Conference on Military Smart and Microgrids October 19-20, 2011 Arlington, VA Steve Bossart , Project Management Cente

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

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”

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 • 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 Industrial Microgrid Campus A Microgrid Community Y Microgrid Commercial Park 1 Microgrid

10. Transformation of Electricity Grid in Denmark

11. Denmark Transformation – 1985 - 2009 Exhibit B-11 Denmark Electric Power Infrastructure 1985 and Exhibit B-12 Denmark Electric Power Infrastructure 2009 • Source: [57, 58]

12. 400 kV 150 kV 60 kV 10-20 kV 0.4 kV 4 (central) 6 (central) 17 (dispersed) 475 (dispersed) 260 (dispersed) CHP units 1488 MW 2014 MW 569 MW 991 MW 83 MW 80 34 2180 1860 Wind units 160 MW 41 MW 1597 MW 576 MW Non-dispatchable (beyond central control) Centrally controlled Generation Capacity, West Denmark, 2008 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

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 *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 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 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.

19. Smart grid 2020 city details

20. Smart Grid 2020 City – Model Summary 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. Exhibit 6-4 Smart Grid 2020 City Characteristics

21. Smart Grid 2020 City Generation Mix 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 50 - 90MW, and a constraint was added for sum of renewables to meet the 20% Renewable Energy Portfolio assumption. • 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 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 • 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.

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.

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

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 GroupSteve Pullins, Joe Miller, Tom Grabowski WorleyParsons Group, Inc. Harvey Goldstein, Paul MylesSextant Technical Services, LLC Chris Wyatt, Steven Knudsen