Critical Infrastructure Resiliency & Microgrids: Policies, Incentives, and Promise

Thomas Bourgeois, U. S. Department of Energy Northeast CHP Technical Assistance Partnership / Pace Energy & Climate Center

Critical Infrastructure Resiliency Driving Microgrid Policy

o CT P.A. 12-148 Section 7, July 2012, establishes Microgrid Pilot Program in response to the Two Storms Report (Hurricane Irene, Oct. 29, 2011 Snowstorm). o NY Commission 2100 Report, January 2013, calls for accelerated pace of DG/Microgrids deployment as component of future resiliency planning. oRutgers Econ. Impact of Sandy report assessed $11.7B in state GDP lost. Gulf Coast States passed legislation for State facilities.

NY State Microgrids Study

A.3008D/S.2608D—Part T (pg. 47) of the Article VII Transportation, Economic Development, and Environmental Conservation (“TED”) 2013 NYS Budget Bill requires the NYS Energy Research & Development Authority, the Department of Public Service and the Division of Homeland Security and Emergency services, to develop recommendations regarding the establishment of microgrids in the state of New York.

Media Reports Tout Reliability Benefits of Microgrids

Post Superstorm Sandy, Hundreds of stories, similar to this, have driven awareness and interest in Microgrids:

“Microgrids Keep Power Flowing Through Sandy Outages: Local power generation with microgrids showed the benefits of reliability during Hurricane Sandy. “

Source: Martin LaMonica, November 7, 2012 MIT Technology Review.

Emergence of Resiliency as a Policy Priority

Critical Infrastructure Resiliency is a Fast Emerging Concern

o In July 2012, CT establishes Microgrid Pilot Program in Response to the Two Storms Report (Hurricane Irene, Oct. 29, 2011 Snowstorm) (P.A. 12-148 Section 7).

o NY Commission 2100 Report January 2013 calls for accelerated deployment of DG/Microgrids as component of future resiliency planning.

Business Continuity

o Business downtime, economic losses (beyond traditional CI definition).

o Cascading problems affecting transport (unavailability of gas in NJ post Sandy).

Emergency Preparedness & Planning

o Developers reporting inquiries from campuses looking to keep students sheltered.

o Nursing homes, public housing, large multi-family buildings keeping people “safe-in-place.”

New Interest in Resiliency Incentives o CHP increasingly recognized as an important tool to

support critical infrastructure, emergency preparedness and provide for business continuity

o Appropriately designed, configured and operated CHP can offer significant social benefits, but with added costs to the site

oPolicymakers are responding with a new commitment to CHP that recognizes the societal value of high reliability for important services

Critical Infrastructure “Critical infrastructure” refers to those assets, systems, and networks that, if incapacitated, would have a substantial negative impact on national security, national economic security, or national public health and safety.” Patriot Act of 2001 Section 1016 (e)

Applications:

o Hospitals and healthcare centers

o Water / wastewater treatment plants

o Police, fire, and public safety

o Centers of refuge (often schools or universities)

o Military/National Security

o Food distribution facilities

o Telcom and data centers

Power Outage Cost Estimates

Superstorm Sandy

oNearly $20 billion in losses from suspended business activity.

o Total losses estimated between $30 to $50 billion.

o Two-day shutdown of the NY Stock Exchange, costing an estimated $7 billion from halted trading.

oRutgers estimates economic losses of $11.7 billion for New Jersey GDP.

New York University Manhattan, NY

o13.4 MW natural gas-fired CHP system.

o One of few sites operating in lower Manhattan, in wake of Superstorm Sandy.

oProvides electricity to 22 NYU buildings, and provides heat, hot water, and chilled water to 37 NYU buildings.

In addition:

is a significant contributor to NYU’s Climate Action Plan, with the goal of reducing GHG emissions 30% by 2017. o 23% reduction in GHG emissions.

o 68% reduction of criteria pollutants (NOX, SOX, PM-10).

o Hospital & Nursing Home campus with natural gas-powered CHP system

o System consists of five 250 kW IntelliGen engines

o When the macrogrid went down during Sandy, South Oaks transitioned to “island mode” with no interruption of power.

o The CHP System provided 100% of the facility’s electricity, thermal and hot water demands for 15 days.

o In addition to meeting the hospital’s needs, South Oaks admitted evacuated patients from nearby healthcare facilities, refrigerated medications, and housed hospital staff who had lost power.

South Oaks Hospital Amityville, NY

The Brevoort Manhattan, NY

o Residential high rise with natural gas-powered CHP system.

o Four 100 kW CHP units powered all 290 apartments through Sandy.

o Normal occupancy is 720 people. During Sandy, the Brevoort was able to house and provide power to 1,500 people through the storm.

o “Powered by our CHP system, we were the only building on lower Fifth Avenue able to provide energy and full service to our residents.” - Diane Nardone, President of the Brevoort coop board.

o The Brevoort was able to maintain power for central boilers, domestic water pumps, all elevators and all apartments.

Fairfield University Fairfield, CT

o4.6 MW on-campus CHP system.

o Fairfield University only lost power for a brief period during the peak of Hurricane Sandy.

oWhile the Town of Fairfield was without power, the University’s CHP-powered buildings served as a refuge for off-campus students and the community as a whole.

Princeton University

o15 MW system supplying 100% of the heat and hot water requirements and 50% of electric energy for the campus (27 MW campus peak demand).

oHad a brief trip of the turbine when the utility feed to the plant failed - generator was synchronized with the utility.

oPrinceton lost all four utility feeders for two days.

oOn account of its Microgrid system with CHP, Princeton was able to keep the students dorms, library, all critical research centers, emergency response center, infirmary, and refrigeration powered up.

Critical Infrastructure & CHP Link

In New York, NYSERDA has long championed CHP’s role in critical infrastructure resiliency and emergency preparedness.

To qualify, CHP systems must:

obe capable of continuing operation during grid outages.

o locate equipment “high and dry” in flood zones.

Bonus incentives are available for customers

o locating in Con Edison’s constrained zones.

o locating in a designated Center of Refuge.

US DOE’s CHP Technical Assistance Partnerships’ (CHP TAP’s)Role oIn February 2012, the US DOE’s Clean Energy

Center formed a working group on Critical Infrastructure.

o ICF International prepared a report, April 2013 on CHP and Critical Infrastructure for the US DOE, Oak Ridge National Labs with co-authorship by CHP TAPs team.

oUS DOE conducted a very successful webinar on April 3, 2013 on the topic of CHPs Role in Critical Infrastructure support.

New Report on CHP in Critical Infrastructure

http://www.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_critical_facilities.pdf

Combined Heat and Power: Enabling Resilient Energy Infrastructure for Critical Facilities

oProvides contract for CHP in critical infrastructure applications. oContains 14 case studies of CHP operating through grid outages. oPolicies promoting CHP in critical infrastructure. oDetails how to design CHP for reliability.

http://www.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_critical_facilities.pdfhttp://www.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_critical_facilities.pdf

Combined Heat and Power: Enabling Resilient Energy Infrastructure for Critical Facilities

Authors: Anne Hampson, ICF International

Tom Bourgeois, Northeast Clean Energy Application Center Gavin Dillingham, Gulf Coast Clean Energy Application Center Isaac Panzarella, Southeast Clean Energy Application Center

Date Published: March 2013

Prepared by ICF International

For OAK RIDGE NATIONAL LABORATORY Oak Ridge, Tennessee 37831-6283

http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_critical_facilities.

pdf

http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_critical_facilities.pdfhttp://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_critical_facilities.pdf

Incentives for CHP: New York CHP Acceleration Program (PON 2568)

o NYSERDA is offering incentives for pre-qualified CHP installations ranging from 50 kW to 1.3 MW through PON 2568

o Program delivery mechanism is a catalogue of previously evaluated CHP systems

o All systems in the catalogue are capable of both running every day and running during grid outages to power the site’s priority loads

o Incentive program is expressly designed to foster CHP as a mechanism to provide greater resiliency and reliability at host sites

o This program is unique in that NYSERDA only accepts applications from approved CHP system vendors

o All incentive payments through this program are made to the CHP system vendors

Incentives for CHP: New York Systems Greater than 1.3 MW

o NYSERDA is offering $36 million in incentives for CHP installations larger than 1.3 MW through PON 2701

o System must have black start capability

o If the site is located in a flood zone, all necessary CHP components must be located above the expected flood level (lesson learned from Sandy)

o $0.10/kWh + $600/kW (Upstate) or $750/kW (Downstate)

o Bonus Incentives Available for the following features:

o “Facilities of Refuge” and projects serving critical infrastructure

o Projects located in utility-identified load service areas of particular interest

o Demonstrate superior performance, measured by fuel conversion efficiency

Incentives for CHP: Connecticut

oCT Microgrid Grant and Loan Pilot Program

oProgram enacted in response to the widespread power outages resulting from Tropical Storm Irene in 2011.

o State has awarded $18 million in July 2013 to selected applicants.

oGovernor Malloy has requested an additional $30 million in program funding to support the most promising projects.

o36 applications received, 28 projects deemed technically viable, 9 projects funded.

Emerging Drivers of CHP

o Benefits of CHP recognized by policymakers

o President Obama signed an Executive Order to accelerate investments in industrial EE and CHP on 8/30/12 that sets national goal of 40 GW of new CHP installation over the next decade

o Favorable outlook for natural gas supply and price in North America

o Opportunities created by environmental drivers

Executive Order: http://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-

accelerating-investment-industrial-energy-efficiency Report:

http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdf

http://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www.whitehouse.gov/the-press-office/2012/08/30/executive-order-accelerating-investment-industrial-energy-efficiencyhttp://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdfhttp://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdfhttp://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdfhttp://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdf

CHP and Microgrids: the Benefits • Saves money, reduces operating costs.

• More predictable, hedge against rising costs

• Greater efficiency.

• Reduce GHG emissions (environmental performance).

• ..and following Superstorm Sandy, Hurricane Irene and October 2011 snowstorm – Resiliency, Business Continuity, Emergency Preparedness!

CHP versus Backup Generation

oCHP provides continuous

benefits to host facilities,

rather than just during

emergencies.

oCHP can result in daily operating cost savings.

oCHP can offset capital costs associated with investments in traditional backup power.

CHP versus Backup Generation

CHP :

Tested

Proven

Economic

Reliable

Clean

Key Policy Issues Legal and regulatory o Clarity on the regulatory treatment of the project: is it a

qualifying facility? o Contracting / Organizing multiple unaffiliated entities to

participate. o How the microgrid affects safe & reliable operation of the

macrogrid. o How should standby rates reflect the probability of DG

failing? The deferred cost of grid upgrades? Providing critical v. peak power?

o Project risks and responsibilities of owner/ operators and those served.

o Interconnection: what design and operating requirements should be imposed on DG of certain sizes and types?

Key Policy Issues

o Ownership Models o Private o Public o Utility

o Financial o New markets for services? o Incentives for social benefits?

CHP Assistance from CHP TAPs

Site Request

CHP Qualification

Feasibility Study

Investment Grade Analysis

Procurement Installation Operation

CHP TAP Project Support • Over 225 assessments & 700 tech

support activities

• Represents over 1.5 GW installed or in development

CHP TAP Capabilities • Qualification through Feasibility Analysis

• CHP Expertise thru all Steps

• Bringing customers and CHP engineering community together

Thank You!

Thomas Bourgeois (914) 422-4013

TBourgeois@law.pace.edu

Beka Kosanovic (413) 545-0684

kosanovi@ecs.umass.edu

A program sponsored by

Vulnerable Populations South Oaks Hospital & Nursing Home Long Island, NY oOperates a 1.3 MW CHP system

oFive 250 kW IntelliGen engines

o400-ton hot water absorption chiller

oDuring the blackout in August 2003, South Oaks Hospital never lost power.

o During Superstorm Sandy, South Oaks Hospital operated continuously for 15 days, isolated from the grid, providing full power and thermal energy to the hospital and nursing home

Some of the Challenges

o Clarity on the regulatory treatment of the project (is it a qualifying facility)

o Organizing multiple unaffiliated entities to participate (sharing benefits & costs)

o How to optimally build out a project, estimate connected parties and future revenues

o form of ownership: public, private, public-private partnership (hybrid)

Thank You! Thomas Bourgeois

TBourgeois@law.pace.edu (914) 422-4013

A program sponsored by

http://www1.eere.energy.gov/manufacturing/distributedenergy/ceacs.html

mailto:TBourgeois@law.pace.edu