Module 11 -Cost Estimation This module covers how to estimate project costs including: –Equipment costs – combination of procurement and installation (including construction) costs associated with the microgrid equipment –Design costs – costs for A&E to perform a detailed design as well as a portion of the engineering analysis necessary to design a microgrid –Engineering costs – costs to do detailed engineering analysis of the performance and controls for the microgrid –Overhead costs – costs associated with other entities such as city or military personnel, regulatory agencies, etc. necessary to install the microgrid –If overhead costs are not known, these costs are factored into the 25% contingency cost factor to estimate overall costs for a project 1

Elements of cost estimation To simplify the cost calculation, the cost components are broken down into the following categories: –Installation Costs – costs to procure and install all equipment involved in conceptual designs including construction firm overhead costs Cost for construction overhead for installation can be optionally be calculated separately from equipment procurement costs and then tabulated as long as this is done consistently throughout the estimation process –Design and Engineering Costs – costs for detailed A&E firm design plans, and engineering involved in installation, testing and final implementation of conceptual design. Estimated to be 25% of the total installation costs –Contingency Costs – Additional 25% contingency added to account for unanticipated costs associated with the conceptual design such as base or city planning related costs. –Overall Construction Costs – Sum of installation, design and engineering as well as contingency costs. Approximately 1.5X of installation costs –If any of these costs are more directly known, for example design costs are $350K, from an estimate from an A&E firm, these costs can be substituted for this formula used to estimate these costs. 2

Installation costs Installation costs include the following cost components –Distribution Infrastructure Costs –Generator Costs –Cyber Security and Controls Costs –Retrofit Costs (if needed) –CHP, PV and Energy Storage (if included) –Labor for installation 3

Distribution infrastructure costs Distribution infrastructure costs are all costs associated with connecting clusters of buildings together using underground or overhead conductors. This includes: Cabling – costs of conductors (overhead (OH) or underground (UG)) Trenching and Conduits – trenching, duct bank and conduit costs for UG cables; OH conductors would be costed for pole structures Manholes – access to buildings and connections for UG systems Transformers – it may be necessary to install transformers to connect building loads to the microgrid if existing transformers cannot be used; transformers are also needed to step up voltages from generators to medium voltage levels 4

Generator costs Generator costs are all costs associated with providing N-1 redundant generation to individual buildings or clusters of buildings. This includes: Generators – Natural gas, diesel, microturbines, fuel cells, etc. which supply the main energy source to the microgrid ATS – Automatic transfer switches to connect and disconnect backup generators from critical building loads Parallel Switchgear – In some cases more expensive parallel switchgear is required to connect multiple generators together Additional Fuel Storage – Additional fuel tanks to supply diesel fuel to diesel engines for longer duration outages; can also use propane storage for natural gas engines; some engines are rated for other sources like JP or biofuels during emergency conditions 5

Retrofit costs Retrofit costs are all costs associated with upgrading building service equipment to meet the DBT, such as raising equipment for flood conditions. This includes: Relocation of Service equipment – Switchboards, panelboards, transformers, and wiring to be above the DBT for the building New Equipment – if equipment cannot be relocated, additional or duplicate equipment must be provided Demo/Restructuring – Any costs associated with demolition and restructuring of the existing building structure in order to be able to supply power to meet the DBT 6

Example of retrofits Flood Zone Raise equipment above flood zone Install additional Backup generation Building Building electrical infrastructure

CHP, PV and energy storage costs CHP, renewables and energy storage are all costs associated with utilizing any of these opportunities with the conceptual designs to provide additional benefits. This includes: CHP – combined cooling, heating and power; excess heat of building used to supply building heating and cooling relieving electrical requirements and making system more reliable Renewables – use of renewables to offset generation use to reduce fuel requirements and emissions Energy Storage – use of energy storage to provide non- interruptible power to certain loads or other applications such as smoothing PV and ramp rates of generators to make system more efficient 8

Example CHP benefit analysis Location CHP Size (kW) Peak Electric Load (kW) Electric Savings ($2013) Natural Gas Savings ($2013) CHP NG Costs ($2013) O&M Costs ($2013) Net Savings ($2013) Installed System Cost ($2013) Payback (Years) Bldg A $70.6k$33.0k$73.9k$8.0k$21.7k$221.0k11 Bldg B $40.7k$16.7k$30.0k$6.1k$21.3k$81.0k4 Bldg C1520.7$9.9k$5.6k$9.0k$1.5k$5.0k$27.0k6 Bldg D $62.6k$33.0k$75.2k$8.0k$12.4k$224.9k19

Example PV benefit analysis Service Usable PV Output (kW) System Cost Energy Value Payback: (years) Bldg A550$2635k$156.6k10.5 Bldg B360$1724k$102.5k10.5 Bldg C300$1437k$85.4k10.5 Bldg D240$1150k$68.4k10.5 Bldg E210$1006k$59.8k10.5

Cyber security and control costs Cyber security and control costs are all costs associated with providing cyber security and controls to individual buildings or clusters of buildings. This includes: Control infrastructure – Costs to install communications infrastructure necessary for microgrid controls (including monitoring, cyber security and protection) Control Center – Laptops, pagers, etc. with different levels of access to monitor and control microgrids Generator Controls – Local as well as overall supervisory controls involved with synchronization, startup and outputs of generators and isolation devices System Protection – Devices involved in detecting and clearing faults which may occur within microgrids 11

Microgrid Element Costs 12 COST ESTIMATE WORKSHEET Equipment/Approach Equipment and Installation Costs ($K) Construction Overhead (20%) ($K) Design Overhead (12.5%) ( $K) Engineering Overhead (12.5%) ($K) Total Costs ($K) Total Costs with Contingency (25%) ($K) Pin and Sleeve Building rewiring Pin and sleeves Portable Generators Cost 2 x Cost Individual Building Hardening Building rewiring Building Generators Cost 2 x Cost Microgrids Controls Fiber Optic Communications Building rewiring Generators Cost 2 x Cost Trenching and Cable 50/1000 ft 100/1000ft PV Installed Costs 3.50/kW PPA 0.12/kWhr Batteries Installed costs 4.25/kW CHP Installed costs 2.25/kW MA Incentive (0.75/kW) Fuel Storage 2/1000 gal 4/1000 gal

Example system 13

Example system load data 14

Example system with microgrid 15

Cost calculations for example microgrid 16

Another example microgrid kW New Diesel Generation Utility Power Dedicated Microgrid Feeder (Existing Conduit) Other Loads 100 kW Solar PV Array 50 kW Microturbine 200 kW Diesel Generator 600 kWh Battery Storage System Tie to Storage Resources Critical Building Loads Breaker Substation

Cost spreadsheet with engineering, design and contingency costs Equipment Equipment and Installation costs ($K) Constructio n OH (20%) ($K) Design OH (12.5%) ($K) Engineering OH (12.5%) ($K) Total Costs ($K) Total Costs with Contingency (25%) ($K) Microgrid Breaker Underground Feeder Microgrid Controls Misc Equip Total w/o Generation Generation 1600 kW New Generation Total w/generation