In Chicago, a cluster of museums is exploring the case for combining energy systems, but thorny questions remain.
Shared microgrids can help building owners lower costs and boost resilience, but big questions need to be sorted out first on how the systems operate.
While still a fledgling market, shared microgrids — sometimes called multi-user microgrids — are gaining increased attention from researchers and industry players. As with single-user microgrids, the systems combine some type of energy storage and generation with technology that allows them to separate from the larger grid in the event of a power outage or other disruption.
One potential site: Chicago’s Museum Campus. Located in the downtown Loop, it’s home to three of the Midwest’s largest museums — the Adler Planetarium, the Shedd Aquarium, and the Field Museum of Natural History — all with large, complex energy needs. The facilities are exploring ways to connect their energy systems in a way that benefits them all.
“It’s a matter of time before you’re starting to see some companies partnering and figuring out financial models to own a microgrid,” said Bob Wengel, the Shedd Aquarium’s senior vice president for facilities. “All three of these museums could become a microgrid. During certain times and certain conditions, the campus could stand for hours by itself, detached from the larger grid.”
Still, questions remain about who benefits from the cost savings and who manages such systems. And there are lots of thorny distribution contract questions to be sorted out, too. A team of researchers at the Institute for Sustainable Energy at Boston University and the Northeast Clean Energy Council recently took a crack at addressing these questions in a white paper that looked at obstacles to multi-user microgrids and presented ideas for potential solutions.
Utilities have long provided affordable power, and the business case for shared microgrids hasn’t always been clear — especially in the Midwest where power remains very affordable. However, customers increasingly want resilience, and microgrids are increasingly affordable.
“There will be a growing number of situations in which [multi-user microgrids] will become viable. Even today, certain sets of customers find the benefits offered by MUMs to outweigh the additional costs,” the paper said.
One major obstacle is delineating who owns and operates the different components. Most microgrids have a single operator, so all the extra power that’s not used in the home or business is sold back to a distribution utility or to the wholesale market. With a shared microgrid, the contractual and regulatory hurdles are considerably more complicated, and often look risky to businesses.
“Frankly, it’s uncharted territory,” said Ryan Katofsky, vice president of industry analysis at Advanced Energy Economy, a clean energy business group. “You’ve got multiple customers; they might each have some resources on their own property. Some might have rooftop solar, one might have a fuel cell in the basement, and another one might have a different kind of sophisticated load control system. The challenge then becomes: How do you sort of coordinate the operations of all of those resources?”
Who owns and operates the different components of the microgrid? Who makes the decisions when to island? “There are going to be communications with the utility and contractual arrangements,” he said. “The utility might provide some of the equipment, if it’s on their side of the meter. A customer or a third party might provide equipment if it’s on the customer side of the meter.”
Another barrier is cost. While the price of renewables is falling, the business case for investing the initial capital to build the microgrid — typically in the millions of dollars — can be tricky. It’s not that the projects don’t pencil, but resilience is hard to quantify — and it’s among the top line selling points for microgrids.
Estimates for the total cost of lost service in the U.S. fall between $30 billion and $150 billion, but estimating the value of microgrid reliability and resilience is much harder to predict, the Boston researchers found. “How does one apply a value to keeping a patient on life support? Or, how does one apply value to maintaining years of cancer research? In these situations, the value of electricity service is essentially priceless,” they wrote.
As the power industry transitions to clean energy generation with more distributed resources — including wind and solar with intermittent energy supply augmented with battery storage — the opportunities for shared microgrids will only grow, the paper concludes, especially as the cost of clean energy generation continues to decline.
Shared microgrids can also create benefits and cost savings for the larger grid. The systems can enable customers to have an optimal power flow, in which they are balancing their generation based on their load. For example, the Ontario town of North Bay is building a microgrid to increase resiliency in the face of extreme weather.
“It’s actually creating savings for the community,” said Chris Evanich, the manager of microgrid business development at S&C Electric Company, which is building the project. “It’s saving the municipal electric utility a significant amount of money on energy costs.”
The report identified some solutions to address some of the hurdles to building shared microgrids. Strong utility participation helps to increase the viability of a project, as does creative leveraging of government and private investment, and constructing a project in phases over time, which, in a sense, is what is happening on Chicago’s museum campus.
Shedd installed a 1-megawatt battery in 2016 that would almost certainly be used on any shared microgrid. The Shedd’s battery is large enough that the aquarium is already counted in some national tallies of microgrids, though it doesn’t quite meet the Department of Energy’s definition of a true microgrid because it lacks the ability to island from the larger grid.
Wengel said Shedd likely isn’t going to own a microgrid — it’s in the aquarium business — but he thinks is a matter of time until there’s a shared system, potentially managed by a third party. The regulatory market in northern Illinois is more hospitable to shared microgrids than other places. ComEd, the local power utility (Illinois’ largest), is moving away from power generation and focusing on distribution, and Illinois has legislation that allows other users to be on ComEd’s wires, he said.
“Somewhere along the line, we’ll start to figure out a microgrid here,” he said.
The market for microgrids is slowly but surely expanding in the Midwest, and the technology is generating a lot of buzz. But how exactly do microgrids work?