Power Generation

DESIGNING MICROGRIDS FOR

EFFICIENCY AND RESILIENCY
Tom Drake For decades, mission-critical facilities have depended on centralized power plants
Senior Sales Manager – Gas Power Systems owned and operated by utilities. However, the traditional model is changing. Intelligent
distributed generation systems, in the form of microgrids, are providing much-needed
Juan Matson stability to an aging power grid.
Senior Sales Manager – Gas Power Systems
A facility’s energy demand is key to the design of a microgrid system. To ensure
efficiency and resiliency, microgrids combine different components to meet a given
demand, while optimizing costs.

Key components
By combining different components, a microgrid can be tailored to every customer
need, providing the ideal technical and economical solution. These systems are
designed to satisfy an electrical and/or thermal energy demand that is traditionally
supported by the natural gas or electric utility provider. A microgrid most commonly
operates in island mode, but it also can be connected to the grid.
 Gas // Fuels

GenSet // CHP
Ligquid // Gaseous Fuels

Energy storage
Wind turbines
E-Chemical // Thermal // Conversion // Mechanical

Control Systems
Intelligence // Optimizer // AI

PV Modules Public Grid

Electricity
Heat
Chemical Load / Demand
Industrial // Commercial // Residential

Distributed energy resources Global demand for new solutions

These include conventional resources, like natural gas or diesel
generators, that convert fuel mechanically to make electricity and The energy world is undergoing a transformation. Various factors are
thermal energy as well as renewable systems, like solar and wind, that driving growth in energy demand, and encouraging the development
utilize natural resources. of flexible, sustainable, cost-effective energy solutions like microgrids.
As a result, microgrid capacity and revenue continues to rise all over
Energy storage the world.
Energy is held in reserve to be dispatched as needed to supplement 25,000 $45,000
other distributed assets. Systems include electrochemical (BESS), ~17% CAGR

$40,000
mechanical (flywheels), thermal (hot water) and energy conversion.
20,000
This energy can come from the overproduction of renewables, or it ~18% CAGR $35,000

can be stored/charged when energy is cheaper for use at times of $30,000

peak cost. 15,000

($ Millions)
$25,000
(MW)

$20,000
Control systems 10,000

Intelligent controls are used to optimize the available assets to $15,000

provide the lowest cost of electricity by automatically dispatching 5,000

$10,000

supply to the most efficient resource. For example, shutting down one $5,000

generator when two are running at the highest load factor to increase
0
fuel efficiency. Control systems can operate with or without dynamic 2019 2020 2021 2022 2023 2024 2025 2025 2025 2025

control (smart grids). North America Europe Asia Pacific Latin America Middle East & Africa

Source: Navigant Research World Markets: 2019 - 2028

A successful microgrid solution provides modularity, scalability,

energy dispatchability, power management and balancing of
resources. Whether off-grid or on-grid, these powerful and reliable
distributed energy generation systems can provide high performance
under any site condition.

02
Benefits of microgrids and energy storage Voltage/frequency control
— Development of control techniques to account for the increase in
By combining renewable power generation, power storage and Power-Electronics-Interfaced DG
conventional power generation to meet energy demands, microgrids
can provide cost savings, reliability and sustainability. Grid code
— Addressing grid compliance issues for the grid connection
Energy cost optimization of microgrids
— Electricity cost reduction
— Fuel and O&M cost reductions Market conditions for distributed generation
— Independence from electricity price development
Economic growth and population growth are increasing the demand
Access to power for power. Increased pressure to decarbonize, and growing demand
— Access to electricity in remote areas for more flexible, sustainable, cost-effective energy solutions are
— Increase of industrial load despite grid limitations guiding governments and industry away from traditional energy
— EV charging in urban areas sources like coal and gas, and toward renewable energies such as
solar and wind power.
Quality and security of supply
— Backup during power outages Four trends are transforming the energy world, triggering demand for
— Voltage and frequency stabilization new solutions:
— Reduction of fuel dependence
Globalization
Positive environmental impact — Increased mobility and energy needs
— Increased energy use from PV & wind: reduced carbon footprint — Higher level of price competition
— Incentives, tax benefits, fines avoidance — Urbanization
— Reputation Decarbonization
— Decentralization
New revenue streams — Energy transition
— Revenues from grid services and energy markets — Increase of fluctuating renewable sources
— Improved marketability of renewable energy — Environmental awareness

Implementation challenges Electrification

— Rising electricity demand
Every microgrid is different. To deliver the right energy mix for a — Increasing power need
facility’s needs, several key parameters must be considered in the — Environmental awareness
design stage. — Sector coupling

Reliable and economical operation Digitalization

— High penetration levels of intermittent generation in stand-alone — New business models
mode of operation — Increased computing performance
— High data volume and energy need for services
Schedule and dispatch of units
— Supply and demand uncertainty and determination of appropriate Costly consequences
levels of reserves
Systems must be in place to ensure power to communities in extreme
Demand Side Management (DSM) conditions. An outdated and overstressed grid has made the network
— Design appropriate DSM schemes to allow customers to react to more susceptible to outages. For example, in July 2019, with only 45
the grid needs and drives supply minutes of notice, Con Edison had to shut down power to New York
City residents when a section of its system reached a maximum
Distribution Level Protection capacity of 12,063 MW. In Northern California, PG&E has been
— Re-engineering of DLP schemes to account for bidirectional proactively shutting down power through rolling blackouts to avoid
power flows the risk of fire during high-risk times of the year.

Market/business models design In 2019, a weather/climate event caused more than $1 billion in
— New models to allow competitive participation of intermittent damages 14 different times. Total costs for that year was $45 billion. In
energy sources driven by fuel savings 2020, wildfires in California and the Pacific Northwest have destroyed
power transmission infrastructures, disrupted public services and
Plug and play development caused massive financial losses. Also in 2020, a storm in Iowa cut
— Market and control mechanisms that exhibit P&P Feature to allow power to more than 400,000 people. Estimated damages due to lost
for seamless integration over time crops are $3.7 billion, along with $82 million in home damages. For
data centers, it costs nearly $9,000 every minute an outage occurs.
And healthcare facilities can average nearly $700,000 per outage.

03
New solutions are needed Public
Examples: military base, healthcare, institutional, education
The increase in non-dispatchable renewable generation in the form of Key benefits: energy cost optimization, quality and service of supply
grid-scale wind and solar has added to the overall instability of the Typical configuration:
grid. Solar power, wind power and other renewable energy sources
offer key benefits, but there are some drawbacks as they are
dependent on weather and time-of-day, can suffer output
fluctuations, and often require major capital investment. A smart
microgrid uses storage and/or complementary generation
technologies to optimize the use of renewables.
Design factors for efficiency and resiliency
Upgrades to the grid are becoming more and more important due to
the overall age of the transmission and distribution network. The U.S. In a true microgrid application, the load or energy demand is key to
Department of Energy (DOE) reports that 70% of power transformers the design of the energy system. Designing to efficiency and
are 25 years of age or older, 60% of circuit breakers are 30 years or resiliency means balancing these assets with the cost of operation,
older, and 70% of transmission lines are 25 years or older. The space available, fuel resources, and government regulations.
average age of the country’s 40,000 miles of transmission lines is 52
years. The need for reliable, independent access to power has never Lifecycle costs for distributed generation system
been greater.
10
Customers, key benefits and configurations Largest Variable
Power Fuel
15
Examples: grid system operators, utilities, independent power
producers Fixed Cost
Key benefits: new revenue streams, energy cost optimization Capital Cost
Typical configuration: 5
Operation and
Maintenance
70 Consumables

Commercial
Examples: offices, retail, warehouses, data centers, infrastructure,
transport, hotels, restaurants A power generation project is a large investment. However, upfront
Key benefits: energy cost optimization, secure and reliable power and other fixed costs are just a small part of the total lifecycle costs.
supply, access to power Fuel accounts for up to 70 percent of lifecycle costs. By utilizing
Typical configuration: renewable energy sources and battery storage, a microgrid can lower
fuel consumption, reducing overall operating costs while ensuring the
availability of reserve power.

Distributed generation systems generally lower operating costs

compared to conventional power generation techniques. Properly
Industry deploying distributed generation systems requires an analysis of the
Examples: agriculture, manufacturing, mining, commodities existing thermal and electrical systems, ensuing the selection of
Key benefits: energy cost optimization, CO2 avoidance building systems that are critical to continuous operation.
Typical configuration:

Communities
Examples: remote communities, urban district/town solutions
Key benefits: energy cost optimization, access to power, CO2
avoidance
Typical configuration:

04
 Conventional Generation Combined heat and Power (CHP)
Emissions
6.2 kTons/yr
Power Station Fuel
(U.S. Fossil Fuel Mix) 8,000
Electricity Electricity
MWh
Combined heat CHP Fuel
and Power (CHP) (Gas)
1 MW Natural Gas
1,563 Reciptocating Engine
Heat Heat
Boiler Fuel MMBtu
(Gas)
Emissions Emissions
2.1 kTons/yr 4.2 kTons/yr
51% Efficient 80% Efficient

Secondary fuel costs Gas (CHP)

Many microgrids use a combined heat and power (CHP) module, Strength: Opportunity to use biogas
which can produce both electric energy and heat energy from the Weaknesses: Gas pipeline or storage required, emissions controls
same fuel, thereby nearly doubling overall efficiency. Higher required in certain areas
operating efficiencies enable CHP systems to consume less fuel while
generating the same amount of power and useful thermal energy Diesel
as separate heat and power systems. Compared to conventional Weaknesses: Fuel transport/storage, high CO2 emissions, high NOx
electricity and heat generation, CHP modules reduce carbon emissions, limited run hours
emissions by approximately 50 percent.
Energy storage
The challenge in maximizing the efficiency of a cogeneration Strength: Enables integration of renewables, increase flexibility
application is matching the demand for the heat byproduct with of genset
the demand for electricity. If demand for electricity is greater than
demand for the heat product, then excess heat must be exhausted to Grid connection and permitting
a radiator or water-cooling tower, thus efficiency suffers. If demand Each individual utility creates a set of rules that govern the process
for heat exceeds generator output (light electrical demand or high and costs of operating in parallel with its transmission and distribution
heat demand), then it will need to be scaled back to match the heat system. Even when electricity is kept behind the meter, the costs
output of the generator or the process, augmented with heat from a and time needed to properly operate in grid parallel add additional
boiler. unforeseen costs to projects. Exporting excess energy is even more
costly and difficult. Analysis must be performed on how any
The perfect balance distributed energy system will affect a relationship with the utility
provider.
When designing a microgrid system for any application, it is important
to choose the right combination of components to balance resiliency Wind
with efficiency. Strengths: No carbon emissions, federal and local incentives
Weaknesses: Not dispatchable, visual and noise pollution, capital cost
Fuel availability and emissions regulations
With a widespread distribution network, natural gas is often used for Solar
North American microgrid systems. In Latin America, where pipeline Strengths: No carbon emissions, federal and local incentives
natural gas might not be available, other options are often Weakness: Large space required (greenfield sites)
considered. Emissions rules can limit fuel types. For example, diesel
may only be used in some areas for standby and with a limited run Gas (CHP)
time of 100 hours or less annually. Strengths: Opportunity to use biogas, dispatchable

Wind Diesel
Strength: No fuel requirement Strength: Dispatchable
Weaknesses: High CO2 emissions, high NOx emissions, limited
Solar run hours
Strength: No fuel requirement
Energy storage
Strength: Federal and local incentives

05
Ambient conditions and plant operations Solutions
Facility load or demand will drive the size and shape of the microgrid. — 3 x 16V4000 natural gas generators (6MW)
It is important to analyze each site individually even if the loads and — 3 x 2MW/2MWh – 6MWh mtu Energy Pack
designs are similar, as location affects local regulations. In addition, — 18.7 MW of PV
ambient conditions, such as high altitude and high temperature, will — Projected $1 million annual savings
affect how the distributed energy resources will perform. Local codes
and standards are one of the main early drivers for the design of a Example #2:
microgrid. Granjas Carroll de Mexico – Puebla, Mexico

Wind
Weakness: Dependent on weather conditions

Solar
Strengths: Retrofittable, e.g. on buildings
Weakness: Dependent on weather conditions and time of day

Gas (CHP)
Strengths: Power heat and cooling, efficient, economic continuous
operation

Diesel
Strength: Fast start time (<20 seconds)
Weaknesses: High operating and maintenance costs

Energy storage
Strengths: Flexible use for various applications, low operation
and maintenance cost
Weakness: Battery capacity degrades over time Site details
— New pork processing facility for one of the
Applications leading producers in Mexico
— Continuous power project
Example #1:
Industrial Facility – Southeast USA Challenges
— Complete independent off-grid solution
— Customized automation system for plant control
and remote operation
— Accommodate extension for heat recovery and
use of biogas in future

Solutions
— 4 x 20V4000 natural gas generators
— 1 x 16V4000 diesel generator
— 9.7 MWel power output
— The first off-grid solution of its kind for
Rolls-Royce Power Systems in the Americas

Site details
— Industrial demand response project
— Industrial process with high peak electrical loads

Challenges
— Control peak demand to reach goal of $100,000 monthly reduction
in energy bill
— Microgrid controller to optimize all distributed generation assets

06
Microgrid Validation Center Conclusion
Every microgrid is unique. Modeling real-world applications can Power security for mission critical facilities has traditionally been
ensure a microgrid and its control system is designed optimally. mtu limited to a coal-fired central power plant that supplies electricity
Microgrid Validation Centers offer highly flexible simulation and through a transmission and distribution system with on-site standby
testing capability. Equipped with diesel and co-generation standby generators for selected loads, but trends are changing.
generator sets, solar panels, mtu EnergyPack battery storage and
integrated mtu automation system, the self-sustaining Validation End users are paying more attention to how they design and purchase
Centers can simulate a wide range of conditions, including off-grid their power systems. Intelligent distributed generation systems in
operation. Located in Aiken, South Carolina and Friedrichshafen, the forms of microgrids increase security and efficiency by offering
Germany, they are effective proving grounds for customers to apply a wide selection of power generation and storage sources, providing
a software model to just about any real-world installation. maximum control for facility managers, and reducing reliance on
utilities.

Rolls-Royce provides world-class power solutions and complete comprehensive, powerful and reliable systems, based on both gas and
lifecycle support under our product and solution brand mtu. Through diesel engines, as well as electrified hybrid systems. These clean and
digitalization and electrification, we strive to develop drive and power technologically advanced solutions serve our customers in the marine
generation solutions that are even cleaner and smarter and thus and infrastructure sectors worldwide.
provide answers to the challenges posed by the rapidly growing
societal demands for energy and mobility. We deliver and service

Rolls-Royce Group
www.mtu-solutions.com