The National Academy of Sciences defines “resilience” as the ability to prepare and plan for, absorb, recover from, and more successfully adapt to adverse events. Since the September 2017 DOE NOPR to FERC, the energy industry has been working overtime to better define resilience. FERC unanimously set aside the “90 days on-site fuel storage” provision espoused by DOE and opened a new docket (AD18-7) to more fully examine the current state of grid resiliency, asking the nation’s seven RTO’s and ISO’s to provide their definition of resiliency relative to the bulk power system by March 9. Those ISO/RTO comments reflected regional variances as expected while sharing a common thread of the paradigm shift underway from central station power plants to more distributed generation.
The New England ISO cited concerns with the growing dominance of natural gas power generation and limits of pipeline capacity into the region, especially during spells of extreme winter weather. CAISO suggested a more holistic approach incorporating considerations for carbon as well as capacity markets. Interestingly, ERCOT, though not subject to FERC jurisdiction, submitted comments on market trends including proliferation of renewables and functional capacity markets. MISO conveyed a general confidence that decades of reliability planning had resulted in system resilience. But the PJM comments may have set the stage for a deeper dive, suggesting that resilience in the bulk power segment was inter-dependent with resources seemingly beyond their control, namely pipeline and LDC communication and coordination highlighting the need for natural gas availability. Further, in similar context to the comments offered by MRC and by IDEA, PJM discussed resilient resource compensation mechanisms, attributes and metrics.
Now the resilience discussion moves on to industry and market participants who will have a 30 day window for comments to FERC. As most grid interruptions occur at the distribution level, FERC jurisdiction may be somewhat limited, but discussion of grid resilience certainly merits broader and deeper engagement. Most electricity customers experience resilience, or lack thereof, at the local level. Living near Boston, where three recent winter storms with high winds and heavy wet snow caused countless tree limbs to down distribution wires, power outages in the “last mile” were restored through the tireless efforts of a flotilla of native and imported bucket trucks. For residential customers, extended power outages are certainly more than just a nuisance as both people and property are at risk, but losses are generally manageable or insurable.
When you move up the market ladder to commercial, industrial, or institutional segments, the risks from grid interruption multiply along with the importance of more resilient energy services. Consider, for example, a research hospital storing decades of cancer research, or a university vivarium with scores of laboratory animals, or an emergency management command/control center coordinating first responders. These are the clusters and community assets that demand highly-reliable and resilient energy resources like microgrids. When you also aggregate the heating and cooling loads of multiple buildings, economies of scale create excellent potential for district energy and combined heat and power systems.
For many in the energy industry, especially on the east coast, Super Storm Sandy in October 2012 was the galvanizing event, the moment when “resilience” first entered the lexicon. Knocking out power to 8.1 million customers in 21 states, Sandy’s one-two punch of storm surge and strong winds in New York and New Jersey seemed to crystallize the inherent vulnerability of energy infrastructure, vividly demonstrating how extreme weather could endanger communities, shut down the economy and generate insurance losses nearing $70 billion. However, throughout the intense storm and for many days thereafter, the district energy/CHP microgrids at Princeton University, New York University and Co-Op City in the Bronx, maintained continuous energy services to connected customers, supporting residents, critical research and first-responders. For many, Sandy proved the value and resilience of community-scale microgrids anchored by district energy and combined heat & power (CHP) systems, even while emergency generator sets sputtered, failed or exhausted fuel supplies.
These robust distributed energy resources (DER), with hybrid generation often anchored by natural gas-fired CHP as prime mover, have emerged as critical energy infrastructure, particularly for higher education, military bases, pharmaceuticals and healthcare clusters in cities, campuses and communities. As the discussion on resilience continues, it will be important to engage appropriate parties in meaningful regulatory dialogue, navigating the three-level chess board of federal, state and local jurisdictions to develop reasonable market participation rules for microgrids. Recently FERC Chair Kevin McIntyre stated, "If there are power plants — big, small or otherwise — that are making valid, resilience-focused contributions to our grid, essentially helping to keep the lights on in a way that shores up resilience, but are not being compensated for those attributes that they are providing to the grid, that is automatically of concern to FERC."
In the five years since Sandy, the states of New York, New Jersey, Connecticut and Massachusetts have all funded microgrid programs to accelerate deployment, with the principal intent to help industry, communities, real estate developers and others, capture the resiliency benefits of district energy/CHP microgrids at a local level. Over the past 15 years across North America, scores of colleges and universities have installed CHP (cogeneration) to improve efficiency, enhance reliability and reduce emissions. Most campus energy systems are designed to optimize production of thermal energy for district heating and cooling, and electricity is essentially treated as a by-product, used on campus and rarely exported. Since Sandy, dozens more campus utility systems have integrated black start capability, are able to “island” during extreme weather events and have integrated thermal storage and large–scale renewables. It will be important to assess more fully the opportunity for greater market participation by this class of microgrids.
In practice, gas turbine CHP units operate very effectively as grid support, providing highly-responsive balancing capacity for intermittent renewables and when coupled with thermal storage, can dramatically shift peak demand and reduce strain on the regional distribution grid. Campuses have become highly effective hybrid resources, integrating CHP, thermal storage, demand management, and onsite solar. For instance, during a peak hot weather day in July 2017, Princeton University produced 15 MW with on-site CHP; about 5 MW with on-campus solar; shifted air conditioning demand using chilled water storage and implemented other energy efficiency measures to cut campus demand from 24 MW to under 1 MW on a hot, humid day of peak system load. Princeton avoided purchasing power that cost 4 times normal, but it also dramatically alleviated strain on the grid in their regional economy. District- scale microgrids should be valued on multiple metrics.
Within the next 30 day comment period, the International District Energy Association and Microgrid Resources Coalition will submit comments to FERC on how district energy/CHP microgrids have emerged as critical energy infrastructure for campuses, healthcare and industry and are gaining support among traditional utilities investing and supporting microgrid deployment in urban markets. The Com Ed Bronzeville microgrid cluster with Illinois Institute of Technology is emblematic of how enlightened utilities now envision partnering and networking on microgrids to support greater distribution grid stability and economic resiliency. Another prime example is the hybrid 14 MW microgrid interconnection by Con Ed at the massive $25 billion Hudson Yards development with Related Companies. High-value, visionary real estate developers understand the market advantages of showcasing and providing on-site microgrid capabilities, especially in Manhattan where the memory of Super Storm Sandy still lingers. Increasingly, savvy tenants are indicating that premium commercial property should include access to district energy CHP microgrids.
As the resiliency discussion evolves, it will be increasingly important for utilities, regulators and industry to converge around the merits of district energy/CHP microgrids to deliver more resilient energy for cities, communities and campuses, especially those clusters that value business continuity and enhanced life-safety against a clear trend of more frequent, severe weather events. At state and local jurisdictions, regulators will need to modernize policy frameworks to foster more microgrid deployment, regardless of owner/operator and technology, to enable more resilient energy for critical economic and security clusters. Since these assets are sited closer to where electricity is consumed, microgrids can help to avoid costly and inefficient transmission and traditional distribution investments, reduce losses, and provide balancing capacity for the grid along with ancillary services such as frequency regulation. Accordingly, microgrids should be valued for the full range of services and attributes they provide to the grid at all levels.
In 2017, severe weather events caused over $306 billion in insured losses and actuarial models show no signs of these weather risks abating. Once again, in 2017, the district energy/CHP microgrid serving Houston’s Texas Medical Center stood up to Hurricane Harvey to keep 48 hospitals and research facilities operational throughout the storm. It’s time that this proven approach to energy resiliency is more fully considered and freed from the constraints of arcane, anachronistic policy or regulatory impediments. The next few months will be pivotal for getting the rules right for more deployment of district energy/CHP microgrids. At IDEA/MRC, we look forward to sharing decades of practical industry experience providing reliable, efficient energy services to cities, communities and campuses to better inform how our industry can help define a more resilient energy future.
Rob Thornton is President and CEO of the International District Energy Association (IDEA), a 2400+ member industry association formed in 1909. IDEA and the Microgrid Resources Coalition (MRC) will host the Microgrid 2.0 conference in Baltimore on October 29-31, 2018 with FERC Commissioner Cheryl LaFleur providing the keynote address. Please visit www.districtenergy.org for more information.