1. www.smart-microgrid.ca Project 2.1 Cost-benefits framework – Secondary Benefits and Ancillary Services Dr. Géza Joós Student: Greg Morris McGill University

2. www.smart-microgrid.ca Introduction Project provides a framework for comparing the costs and benefits of Smart Microgrids. Microgrid brings new functionality to a distribution network. – This has many potential benefits... – But it also has costs. Who does the Microgrid benefit and by how much? Need to know this to build business cases and get buy-in from all affected parties.

3. www.smart-microgrid.ca 2011 Direct benefits framework 2012 Quantification methodology 2013 Ancillary svcs. framework 2014 Optimization of benefits 2015 Application of methodology

4. www.smart-microgrid.ca Canmet Energy- NRCan Hydro One BC Hydro

5. www.smart-microgrid.ca Impacts vs. Benefits Impacts – The system changes that result from the Microgrid. – Can range from technical to economic to social or environmental. Benefits – The economic gain that results from impacts. – Much more limited in scope than impacts. Distinction gives clarity and allows a modular approach. – Additional considerations can be easily included.

6. www.smart-microgrid.ca Stakeholders All entities affected by the Microgrid, including: Microgrid Developer or IPP Microgrid Customers (μGCs) Grid Customers outside Microgrid (GCs) Distribution Network Operator (DNO) Utilities or Bulk Energy Suppliers (BESs) Society

7. www.smart-microgrid.ca Traditional View of Benefits Technical – Increased power quality and reliability (PQR) – Reduction in losses – Efficiency improvements Economic – Optimization of resources – Provision of ancillary services Environmental/Social – Emissions reductions – Creation of employment? – Reduced reliance on depleting resources?

8. www.smart-microgrid.ca A Different Perspective μGCs benefit from energy cost reductions and PQR improvements. GCs benefit from PQR improvements. IPPs benefit from sales profits incl. ancillary services. DNOs benefit from reduced O&M, reduced energy costs, and reduced PQR costs. BESs may benefit from reduced O&M. Society benefits from positive externalities, e.g. reduced emissions.

9. www.smart-microgrid.ca Benefit Functions Map from one set to another set like mathematical functions. Map Microgrid impacts onto Stakeholder benefits. E.g. – Reduced Electricity Purchased Cost – Investment Deferral – Reduced Emissions – Ancillary Services Provision – Reliability Improvement

10. www.smart-microgrid.ca Impacts The changes that are expected to result from the Microgrid. Some must be known a priori, called “known impacts”. Some must be calculated or simulated, “discovered impacts”.

11. www.smart-microgrid.ca An Overview of the Framework

12. www.smart-microgrid.ca Ongoing and Future Work Comparison methodology is nearing completion. Ancillary service valuation is in the early stages. Collecting data for case studies. – Ideally based on Canadian Microgrids.

13. www.smart-microgrid.ca Thank you! For further information contact gregory.weyrichmorris@mail.mcgill.ca