NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

DOE - OE Microgrid Cost Study

Annabelle Pratt for Julieta Giraldez

EPRI-Sandia National Laboratories Secure, Resilient Microgrid Symposium

Baltimore, August 30th 2016

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Objective

• Identify the costs of components, integration and installation of U.S. microgrids and project cost improvements and technical accelerators over the next 5 years and beyond Information could then be used to develop R&D

agendas for the development of the next generation microgrids

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Commercial/ Industrial

6%Community

11%

Utility Distribution15%

Institutional/ Campus

10%Military5%

Remote53%

Direct Current0%

Objective

• Scope of microgrids Key Market Segments

– Commercial/Industrial– Community

New Microgrid Power Capacity Market Share by Segment, World Markets: 2Q 2016

(Source: Navigant Research)

Commercial/Industrial13%

Community12%

Utility Distribution12%

Institutional/Campus27%

Military13%

Remote22%

Direct Current0%

New Microgrid Power Capacity Market Share by Segment US Market: 2Q 2016

– Campus/Institutional– Utility Distribution

– Remote

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Expected Outcome

• Contribute to providing better transparency and standardization in the reporting of microgrid costs Better able to determine individual components’ contributions to total

system price Develop granular factors and eliminate subjective pricing parameters

that may influence customer system value Identify differences

– across system configurations – across market segment and

component– between installation costs,

component prices, and system prices Source: Charge Bliss

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Challenge

• Particularly challenging to generalize costs Every installation has unique design and

architecture characteristics that affect the overall cost of the individual microgrid components

E.g., unit costs per size such as $/MW installed DG capacity may vary from one design to another because of application requirements

Cost projections made under defined assumptions and scenarios

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Current Practices

• Companies do internal market research• Market Analysis Companies (Navigant

Research & GTM) Mainly track projects and report costs

in ranges of $/MW of Capacity Installed Do not include any breakdown of costs No standardization in reporting costs

o Microgrid per DOE definition?o Brown field/Green field projectso Existing assets

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Approach

• Collect and classify microgrid cost database: Along with key industry partners, examine existing

microgrid cost databases Classify microgrid costs and identify the range of possible

microgrid applications and functionalities to divide the market into segments

Identify costs, technical drivers and barriers• Develop bottom-up model for projecting future

microgrid costs• Build automated microgrid cost database for future use

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Sent survey to Microgrid Tracker contacts, inviting them to provide cost information

– ~ 45 projects with partial or full breakdown of costs

Still waiting on several responses Expected to provide detailed

breakdown on costs on ~ 70 projects

Data Collection

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Querying database to down-select projects Sent survey to collect info

– Stage of the project, final component sizes, etc.– ~ 50 users responded and 10 are willing to provide cost information

Access to GTM’s U.S. Microgrid Market Quarterly Update

– 237 project entries; over 2.5 GW of U.S capacity

– Total or partial cost information on 95 projects

Subcontract being signed

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Other Partners Direct Work with NREL

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Other Sources of Data

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Existing Microgrid Cost Study Data

• Characteristics to validate NREL’s database and determine the focus for the data collection efforto Regional o Capacity per Market Segment in MWo # Projects per Market Segmento Capacity by DERo # Projects with breakdown of controls and soft

costs

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MG Cost Study Data – by Location

State [MW] ProjectsNew York 312.7 19California 94.6 11Connecticut 20.4 7Marlyland 67.6 5Alaska 37.1 5New Jersey 37.2 4Texas 140 3Oregon 23.3 3New Mexico 4.3 2Colorado 31.1 1Pennsylvania 16 1Utah 11.2 1Illinois 9.4 1Florida 7.0 1Vermont 6.5 1Washington 5 1Delaware 4.9 1Maine 1.6 1Hawaii 0.2 1

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MG Cost Study Data - by Capacity

Campus/Institutional 53.7%

Commercial 3.5%

Community 36.5%

Remote 6.4%

MG Cost Study Project Data by CapacityCampus/Insti-tutional 47.0%

Commercial 26.0%

Community 20.2%

Remote 6.8%

GTM Data by Capacity

Campus/Institutional 47.7%

Commercial 8.1%

Community 15.1%

Remote 29.1%

Navigant Data by Capacity

51%

38%

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MG Cost Study Data - by # Projects

Campus/Insti-tutional 31.1%

Commercial 14.9%

Community 40.5%

Remote 13.5%

MG Cost Study Project Data by # Projects Campus/Institutional 40.1%

Commercial 16.7%

Community 26.6%

Remote 16.7%

GTM Data by # Projects

Campus/Institutional 24.7%

Commercial 21.3%

Community 21.3%

Remote 32.6%

Navigant Data by # Projects

39%

12%

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MG Cost Study Data - by DER Capacity

Diesel 17.1%Natural Gas

7.1%

CHP 58.1%

Solar 9.9%

Wind 1.5%Storage 5.7% Fuel Cell 0.7%

MG Cost Study Data by DER Capacity

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MG Cost Study Data – by Non-DER Costs

• Of the 74 projects in current database 31 have soft cost breakdown 29 have microgrid controls costs

• Special emphasis Controls/Software costs System Integration costs “Soft costs”

What ranges in % of total project costs? How do project costs without system control and/or “soft

costs” compare with projects with such data?

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• No linear relationship found in the normalized cost in $/MW with regards to characteristic and design variables:

• The team is currently working on multi-regression and quantile regression models Size of the dataset is small for statistical analysis models In any attempt to subdivide the dataset, the size of the

subgroups are too small to provide any meaningful results

Preliminary Results

size, % energy storage, % renewable energy penetration, etc.

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Lessons Learned

• Data Collection effort takes time! Most of the companies that have thedata are not in the business of providing data…

o Data not readily availableo It is not part of their daily job!

• Existing microgrid databases only track projects but do not contain detailed cost information

• A lot of microgrid sites contain legacy equipment and are built in phases Considerable effort goes in homogenizing the dataset

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Thank you!

• We need …

annabelle.pratt@nrel.gov , julieta.giraldez@nrel.gov