Demand Energy is set to begin operating a pioneering solar plus storage microgrid that achieves several firsts for the New York City power grid.
News of the project milestone comes just three months after Italian utility giant Enel acquired Demand Energy, a move that made a splash in the microgrid industry and significantly changed the fortunes of the small company.
The microgrid will serve the Marcus Garvey Village, a 625-unit mixed-income apartment complex. It will be the first microgrid on the city’s power grid to:
- Win approval to use lithium-ion battery technology for behind-the-meter use under the city’s strict fire safety rules
- Serve an affordable housing development in the city
- Participate in Consolidated Edison’s Brooklyn-Queens Demand Management (BQDM) Program, designed to use non-wires alternatives to save the utility money by averting construction of a substation.
The project also employs unique microgrid financing in its use of non-recourse debt and a shared savings and shared revenue model, according to Shane Johnson, vice president of global operations for Demand Energy.
Microgrid economics
The microgrid will generate stacked revenue from several sources, including about $1 million from Con Edison’s BQDM program. Con Edison pays the microgrid to be available to the grid during peak periods. The payment reduces the overall microgrid cost.
Demand Energy will own and operate the microgrid, which is being financed via a loan from the New York City Energy Efficiency Corporation (NYCEEC). The company will repay the debt from revenue generated by various streams, such as demand response programs or by leveraging electricity supply cost savings. Demand Energy splits the revenue and savings with the customer.
“They [Marcus Garvey Village] don’t have any risk and no money down and they get a piece of the savings. So, it’s an interesting business model that way,” Johnson said in an interview.
During normal operations, the microgrid optimizes its resources – solar, storage and a fuel cell — by way of Demand Energy’s Distributed Energy Network Operating System (DEN.OS). The software leverages the microgrid’s assets against grid electricity pricing.
“It understands what the hourly rates are, it understands what the demand charge is. And what it does is try to find the optimum economics, which means the maximum savings it can produce in a 24-hour period given that data,” Johnson said.
While the microgrid focuses primarily on reducing demand charges, the software also seeks out energy market plays where they make sense.
Courtesy of L+M Development Partners
The software does all of this within some very specific constraints. A key technical aspect of the project is the ability of DEN.OS to ensure that the housing development self-consumes any energy it generates, without exporting to the grid.
In addition to providing economic benefits, the islandable microgrid will power parts of the residential complex during grid outages, including a central area where community residents can gather.
The microgrid includes a 400-kW solar photovoltaic system and a 400-kW fuel cell from Bloom Energy, 300 kW/1.2 MWh lithium-ion batteries from LG Chem and an inverter from Princeton Power. L+M Development Partners is acting as the developer.
Extensive talks on battery safety
Johnson described extensive negotiations with fire safety officials who have been wary of potential fires from lithium batteries in the densely populated metropolis. The battery will be housed outside.
“We have developed a really good relationship with the agencies in New York City,” Johnson said. “It was a long and arduous road to work with them through a number of different testing processes and validation of the technology to ensure there would be a safe system.”
Installation of the battery is in keeping with city’s goal to achieve 100 MWh of energy storage by 2020. Storage is expected to play a key role in meeting the city’s plans to cut greenhouse gases 80 percent by 2050. The microgrid also helps the city reach its solar energy targets.
Demand Energy expects the solar plus storage microgrid to be “operational ready” next week.
“Growing as fast as we can…”
Launch of the microgrid comes as Demand Energy positions for significant growth, following its purchase by Enel Green Power North America, which recently opened its headquarters in Massachusetts.
The company has several other projects now underway, including another in New York — a solar plus storage project for a residential complex in Riverdale.
“Right now we are busy growing as fast as we can rationally do so, and digest all of the incoming opportunities,” said Erick Petersen, vice president of marketing & business development. “We were a 24-person organization in January that joined a 60,000-plus organization. We have projects coming at us literally from around the world as a result of ENEL’s footprint.”
Based in Rome, Enel operates in 30 countries across four continents and has net installed capacity of approximately 83 GW. Its renewable energy division, Enel Green Power, has installed capacity of 36 GW across 24 countries. In North America, it operates as Enel Green Power North America, which operates over 100 plants with a managed capacity exceeding 2.8 GW.
Stacked Revenues for Marcus Garvey Solar Plus Storage Microgrid
BQDM Load Relief Compliance. Called when the day-ahead forecast is projected to 93 percent of the summer forecasted peak
Demand Charge Management Optimized Load management from the combined solar + fuel cell + building load + battery operations
Market Participation: Day-ahead hourly pricing, NYISO winter demand reponse, Con Edison DLRP program
Resiliency: Provides back-up power for critical facilities in the event of a grid outage
Learn more about solar plus storage microgrids on Microgrid Knowledge.
