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Potential Benefits

In time microgrids will impact each of us involved with designing, constructing, operating, and managing buildings. The key question is "Why would a developer or building owner be interested in a microgrid?" The rationale is persuasive:

b The microgrid improves power reliability. A microgrid with multiple generation sources provides diversity and therefore greater reliability.

Connecting a microgrid to the larger grid simply means increased power dependability.

b The microgrid has better potential to lower energy costs. While it's true that centralized power plants produce cheap power, there are opportunities to lower costs with a microgrid. For example, if a microgrid is connected to the larger grid the operator can use power from the larger grid when prices are cheaper than the microgrid; or conversely maximize the use of the microgrid when prices from the larger grid are high. Given variables such as time-of-day rates, demand charges, weather, potential demand response events, and load shedding scenarios, analytics can be applied to optimize when to use the larger grid or the microgrid. Eventually this will minimize the cost of energy, or could even facilitate making money by selling power into the larger grid. Owning a microgrid that is generating power offers more flexibility for the owners in managing their energy costs.

b The microgrid is energy efficient. A typical coal-fired power plant might be only around 38% efficient; meaning 62% of the original energy is not converted to electricity. Add to that another 7% loss in transmission and distribution. A microgrid with multiple generation sources is more likely to be more efficient through renewable sources, eliminating the transmission and distribution energy losses, and having the capability to recover and use heat locally. The result is higher energy efficiency and lower carbon production.

Research by Lawrence Berkeley National Laboratory sheds additional light on representing and calculating microgrid costs and benefits. Their case study ("A Framework for the Evaluation of the Cost and Benefits of Microgrids”) covered a Canadian microgrid with 10MW peak load and a 6.2 MW average load. They looked at four metrics: the reduction of electricity purchased, investment deferral, the reduction of GHG emissions, and increases in reliability. They compared the microgrid to power from the larger

Figure 14.2

utility. For reduction of electricity purchase they found the cost of electricity via microgrid to be $5 less per MWh with additional benefits related to profits for the owners of the distributed generation in the microgrid (who are possibly the customers themselves) including sales of excess power to the grid. The load reduction provided benefits to the larger grid related to investment deferral; the larger utility company can defer or doesn't need to make a capital investment. There were also substantial benefits to society related to reduction of GHGs. Finally, the study monetizes benefits related to increased power reliability that accrued to customers, the microgrid operator, and the larger grid. The take-away from this study is that while most benefits from microgrids are related to the customer, everyone benefits.

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