Microgrid Effects and Opportunities for Utilities
Microgrid Effects and Opportunities for Utilities
Microgrid Effects and Opportunities for Utilities

Military installations, hospitals and campuses are increasingly turning to microgrids as an option for managing power supplies and reliability. Microgrids offer greater energy security and provide economic benefits to both the end user and the local utility provider.

Many large utility customers, including military installations, hospital campuses and universities, are considering microgrids to better manage energy usage and enhance power quality and system reliability. In addition to greater energy security, microgrids offer a variety of economic benefits ranging from greater efficiency of operation to the ability to facilitate participation in demand response and interruptible rate programs provided by the local utility. There are many scenarios and environments where a utility can benefit from a customer's implementation of a microgrid.


While the use of distributed generation, backup power for critical loads, and the ability to self-generate power in an island disconnected from the grid is not new, the term "microgrid" is gaining popularity and is a focus of government and commercial power users. While microgrids can take many forms, the U.S. Department of Energy (DOE) defines a microgrid as the integration and control of multiple local generation and storage assets (diesel generators, combustion turbines, PV arrays, battery systems, etc.) to provide on-site generation for local loads in both grid-tied and islanded modes of operation.

Drivers for Microgrids

By allowing multiple generation assets to provide power for a common load, microgrids greatly increase both the reliability of power and efficiency of generation. Typically, the greatest beneficiaries of microgrids are customers with large, mission-critical facilities or large power consumers in areas prone to frequent and/or prolonged outages (e.g., hurricane zones). Although facilities like these have used on-site generation in the past, they are starting to migrate toward microgrids because of the many examples of single generators failing during prolonged outages and leaving the entire mission in jeopardy. In addition, customers in areas experiencing greater stress on the transmission and distribution system (e.g., Northeast United States) are beginning to reconsider the scale of their on-site power needs and installing microgrids to alleviate concerns of events like the Northeast Blackout of 2003.

The U.S. Department of Defense (DOD) identified reliability on the commercial electrical grid as a significant vulnerability to its mission, particularly in light of growing threats of cyberattacks on critical infrastructure (refer to the Defense Science Board Task Force on DOD Energy Strategy report, "More Fight — Less Fuel," February 2008). This concern was reiterated in an October 2012 speech by Leon Panetta, then secretary of defense. Cyberthreats such as Aurora and Stuxnet are real-life examples of threats to power control and utility systems.

Benefits for End-Use Customers

Obviously, customers with a microgrid designed to completely carry their normal day-to-day loads can easily participate in a demand response program by switching to an island mode of operation when market conditions are favorable. Although not explicitly a requirement of microgrids, it is not uncommon for those with this capability to be provided with the ability to seamlessly transition to and from the local utility. This actually provides both the customer and the utility with a much more desirable alternative - parallel operation of the distributed resources.

By operating in parallel, the customer can remove not only its entire load from the utility grid, but it can also provide the full capacity of the distributed generation assets to the utility. Thus, a customer with 2MW of generation serving a peak load of 1.3MW can actually reduce the utility's load by 2MW. This benefit is further enhanced if the customer also has renewable resources available. In addition, operating in parallel allows the customer to simultaneously participate in other ancillary services such as providing voltage and reactive power to the utility. This does, however, require the utility to approach microgrids in a more progressive way than they have typically done in the past and allow customers to export power in these situations. If this is done, the combination of utility incentives along with the greater energy security is often sufficient grounds for an end user to install the necessary equipment for a microgrid.

Microgrid for Shands Cancer Hospital

As an example, Burns & McDonnell designed and constructed a microgrid for the campus serving the Shands Cancer Hospital at the University of Florida (see Image 1). This project was a partnership between the hospital and Gainesville Regional Utilities (GRU), the local utility company. GRU built, operates and maintains an on-campus energy center that provides all utilities (i.e., chilled water, steam, normal and emergency power, and medical gases) to the campus. To provide these utilities reliably and efficiently, the energy center uses a microgrid that can supply the entire campus' power demands and includes both a combustion turbine generator and a diesel generator. For maximum efficiency, the turbine generator is part of a combined heat and power (CHP) solution that captures waste heat to generate the steam required by the hospital. Since the thermal load can result in an operating condition where the turbine is producing more electricity than is needed by the campus, GRU routinely exports power from this system to its grid for consumption by other customers. In a traditional utility agreement, the hospital would have needed to instead use packaged boilers for the excess steam load to prevent exporting power, which would have reduced the overall efficiency of the system.

Although a CHP can be implemented without a microgrid, Shands officials recognized that the community expects hospitals to be fully operational at all times. This perception is even more critical for Shands, which has a Level 1 trauma center. With this in mind, the campus was built as a fully rated microgrid so the turbine generator could supply all of the power to the campus even with the loss of both redundant utility feeds. Since a CHP already required operation in parallel with the utility, a seamless transition to/from island operation was an obvious feature to include with this system. Thus, when a significant storm or hurricane is headed toward the hospital, GRU islands the campus without affecting the end customers in any way. This greatly reduces the likelihood of a power outage during the storm since all of the campus distribution is underground and there are no outside influences on the system (e.g., a lightning strike on an adjacent feeder). Once the storm has passed and the system is stable, it is seamlessly reconnected to the utility grid. Any outages in the regionwide utility system are, thus, fully mitigated for the hospital.

One other benefit of this particular microgrid is the ability to load test the emergency generator without either interruption of power to the users or use of a load bank. Typically, hospitals perform their generator load tests by connecting resistive load banks to the generators, turning the generator's output directly into heat without doing any useful work. At the Shands Energy Center, the emergency generator is allowed to run parallel to the utility grid so it can be fully loaded by doing useful work. It's a better test of the generator and is more financially and environmentally efficient.

Protection for the Power Grid

The DOD is considering microgrids as part of a mitigation strategy to protect critical missions from vulnerabilities to cyberattacks or other adversarial attacks on the nation's power grid. A great deal of the logistics for U.S. troops in other countries is based within the continental United States. Thus, electrical power within the bases on U.S. soil is a critical resource for the military's war-fighting capability.

The DOD and DOE have developed a three-phase technology demonstration known as Smart Power Infrastructure Demonstration for Energy Reliability and Security (SPIDERS). Under the SPIDERS program, the DOD is demonstrating and testing the effectiveness of using multiple diesel generators in conjunction with photovoltaic (PV) arrays and other energy storage media to operate a stable, medium-voltage microgrid upon prolonged loss of utility power. The goals of the program are to increase reliability of backup power systems as well as reduce fuel consumption. One key feature of this program is that it uses existing assets whenever possible. Thus, it is not a "clean sheet" approach to creating microgrids, but one that mimics what the DOD and private industry could do as a lowest-cost approach.

Phase I of SPIDERS supports mission-critical loads at Joint Base Pearl Harbor Hickam (JBPHH) in Hawaii. Military facilities in Hawaii have experienced multiday losses of utility power due to tropical storms, and do not have the luxury of importing power from nearby states. Burns & McDonnell designed, constructed and tested the SPIDERS Phase I microgrid and documented significant enhancements in reliability and security. Prior to SPIDERS, critical loads were individually served by isolated generators that were oversized for the normal load, and thus ran inefficiently. Also, renewable energy assets such as PV arrays were of no value upon loss of utility power. When connected to the microgrid, generators are decoupled from their individual loads, allowing a single generator to serve multiple loads and allowing the PV to support the loads. Under operation of the SPIDERS microgrid, critical loads were served continuously during a three-day simulated power outage, and testing indicated the system served the loads using 30% less diesel fuel by operating fewer generators at more efficient points and by integrating renewables into the power island (see Figure 1).

Benefits for Utilities

Communities have come to rely upon electric utilities to support critical functions such as military installations and hospitals. Severe weather events highlight the potentially devastating impacts of prolonged power outages. Recently, during Hurricane Sandy, a major New York hospital had to evacuate 300 patients after both the utility's power supply and backup generators failed. Utilities often bear the brunt of negative public perception and increased regulatory pressure after such incidents, whether justified or not. Both utilities and their customers supporting critical operations benefit from the increased reliability that microgrids provide, particularly in times of disaster.

As existing distribution systems are stressed by aging infrastructure and demand growth and as a utility's ability to execute capital projects for new generation, transmission and distribution are hampered by regulatory and environmental roadblocks, the additional flexibility in system operations provided by on-site generation and microgrids become more attractive (see Figure 1). In addition to reducing demand on the electrical grid, microgrids can also help utility operation through the addition of reactive power generation and other frequency and voltage regulation improvements to load balancing and power quality. As smart grid distribution automation continues to evolve for the utilities, new technologies will be available to better monitor and control the distribution grid to use these benefits.


Utilities should consider development and operation of microgrids for large utility customers as part of their growth strategies. Increasing incidents of serious storms causing long-term power outages in densely populated areas and new threats such as cyberattacks are highlighting vulnerabilities to critical missions. The growing availability of financial incentives, including demand-response and grid services, make on-site power generation more viable. There are many scenarios and regions of the country in which both utilities and customers can benefit from properly implemented and operated microgrids through improved power reliability and more efficient energy generation and consumption. As implementation of smart grid technologies increases in utility distribution networks, there will be even more potential for utilities and customers to optimize distributed energy resources.

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