Understanding Microgrid Project and Operational Requirements

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In a new special report series brought to you by Microgrid Knowledge and Siemens, we’re providing a guide to help microgrid developers avoid the pain points that can wreck the financial and operational assumptions for a project. This second article in the series outlines Step 1: Understanding the Microgrid Project and Operational Requirements. 

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Download the full report.

Every new microgrid project starts with what the customer needs. Before a customer commits to a specific project scope, it’s helpful to assess what’s ahead with potential partners. However, this isn’t always possible if a customer has already committed to a project design.

Depending on the stage of planning, there are two paths to leverage the power of partners to understand microgrid project and operational requirements based on what the customer needs. If the customer has not yet committed to a rough system design, developers should talk to a system provider to plan an optimal system for fewer surprises and issues down the road. If the scope of the project is already defined with the customer, developers should engage with system and equipment providers to identify key unknowns. It’s not too late at this stage to close the planning gap and avoid surprises and costs later.

Potential unknowns

A microgrid that delivers everything a customer needs can sound simple on the surface when not all of the relevant considerations and obstacles are on the table. However, there are always important unknowns that, if not identified at this stage, can throw a project off track.

  • Time-of-use pricing: If a customer’s top priority is to reduce energy costs, it’s critical to know if time-of-use pricing is available from or imposed by the local utility. This would create a need for an advanced microgrid controller that can respond to market pricing signals and optimize use of local generation sources versus grid power.
  • Energy supply rules: A customer might assume the net energy metering policy or wholesale energy market participation rules in its state or territory will turn distributed energy resources (DERs) within its microgrid into revenue generators, but there could be restrictions on power exports to the grid that wreck those assumptions.
  • Tariff changes: Comparing a customer’s pre-microgrid energy bill to a hypothetical energy bill in which its operations are supported by a microgrid is far from an apples-to-apples exercise. Deploying a microgrid can result in significant tariff changes from the local utility that need to be understood during early planning.
  • Regulatory and policy changes and deadlines: No one has a perfect crystal ball, but some regulatory changes are signaled earlier and more clearly than others. Sunsetting incentives might make it imperative to speed up development, while a new policy or regulation taking effect in the near future might be cause for a pause.

Commercial and industrial customers typically share the same three goals — cost savings, increased reliability and more sustainable operations. However, developers need to know how the customer prioritizes each. Customers should answer several questions so that the developer can work with vendors to better design a microgrid based on their priorities, including:

  1. Does the customer want to make the most money possible and ensure the system pays for itself as quickly as possible?
  2. Is the customer willing to tolerate a potential power outage if grid power fails or must the lights stay on through all circumstances and conditions?
  3. How does the customer want to operate the microgrid control system — with someone on-site, someone remote or via automated switching?

Identifying unknowns and customer priorities are key ways to determine project and operational requirements that will impact the decisions developers make in each of the following steps regarding studies, procurement, balance of plant and system integration.

The Definitive Guide for Microgrid Developers

In the coming weeks, this special report series will explore the following topics:

  • Step 2: Conduct studies that provide real, project-specific answers
  • Step 3: Make the right procurement decisions
  • Step 4: Manage balance-of-plant considerations
  • Step 5: Smoothly integrate the project without costly scope gaps

Download the full report “5 Steps to Develop Microgrids Easier, Faster and at Less Cost: The Definitive Guide for Microgrid Developers,” courtesy of Siemens to learn more.

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