scale microgrids in North America. It is the only known large-scale microgrid in the nation capable of seamlessly transitioning the power source for an entire distribution circuit from the microgrid to the energy grid and vice versa, and it also marks the first installation by a U.S. energy company of a military-grade cybersecure microgrid controller. The project exemplifies the first time an electric company is serving paying customer loads on an electric company distribution feeder. The energy generated by the microgrid can be delivered directly to local customers, routed to the central grid, or stored in the microgrid’s battery. The microgrid has an energy storage battery as well as a complex distributed energy resource mix that also integrates wind, solar, and natural gas. The project has been operational since 2016.

O N C O R S O L A R , B A T T E R Y, M I C R O T U R B I N E M I C R O G R I D

The autonomous microgrid at Oncor’s System Operating Services Facility consists of four interconnected microgrids and nine different distributed generation resources: two solar PV arrays, a microturbine, two energy storage units, and four generators. The microgrid project aims to test Oncor’s ability to operate a microgrid, as well as to showcase how solar, microturbines, and battery storage can integrate renewable energy sources into the energy grid through advanced hardware and software. The two batteries enable integration of solar energy, allow for voltage control, and release stored energy during an outage. The project has been operational since 2015.

S A N D I E G O G A S & E L E C T R I C B O R R E G O S P R I N G S M I C R O G R I D D E M O N S T R A T I O N P R O J E C T

This project was the first large-scale microgrid in the U.S. and serves as an upgrade of distribution, manages solar generation, and reduces feeder peak load. The project also helps study microgrid islanding of an entire substation and ways to improve system reliability. The project integrates five different technologies, including distributed energy resources; solar and VAR management; feeder automation system technologies; advanced energy storage; an outage/distribution management system; and price-driven load management. Storage is not directly paired with solar, but the goal is to use both resources on the energy grid. The project has been operational since 2012.

Edison Electric Institute701 Pennsylvania Avenue, NWWashington, DC 20004-2696202-508-5000 | www.eei.org November 2018

M E M B E R S P O T L I G H T