1. Integration of Coal Power
in a Smart Microgrid
Conference on Military Smart and Microgrids
October 19-20, 2011
Arlington, VA
Steve Bossart, Project Management Center

2. Topics Microgrid concepts
Transformation of electricity grid in Denmark
Smart Grid City 2020
Distributed coal power plants
Integrated with smart grid, e-storage, & renewables
Technical and economic performance
DOE RDSI projects

3. Microgrid Concepts

4. What is a Microgrid?
“A Microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island mode.”
Microgrid Exchange Group, October 2010
“Microgrids are modern, small-scale versions of the centralized electricity system. They achieve specific local goals, such as reliability, carbon emission reduction, diversification of energy sources, and cost reduction, established by the community being served.”
The Galvin Electricity Initiative
NLP = neural linguistic programming

5. Various Microgrid Configurations Possible
Consumer Microgrid—single consumer with demand resources on consumer side of the point of delivery, (e.g. sports stadium)
Community Microgrid— multiple consumers with demand resources on consumer side of the point of delivery, local objectives, consumer owned, (e.g., campus, etc.)
Utility Microgrid—supply resources on utility side with consumer interactions, utility objectives
Microgrids are “Local Energy Networks”

6. Some Potential Applications
Sports Stadiums
Municipalities
Commercial Parks
Industrial Complexes
University Campuses
Military Facilities
Utilities
“Communities”
More on this later

7. Why Microgrids?
“…the current system has become incapable of meeting the growing needs of twenty-first century consumers. One solution to this problem is to expand the role of smart microgrids that interact with the bulk power grid but can also operate independently of it in case of an outage or other disturbance.” The Galvin Electricity Initiative
“These [projects] will help to increase reliability in our electric grid by defraying both the cost and effort associated with upgrading distribution lines or adding new generation capacity to meet peak electrical load, furthering our ongoing efforts to increase national economic and energy security.” DOE Assistant Secretary Kevin Kolevar, April 2008, regarding the microgrid project winners
“While still mainly an experiment, microgrids could grow to be a significant, if still small, portion of the smart grid market. That's according to Pike Research, which projects that microgrids will grow to a $2.1 billion market by 2015, with $7.8 billion invested over that time.” Jeff St. John, GreenTech Media, October 2009

8. Microgrid Markets Municipalities University campuses
1327 in the US, 961 under 300,000 residents
University campuses
8,520 in the US
Military facilities (25% renewables goal)
440 facilities worldwide
Industrial and commercial parks
~15,000 in the US with a capital size of $10M to $100M
Utilities with special needs
Over 900 rural electric cooperatives, over 1200 municipal utilities, ~250 investor-owned utilities, and many public power utilities
Other campuses (hospital, state agencies, etc) - Not quantified to date

9. A Possible Future Distribution Architecture
Community X Microgrid
Distribution Control
Community Z Microgrid
Community Y Microgrid
Industrial
Microgrid
Campus A Microgrid
Commercial Park 1
Microgrid

10. Transformation of Electricity Grid in Denmark

11. Denmark Transformation – 1985 - 2009
Example of how Denmark moved from mainly centralized generation in 1985 to mostly distributed generation by 2009
Exhibit B-11 Denmark Electric Power Infrastructure 1985 and Exhibit B-12 Denmark Electric Power Infrastructure 2009
Source: [57, 58]

12. Generation Capacity, West Denmark, 2008
CHP units
Wind units
400 kV
150 kV
60 kV
10-20 kV
0.4 kV 4
(central) 6 17
(dispersed)
475
260
1488 MW
2014 MW
569 MW
991 MW
83 MW 80 34
2180
1860
160 MW
41 MW
1597 MW
576 MW
Centrally controlled
Non-dispatchable (beyond central control)
According to Danish Energy Agency, only about 2% of the energy delivered to Denmark consumers is from the central station CHP. That means that it is used primarily as an export.
Heat for district heating is used within Denmark from both central and distributed units.
In the 80’s, Denmark was an importer of electricity – over the last several years, Denmark has been an exporter of electricity
Exhibit B-14 Generation Capacity per Voltage Level, West Denmark 2008
Source: [51]

13. Smart Grid City 2020

14. Focus of Analysis for Smart Grid City 2020
How much the baseload might change as Smart Grid technologies are adopted
Ways that coal might service this changing baseload, including centralized generation, distributed generation (DG) in a microgrid, and combined heat and power (CHP)
Coal’s potential to provide ancillary services and reserves in a Smart Grid, including supporting higher renewable generation capacity
Different perspectives of coal in a Smart Grid future
Baseload
Changes to daily and seasonal load profiles;
Changes to amount of baseload
Changes to percentage of total load that is baseload (e.g., reducing peak load, flattening load profile)
Coal’s role in serving baseload
-Centralized generation
-Distributed generation
-Distributed generation with CHP
Coal’s role in serving FERC ancillary services and supporting variable renewable generation
-reserves (spinning and supplemental)
-stability (frequency regulation, voltage control
-load following (ramping capability w/ and w/o supplemental e-storage)
-replace real power loss

15. Utility Study Recommendations*
Baseload changes and their impacts on centralized generation
Coal in distributed generation (DG) applications
Coal in combined heat and power (CHP) applications
Coal’s role in integrating renewables
Several utilities, coops, ISO provided their perspectives on coal-smart grid interplay studies of interest to them (FE, HECO, TVA, GRE, MISO)
Changes to baseload and impact on central generation
Potential for coal in DG applications serving baseload and/or ancillary services
Potential for CHP
Role in integrating variable renewables onto grid
*FirstEnergy, HECO, TVA, Great River Energy, Midwest ISO

16. How Cities are Supplied Today
To support consumption of 1 MW:
Requires central-station production of ~1.2 MW (line losses, transformation losses, congestion losses)
Requires central-station installation of ~2.2 MW (average fleet capacity factor ~45%)
Requires distributed production of ~1 MW
Requires distributed installation of ~1.3 MW
Chart shows the mix of generation capacity in and the utilization of available capacity
Black shows % of generated electricity from each resource; coal is 48%
Blue shows percent of utilization of available capacity for each generation resource; coal is 72%
Overall utilization of available capacity is 45%;
To consume 1 MW of electricity requires
1.2 MW of central station production and 2.2 central station installation or
1 MW of distributed production and 1.3 MW of installed distributed generation
Note: 21.4 percent of NG is shared between NG base and NG Peak

17. City Sizes – 2000 Census
Area of Interest – hundreds of small to medium size cities where the transformation to a Smart Grid may lead to a small clean coal fit.
Number of Municipalities
Probably need to review this distribution once the 2010 Census city data is available.
Interesting – what about the right side (largest cities – IOU), what about the far left (smallest)?
Reviewed 2000 census data; hundreds of medium size cities (50,000 to 200,000) where a distributed coal plant may fit
Population [in thousands]

18. Smart Grid 2020 City Summary
Renewables and consumers are driving a distribution network focus in the transformation of the electric system.
The prime location for grid change is the city urban/suburban area.
Of the US municipalities there are hundreds of small to medium sized US cities.
Based on local initiatives, economic development, and reliability needs, the mid-size cities are expected to lead the transformation of the electric system to a Smart Grid.
If clean coal is to play a role in the Smart Grid, it will likely start in these cities, where only a few of the many industrial consumers are needed within the city to create combined heat and power (CHP) applications in industrial parks at the city’s edge.
Trying to show that change is coming and it will be lead by cities with a urban/suburban nature.
We used the 2000 census for cities and extrapolated to 2010 based on some growth rates from the US Census Bureau.
Key point: small clean coal plants are much better at supporting CHP and other poly-plant applications than large central-station generators miles from the city.
Key point: the Smart Grid 2020 City will offer many candidates for CHP / poly-plant applications where the small clean coal plant would be viewed favorably compared to natural gas for its lower, flat fuel cost and higher capacity factor.

19. Smart grid 2020 city details

20. Smart Grid 2020 City – Model Summary
Characteristic
Value
Population
130,000
Residences
50,000
Commercial
7,050
Industrial
311
Avg. Load (MW)
162
Peak Load (MW)
194
Annual Load (MWh)
1,460,047
Planned renewable energy req’mt
20%
Pre-existing PV (MW)
1.9
Pre-existing DR (MW)
7.8
RTO/ISO territory?
Yes
C&I demand charges?
All of the electricity data in EIA is based on metered accounts, not person population. This requires the use of meter data for computing averages and projections.
For example, EIA has the total number of US residential, commercial, and industrial meters, thus we can ratio commercial and industrial meter counts based on choosing the number of residential meters.
EIA data also gives us the average load per meter in residential, commercial, and industrial, thus we can calculate the total average load for the “typical” city.
PV is 1 % of peak load
DR is 4% of peak load
Peak is 20% above average
C&I demand charges – commercial and industrial demand charges; C&I customers pay to have capacity available to meet peak demand; pay a percentage of peak load; average is $12.40/kw/mo..
Exhibit 6-4 Smart Grid 2020 City Characteristics

21. Smart Grid 2020 City Generation Mix
Resources
Capacity (MW)
Energy Delivered
Clean coal DG baseload
62.4
29.9%
PV (city-level and consumer)
35.7
4.9%
Wind (city-level and consumer)
50.2
15.1%
Energy storage (city- level and consumer)
19.6
2.1%
Consumer DG (baseload and peak)
41.9
2.9%
Consumer fuel cell
0.0
0.0%
RTO/ISO wholesale market
45.0%
Total
210
100%
A proprietary Internal Rate of Return (IRR) optimization algorithm is run combining installed cost, operating hours/year, renewables energy delivery, energy storage required, and percentage of base generation needed.
Constraint were added for some components of the mix.
E.G., a constraint was added for clean coal DG baseload to be between MW, and a constraint was added for sum of renewables to meet the 20% Renewable Energy Portfolio assumption.
Scenario is municipality procures construction and operation services for merchant of power plants; goal is to provide profit for municipality in selling electricity to customers; savings and improved reliability for customers; and rate-ofreturn for power plant merchant through power purchase agreement (PPA) with municipality
Important comparison is to show how the large capacity in PV and Wind delivers a relatively smaller energy amount…~41% of capacity to provide 20% of the energy. But, the PV and Wind have zero fuel cost for 25 years.
It is important to show that we can effectively engage consumer DG for part of the baseload as well as most of the peak load.
It is important to note that 45% of the energy delivered is still from the wholesale market, but we have sufficient city resources to hedge this wholesale market to buy at lower cost periods of the day.
Show economics in a few slides
From Exhibit 6-5 New Resources for the Smart Grid 2020 City and Exhibit 6-6 Delivered Electricity Mix

22. Small Clean Coal (IGCC) is Doable
Plant Installed Capital Cost ($/kWe) vs Size
$3,500/kW for a small IGCC with a Recip or Hybrid back end today.
Projecting to 2017 for start of construction, the cost will be ~$4,182/kW
Use 62 MW IGCC with reciprocating engine in a CHP application for Smart Grid City 2020
SNG is fuel for reciprocating engine
Hybrid is mix of combustion gas turbine and reciprocating engine
Cost of $3,500/kW is scaled to 2017 to $4,182/kW
The Smart Grid 2020 City model uses the IGCC – Recip plant in a CHP application without CCS.
Exhibit A-11 Plant Cost of Electricity vs. Size

23. Smart Grid 2020 City Summary
Financial Factors
Value
Total Cost ($M)
$873.1
Federal ITC ($M)
$121.5
Net Cost ($M)
$751.5
City Investment ($M)
$140.0
Financed Debt ($M)
$611.5
Bond Interest Rate
6.0%
Term
25 years
BAU Residential Rate ($/kWh)
$0.1330
SG Residential Rate ($/kWh)
$0.1200
Consumer Savings over Term ($M)
$385
Annual City Utility Profit ($M)
$27.8
NPV ($M) based on net cash flow
$77
IRR
18%
The consumers save $15.4M annually on their electric bills.
The emissions footprint is reduced by 198,189 tons/year.
The electric rate is nearly flat for 25 years (0.1% escalation/yr).
The small clean coal plant is an essential energy and stability resource as well as supporting CHP and renewables penetration.
With >300 potential industrial firms to partner with, finding 1 or 2 small clean coal CHP candidates is doable.
The total capital cost is a large number, but not as high as the BAU case which is demonstrated by the lower electricity rate of the SG over the BAU case, plus the high IRR and short payback period. Both power plant merchant ($751M) and city ($140M) have payback periods.
The Power Purchase Agreement merchant profit will be $695M over the 25 years ($27.8M/yr * 25 yrs).
The nearly flat rate for 25 years is largely driven by the nearly flat coal costs and zero solar & wind costs over the term.
The emissions footprint reduction is a combination of NOx, SOx, and CO2, but by far the majority of the 198,189 tons/yr is CO2.
Reliability improves by 10X; 120 min down to 12 min for SAIDI; 1.2 down to 0.5 for SAIFI

24. Industry Implications
The Smart Grid offers a reason to have small clean coal plants in poly-plant applications.
Small clean coal plants are much better at supporting CHP and other poly-plant applications than large central- station generators miles from the city.
The Smart Grid 2020 City will offer many candidates for CHP / poly-plant applications where the small clean coal plant would be viewed favorably compared to natural gas for its lower, flat fuel cost and higher capacity factor.
Trying to show that change is coming and it will be lead by cities with a urban/suburban nature.
Small coal plants better at serving CHP for district heating and process steam/water; other products include chemicals, chemical feedstock, transportation fuels,

25. Leverage Smart Grid City 2020 Analysis
How does Smart Grid enable:
Improved baseload generation operation
Applications of distributed clean coal generation
Clean coal – CHP applications
Clean coal – renewables partnership
Valuation of true cost of electricity
Need non-proprietary economic optimization model for electric power systems including central and DG, e-storage, T&D, and consumers
In Smart Grid future, we need to determine the delivered cost of electricity based on generation mix supplying electricity in real-time, not the generated cost

26. Renewable and Distribution System Integration

29. Report www.netl.doe.gov/energy-analyses/
NETL Contact:
Joel Theis, Economist, NETL/IEPS
Prepared by:
Energy Sector Planning and Analysis (ESPA)
Booz Allen Hamilton, Inc.
Jovan Ilic, Shawn Rabiei, Marija Prica,
David Wilson, Jesse Goellner
Horizon Energy Group Steve Pullins, Joe Miller, Tom Grabowski
WorleyParsons Group, Inc.
Harvey Goldstein, Paul Myles Sextant Technical Services, LLC
Chris Wyatt, Steven Knudsen