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Addressing Radial Feeder Challenges with Microgrids

by Randall September, ABB

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• ABB Grid Automation overview

• Overview of Radial Feeder Challenges

• How can Microgrid help

• What ABB has to offer

• Radial Feeder Microgrid Business Case

• Summary

October 24, 2018 Slide 2

Agenda

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1905 1940 1969 1982 1983 1994 2002 2004 2010 2011 2014 2015

ABB installs first Power Line Communication (PLC) and protection Signaling Equipment

ABB introduces first SCADA and network

management systems

ABB launches Micro-processor based

relays

ABB introduces EMS, GMS and DMS

applications

ABB introduces first computer based

substation control system

First redundant RTU supporting Ethernet

communication (RTU500 series)

First NCIT installations in ABB substation automation systems

ABB pioneers Wide Area Monitoring System (WAMS)

Between 2010 – 2011 ABB acquires Ventyx &

Mincom

ABB’s firstIEC 61850-9-2 digital

substation installation -Loganlea, Australia

ABB introduces worlds first Asset Health

Center solution

100,000th RTU sold

ABB sells its 100,000th Relion®

670 unit

ABB sells its 10,000th

MicroSCADA Pro license

ABB’s first electro-mechanical relays introduced

IEC founded ABB is a leading member

ABB introduces COMBIFLEX® electronic relays

ABB’s first optical FOX link installed on HV lines with integrated teleprotection

ABB develops integrated protection and control

First distributed busbar protection –REB500

ABB’s first fully integrated analog and digital Power Line Communication (PLC)

ABB introduces the Relion® family of IEC 61850 compliant relays and compliant substation automation systems

ABB Commissions 1st IEC 61850 (multi vendor) SA System Laufenberg, CH.

ABB acquires Tropos Wireless Networks

National Grid Saudi Arabia partners with ABB to introduce IEC 61850 Substation Automation Systems

ABB launches it’s pioneering Standalone merging unit - SAM600

ABB Grid Automation Overview

Slide 3

Leading the world of grid automation since 1905

2016

ABB’s first digital substation in the UK

ABB partners with Microsoft’s Azure Cloud based platform to launch ABB Ability

ABB launches it’s pioneering Microgrid enabling product -PowerStore Battery

ABB recognized for the world’s first conformance tested system engineering tools

2017

ABB invests in Enbala Power Networks to co-develop cutting-edge grid software

ABB Ability Digital Substation & Asset Health Center launched at ABB Customer World

2000

ABB introduces SCADA system for renewables

October 24, 2018

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Long-term drivers for energy storage

Challenges of the future power grid

Electricity consumption on the rise– Electrification of everything – moving towards electricity as the primary source of power– Economic and population growth will lead to increasing demand for power

Coal plant retirements – Reducing baseload power capacity – Limited resources for ancillary services on the utility grid

Growth in renewables – Governments and industry moving towards solar and wind – Intermittent generation sources can reduce reliability on the electrical grid

Electrification of transportation – More users of EVs can increase peak loads placing more strain on the electrical grid– Increase in high speed rail

Proliferation of smart grid technology– Bi-directional flow of power requires additional coordination between power supply and demand

Tax and regulatory incentives – Renewable mandates and incentives increasing demand for clean grid technologies– Potential tax benefits for storage systems (residential, commercial and utility)

October 24, 2018Slide 4

—Executive Summary

October 24, 2018 Slide 5

Challenges for distribution utilities Microgrid benefits

• Defer distribution system upgrades while manage expected demand growth

• Improve reliability performance and resiliency

• Provide voltage regulation and increase hosting capacity of network for additional renewable penetration

• Decrease demand charges by peak shaving

• Radial feeders in need of capacity upgrades for the demand growth.

• Below-average reliability and power quality metrics

• Voltage issues due to the increased Solar Photovoltaic (PV) penetration

• Peak demand charges for Distribution utility

Target is distribution utilities that can own energy storage

—Grid connected Battery Energy Storage Systems

October 24, 2018 Slide 6

—Radial Feeder challenges

—Load Growth Challenge

October 24, 2018 Slide 8

Radial feeder Load forecast, substation capacity

Distribution system cannot host the expected demand growth in future due to substation capacity

Distribution utility with radial feeders in need for capacity upgrade

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV

Aggregated Load

—Reliability Performance Measurements

October 24, 2018 Slide 9

System Average Interruption Duration Index System Average Interruption Frequency Index

System Average Interruption Frequency Index (SAIFI):

The sum of the number of interrupted customers for eachpower outage greater than five minutes during a givenperiod, divided by the total number of customers served forthe area. This metric is expressed in the average number ofoutages per year

System Average Interruption Duration Index (SAIDI):

The sum of the restoration time for each sustainedinterruption multiplied by the sum of the number ofcustomers interrupted, divided by the total number ofcustomers served for the area. This metric is expressed inaverage minutes per year

According to IEEE, North American utilities have the SAIFI median value of 1.10 interruptions per customer per year and the SAIDI median value of 90 minutes per customer per year

System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI)

—Reliability Performance for Utilities

October 24, 2018 ABB AbilityTM Velocity Suite, https://new.abb.com/enterprise-software/energy-portfolio-management/market-intelligence-services/velocity-suiteSlide 10

US utility categories and reliability performances

Utility Type Sales (million MWh)

Fraction of distribution line miles (related to total US)

Customer Per mile of distribution line (density)

SAIDI (minutes per customer per year)

SAIFI (per customer per year)

Cooperative Utility (Co-op) 41% 8

Municipal Utility (Muni) 3% 66

Investor-Owned Utility (IOU) 56% 38

0 1000 2000

ResidentialCommercialIndustrial

0 200 400

Without major events

0 1 2 3

Without major events

—Economic Impacts of Reliability Performance

October 24, 2018“Decision Addressing The General Rate Cases of San Diego Gas & Electric Company and Southern California Gas Company and The Proposed Settlements”, June 2016Finish Electricity Market Act, 2018, “Compensation for Power Cuts”

Slide 11

Example from San Diego Gas & Electric

1. Penalty/ Reward Scheme

2. Non-Delivered Energy (Costumer compensation Finnish Electricity Market Act)

Impacts SAIDI System Worst Circuit

Target (minutes) 60 585

Dead Band +/- 2 +/- 35

Increment 1 10

Annual Improvement

1%

Reward Increment

375 kUSD 125 kUSD

Penalty Increment

375 kUSD 125 kUSD

Maximum 3 MUSD 1 MUSD

SAIFI System Worst Circuit

Target (outages)

0.51 4.40

Dead Band +/- 0.02 +/- 0.35

Increment 0.01 0.10

Annual Improvement

1%

Reward Increment

375 kUSD 125 kUSD

Penalty Increment

375 kUSD 125 kUSD

Maximum 3 MUSD 1 MUSD

—Voltage Issues

ABB AbilityTM Velocity Suite, https://new.abb.com/enterprise-software/energy-portfolio-management/market-intelligence-services/velocity-suiteJ. Bank, B. Mather, J. Keller, and M. Codington, “High Penetration Photovoltaic Case Study Report,” NREL, 2013

October 24, 2018 Slide 12

US Solar Global Horizontal Irradiance Map with Planned and Operating Solar Generating Units (By ABB AbilityTM Velocity Suite)

Over Voltage: The PV generation increases the line voltage at the feed-in point.

Voltage Fluctuations: Clouds cause frequent voltage changes. Voltage regulators have ~30 second operational delay.

Impact of PV on the long radial feeder voltage regulation

In the existence of solar PV, VRs need to get replaced every year due to hundreds of thousands operation (mechanical switching) per year

—Peak Demand Charges

ABB NAM Reference Case, https://new.abb.com/enterprise-software/energy-portfolio-managementSANDIA Report, “Green Mountain Power (GMP): Significant Revenues from Energy Storage”, SAND2017-6164, May 2017, available online at https://www.sandia.gov/ess-ssl/publications/SAND2017-6164.pdf

October 24, 2018 Slide 13

Transmission Charge Capacity Charge (ABB NAM Reference Case)

Distribution utilities pay peak demand charges- Example New England Independent System Operator (ISO)

—How Microgrids can helpWhat ABB has to offer

—Microgrid

* Islanded mode: ability to provide power independently from the main power gridOctober 24, 2018 Slide 15

Microgrid Defenition

Distributed energy resources and loads that can be operated in a controlled, coordinated way either connected to the main power grid or in “islanded”* mode.

Microgrids are low or medium voltage grids without power transmission capabilities and are typically not geographically spread out.

ABB has 331 MW global installed capacity of Microgrid and BESS

Solar PV power plant

Wind power plant

Remote asset management and

data analytics

Advanced powerdistribution and

protection

Conventional power

Grid connection

Modular scalable energy storage and grid stabilization

Commercial loads

Industrial loads

Distributed control system

Residential loads

—What ABB has to offer

October 24, 2018 Slide 16

ABB - global microgrid and battery energy storage system, solution partner

AND

Consulting

Service

3rd party financing

25+ years experience 40+ executed projects

25+

Innovation, technology & productization leadership

Global sales &service network

Microgrid

control system

Energy storage and grid stabilization Renewable power

Conventional power Power distribution and protection

Leading global expertise Broad portfolio of products & services

—Radial Feeder Microgrid Business Case

—Radial Feeder Business Case – Problem Definition

October 24, 2018 Slide 18

Distribution Utility Challenges Power System Assumptions

Location: Long radial feeders with geographic restrictions

• Peak demand exceeds the substation capacity in 5 years.

• The capacity upgrade is required to manage the load growth.

• The utility pays the peak demand charges to ISO/RTO.

• The reliability performance is below the target and utility pays the penalty.

• The utility is facing increased O&M cost for voltage issues by solar PV

Load 8 MWp, 5.5 MW avg, 1% growth rate

Substation Capacity

8.5 MW

Solar PV 800 kWp

Utility Rate 0.12 USD/kWh (50% grid fee), 2% inflation rate

SAIDI 420 minutes per customer per year

SAIFI 3 times per customer per year

Reliability Impact

125 kUSD-Year as a Penalty/ Reward, 2% inflation rate

Demand Charge

100 USD/kW-Year as transmission charge, 12 USD/kW-Month as a capacity charge, 2% growth rate

System O&M Cost

425 kUSD, including extra maintenance for VRs.

—Radial Feeder Business Case - Scenarios

October 24, 2018 Slide 19

Distribution Capacity Upgrade Scenario Microgrid Solutions Scenario

These scenarios manage the demand growth, but Microgrids have multiple revenue streams.

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV

ABB Microgrid Plus Control System

ABB PowerStore Energy Storage

Aggregated Load

Substation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV Aggregated Load

—Scenario 1: Distribution Capacity Upgrade

October 24, 2018 Slide 20

Qualitative description

Peak Demand

Voltage Regulation

2

4

Distribution Capacity Upgrade

Distribution utility pays the penalty for low reliability performance.

1

Reliability 3

The operation and maintenance cost is increased due to the voltage issues occurred by PV integration.

Distribution utility pays the investment for capacity upgrades. This covers the load growth during the project duration considering the lead time.

Distribution utility pays for the capacity charge and transmission charge related to the peak demand.

—Scenario 1: Distribution Capacity Upgrade

Microgrid Knowledge Report for Berkley, published on August 17, 2018.October 24, 2018 Slide 21

Benefits Costs

Upgrade Cost 1 MUSD per mile*

Distance 5 miles

Lead time 5 years

• Manage the expected demand growth

• No impact on Peak demand charges

• No impact on reliability performance

• No impact on voltage regulation and relative maintenance costs

Quantitative description

—Scenario 2: Microgrid Solutions

October 24, 2018 Slide 22

Qualitative description

Peak Demand

Voltage Regulation

2

4

Microgrid

Distribution utility receives the reward for high reliability performance

1

Reliability 3

Voltage regulators need to switch less due to the battery voltage regulation

Distribution utility invests in Microgrid solution with lower lead time to manage the expected demand growth

Distribution utility pays less demand charge due to the Microgrid peak shaving capability

Microgrid improves resiliency and increase hosting capacity of distribution system for renewable integration

—Scenario 2: Microgrid Solutions

Lazard levelized cost of storage analysis,October 24, 2018 Slide 23

Benefits Costs

• Manage the expected demand growth by peak shaving

• Reduce Peak demand charges by 20%

• Improve reliability performance and receive rewards of 125 kUSD per year

• Decrease system O&M costs relative to voltage regulators by 25%.

Quantitative description of Microgrid (5.5 MW, 16.5 MWh)

Microgrid total cost 470 USD/ kWh**

Battery replacement cost after 10 years

175 USD/ kWh

Lead time 1 year

Microgrid O&M Cost 0.2% Microgrid CAPEX

—Radial Feeder Business Case- Results

October 24, 2018 Slide 24

20 years project life time with 9% discount rate

Microgrid is the economic solution for the Distribution utility with radial feeder in need for capacity upgrade

Scenario 1: Distribution System Upgrade Scenario 2: Microgrid

CAPEX 5 MUSD 7.8 MUSD

OPEX 27.3 MUSD 21.9 MUSD

Revenue 32.7 MUSD 34 MUSD

Net Present Value 0.4 MUSD 4.3 MUSD

Internal Rate of Return 10% 15%

Payback Period 10 years 6 years

—Radial Feeder Business Case- Results, Cont’d.

October 24, 2018 Microgrid O&M cost includes the battery replacement and the annual maintenance expensesSlide 25

Break down of Cost Benefit Analysis (20 years project life, 9% discount rate)

—Sensitivity Analysis – CAPEX

October 24, 2018 Slide 26

Impact of CAPEX on Upgrade Scenario NPV Impact of CAPEX on Microgrid Scenario NPV

Upgrade Cost, and Microgrid Cost

-10

-8

-6

-4

-2

0

2

4

6

8

10

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%

Mic

rogr

id N

PV

(M

USD

)

Change of Microgrid Cost (%)

Microgrid Scenario

-10

-8

-6

-4

-2

0

2

4

6

8

10

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%

Up

grad

e N

PV

(M

USD

)

Change of Upgrade Cost (%)

Upgrade Scenario

—Sensitivity Analysis - Key Drivers for Microgrid Scenario

October 24, 2018 Slide 27

Impact on the Net Present Value

Sensitivity Parameter Low Case (-10%)

Base Case High Case (+10%)

Impact on Net Present Value Compared to the Base Case

Microgrid Cost (USD/kWh) 423 470 517

Peak Demand Reduction (%) 18 20 22

Reliability Reward (kUSD-year)

112.5 125 137.5

O&M Cost Reduction for Voltage Regulation (%)

22.5 25 27.5

-2%

-3%

-10%

18%

2%

3%

10%

-18%

High Case (+10%) Low Case (-10%)

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Sensitivity Parameter Impact on NPV Compared to the Base Case

Microgrid Cost (USD/kWh)

Peak Demand Reduction (%)

Reliability Reward (kUSD-year)

O&M Cost Reduction for VoltageRegulation (%)Scenario 1: Capacity

UpgradeScenario 2: Microgrid

Net Present Value 0.4 MUSD 4.3 MUSD

Internal Rate of Return 10% 15%

Payback Period 10 years 6 years

Microgrid scenario have higher NPV, and IRR with 4 years less payback period

October 24, 2018 Slide 28

Summary: Microgrid/BESS benefits utilities with multiple revenue streams

Cost benefit analysis for 20 years lifetime and 9% discount rate

Sensitivity analysis on Microgrid scenario

Radial Feeder in need of capacity upgrade to manage the demand

Microgrid is more economic, providing multiple revenue streams.

Key parameters are Microgrid Cost, peak demand reduction, reliability reward, and O&M cost reduction.

Demand exceeds the substation capacity in 5 years.

-2%

-3%

-10%

18%

2%

3%

10%

-18%

High Case (+10%) Low Case (-10%)

0

2

4

6

8

10

12

0 4 8 12 16 20

Po

we

r (M

W)

Time (Hours)

Load Substation Capacity Load Forecast in 20 years

—Summary

—Microgrid Business Case for Radial Feeder

October 24, 2018 Slide 30

Key Takeaways

• Defer Distribution System Upgrade

• Manage Demand Growth

• Provide Peak Shaving

• Improve Reliability Performance

• Provide Voltage Regulation

• Increase Hosting Capacity of Distribution System

• Improve ResiliencySubstation

Circuit Breaker

Voltage Regulator

Voltage Regulator

Solar PV

ABB Microgrid Plus Control System

ABB PowerStore Energy Storage

Aggregated Load

—Developing a microgrid project from concept to commission

October 24, 2018 Slide 31

The project lifecycle

Concept Feasibility study Detailed engineering SupplyInstallation

& commissioningOptimization

Main business drivers

Business case

Analysis

Data collection

Social & Environmental Economic & Operational

Technical Site conditions, solar, wind, generation and load

Financial Subsidies, OpEx Costs, Fuel price

Technical viability Financial analysis

Different tools are required for each stage of the project lifecycle

– HOMER Quickstart (http://quickstart.homerenergy.com/)

– Financial model

– HomerPro (Energy flow)

– Power factory, PSSE, PSCAD (Loadflow, Stability, Protection)

– MatLab (Tuning)

Each tool has its own specific application

Operations & Maintenance

Microgrid Project Lifecycle