California Seeks to Put a Monetary Value on Microgrid Reliability, Other Benefits

How do you place a monetary value on microgrid reliability and other benefits, such as providing greenhouse gas reductions and boosting public confidence?

monetary value on microgrid reliability

California wants to place a monetary value on microgrid reliability.

That’s just one of the many issues being explored as the California Energy Commission (CEC) continues to map out microgrid policy in a series of workshops.

As part of the mapping project, the commission plans to release a survey in the near future, and hopes that 150 to 250 industry members provide input. In addition, the commission will soon complete a website that focuses specifically on the microgrid roadmap issues, with an eye toward finishing the roadmap in October.

The overall goal of the microgrid roadmap effort, said Mike Gravely, deputy division chief of the CEC’s research and development division, is to identify ways to commercialize microgrids and help vendors experience success.

Most of the microgrids Gravely has looked at focus on reliability and service, and making money is a secondary issue, he said. “Now the question is, ‘How to make money?'” He wants to develop a way to monetize some of the benefits of microgrids. “We need to come up with business cases that show the costs and the value streams,” he explained. “What’s the value of providing reliability?”

In addition to investigating this issue, the commission is looking at developing a microgrid definition or definitions and establishing standards, said Gravely.

“One of the first big things we will do is come up with a series of definitions for microgrids,” said Gravely. “We would like general consensus on the definition that the majority will accept.”

Identifying standards and protocols is also important, he said, so that industry members know how to design microgrids. For example, Gravely is working on safety protocols for storage. If, for instance, firefighters had to go to a home that had a storage system, the safety protocols would tell the firefighters how to turn off the storage system in the case of a fire.

“In the old days, you would throw a breaker,” he said. “But if you have PV on the roof and storage in the garage, you can’t do that.” Such protocols generally evolve into standards. Right now, the department is looking at developing protocols for smart inverters, he noted.

The safety of lithium ion batteries is an ongoing issue, Gravely noted. There have been a few instances where they caught fire under hot conditions.

“Lithium ion has thermal challenges and they have to be addressed.  The batteries must be manufactured to a certain quality. California will buy 10-, 20- and 30-MW batteries, and the bigger you make them the more challenges to keeping them cool.” He added that most of the problems with the batteries have been related to how they were manufactured — not to the technology.

When the commission conducts research into the batteries, manufacturers are asked to show their heat management profile. In spite of their ocassional thermal challenges, lithium ion batteries seem to perform the best, providing the largest amount of energy in the smallest space.

During the next microgrid road map meeting, the commission will look at the key elements of microgrid policy that will allow microgrids to be commercialized, said Gravely.

Microgrids, unlike solar panels, are often unique to specific situations, which makes standardization a challenge. But standardization will help vendors succeed, he said. The commission wants to create a model that could be successful without government funding.

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