Despite recent experiments with deregulation, the current top-down utility paradigm has remained essentially unchanged for a century. Large central station generators provide an undifferentiated power product over a high voltage transmission system. Consumer needs are not undifferentiated in two important ways. Electric applications vary dramatically in terms of the value of reliability. Consumers vary dramatically in their willingness to pay to reduce the environmental impact of their energy consumption. Utilities have started to offer somewhat differentiated products through new tariff structures, which include interruptible rates and green pricing programs. This can only go part way. Customers of green pricing programs receive electric service that is delivered over the same utility system as all other customers. It is indistinguishable at the customer level from other electric service.
Throughout the developing world the traditional electric system does not meet the reliability requirements necessary for a modern economy. The electric system in the United States has traditionally been very reliable with an average of only 92 to 214 minutes per year of outage depending on the region, but outages have been increasing rapidly. The highest levels of reliability can only be supplied by on-site generation because most electric service outages are caused by disturbances in the distribution system. Distributed resources, such as on-site generation and “demand response” load management options also reduce the need for new high voltage transmission lines, which are very costly, contentious, and time-consuming to permit and construct.
Traditionally, on-site or distributed generation was limited to reciprocating engine gen-sets for backup power. New forms of distributed generation are improving rapidly. These include photovoltaic solar panels, small wind turbines, modular biomass gasifiers, fuel cells and micro-turbines. Many of them can supply combined heat and power. New forms of energy storage are also being developed, including flow batteries, ice storage, and most notably electric vehicles.
Electric vehicles are a disruptive technology to the electric power industry. Mass adoption could be a substantial new source of revenue, but smart charge controllers will be necessary to prevent undue stress on the system. Smart charge controllers that communicate with a smart grid offer the possibility of adding stability, reliability and resilience to the overall system.
The communication capabilities envisioned by a smart grid give utilities the ability to control distributed generation and relatively small loads the way they currently control their large generating units. This can reduce system costs and increase reliability in a variety of ways. For example, combined heat and power systems can produce power at lower cost than traditional large utility generators whenever the heat is sufficiently valuable. This is despite the economies of scale of larger generators. During peak load periods these resources can reduce the stress on the system and the need for utilities to run their most expensive peaking plants.
The greatest benefit of these resources occurs during system emergencies caused by the sudden loss of a major generating unit or transmission lines. Large generating units cannot be started quickly. Utilities prepare for these contingencies by always having a substantial portion of their generating portfolio operating at part load. This increases emissions, fuel and maintenance costs. When needed these plants are then called upon to ramp as quickly as possible to compensate for the power that was suddenly lost. Unfortunately, large plants cannot ramp very quickly. In these situation smaller resources, whether they are distributed generation, air conditioners, or electric vehicle chargers can turn on and off almost instantaneously. An air conditioner or refrigerator may only need to be turned off for a few minutes to give the larger units time to adjust. With enough of these units under smart grid control the utilities can run all of their large units at their most efficient operating point but still have enough time to bring on new units when needed.
Microgrids are a natural extension of these concepts. A micro-grid has the ability to operate independently from the grid. There already exist many isolated microgrids in remote areas or on islands. The smart grid has created new interest in microgrids that can switch at will from being connected to a central grid or operating independently (islanded) from the grid.
With this switching ability and distributed generation or storage the entire load becomes controllable. Load management can dramatically reduce the cost of a microgrid and extend its ability to operate independently. Microgrids are also attractive because they have the potential to be mostly or even entirely powered by renewable sources. This is an unrealistic goal for large grids for a variety of reasons.
There are at least 5 use cases for a microgrid. The most promising applications represent combinations of these use cases.
1.Applications that require reliability unattainable without distributed generation or storage.
?e.g. Data centers, communications facilities
2.Customers of unreliable utilities, such as in most developing country.
3.Facilities that must be prepared for extended emergencies, even if they are unlikely
?e.g. military and public safety facilities
4.Individuals and organizations that want cleaner power than the utilities offer.
5.Utilities may in the relatively near future need to require microgrids in areas with large concentrations of solar or wind power as a way to reduce local fluctuations in power from passing clouds and gusty winds.
HOMER’s Role in Microgrids
HOMER is well recognized as the de facto global standard for analysis of microgrids that are completely isolated grids, such as on islands or remote areas. These grids represent a complex optimization problem because the least cost solution is often some combination of four different kinds of resources.
1.Generators with low capital costs and high operating costs, such as fossil fuel fired generators
2.Renewable resources with high capital costs and low operating costs and emissions
3.Storage, which is expensive and not always very durable, but very flexible
4.Load management in a variety of different forms.
Each potential project has a variety of site-specific resources, load requirements, and other factors with substantial uncertainty about their value and how it may change in the future. This has driven the design of HOMER as a fast and easy to use tool that can identify optimal solutions for a wide range of scenarios. Even if a micro-grid is sometimes connected to a central grid it still poses these same analytical challenges plus some additional ones.