Many homeowners and businesses turn to self-generated power in an effort to reduce their electricity costs, while becoming energy independent. Electricity prices in New York City are among the highest in the USA, and in 2012 Hurricane Sandy demonstrated the vulnerability of the local power grid, leaving thousands of NYC citizens without power.

Although property owners can deploy diesel generators to become independent from the utility grid, running such equipment 24/7 is very expensive and environmentally harmful, not to mention the logistical challenge of keeping the diesel supply going during emergencies. However, there is an emerging concept that goes beyond simply connecting a backup generator to a building: microgrids.

As implied by their name, microgrids are miniature power networks that can connect and synchronize with the utility grid, but are also capable of stand-alone operation as “islands”. Backup generators continue to play an important role in microgrids, but they are complemented with privately-owned distribution infrastructure and other energy resources such as renewable generation and storage systems.

A microgrid is normally unfeasible for an individual building due to lack of space, but can be deployed for groups of buildings, especially if they are located within the same physical property. This article will provide an overview of the benefits offered by microgrids, as well as some considerations when deploying them in NYC.

A key difference between microgrids and backup power systems is that microgrids are intended to displace the utility grid as the main electricity source, while backup power systems are normally used only when the grid supply is compromised.

Advantages of Microgrids Over Conventional Diesel Generators

Microgrids normally include many generation technologies to combine their advantages and compensate their limitations. For example, a microgrid can use a solar photovoltaic array, a wind turbine and a small-scale gas generator to achieve the following combination of benefits:

• The solar photovoltaic array offers a low cost and low maintenance energy source, while taking advantage of tax credits, and getting a cash rebate from the NY-Sun Incentive Program.
• Wind turbines also offer low cost energy if the site has favorable conditions. In addition, systems with a capacity of up to 2 MW are eligible for an incentive of up to $1 million.
• To compensate for the variable output of solar and wind power, the system can be complemented with a small-scale gas turbine, a diesel generator, or both.

The system configuration described above takes advantage of the local incentives for renewable energy, while reducing the carbon footprint of the facility powered by the microgrid. However, natural gas and diesel can continue to serve as a complementary energy source to improve system reliability.

A microgrid can be further enhanced with energy storage, especially considering the high price of electricity in New York City. Surplus generation from the solar photovoltaic array and wind turbine can be stored locally, further reducing dependence on fossil fuels and the utility grid.

Keep in mind that battery storage is still expensive, but there are many cases where the investment can be justified financially. Consider that the business case for batteries tends to improve when they serve a short-duration demand peak. This provides the added benefit of reducing the total gas and diesel generation capacity required, making both systems less expensive. However, as the operating schedule of battery storage becomes longer, the cost advantage shifts in favor of fossil fuels.

Natural Gas Generators and Small-Scale Turbines in NYC

Natural gas offers two key advantages over diesel. In the first place, its emissions intensity is lower. In addition, natural gas distribution networks are very sturdy, ensuring a reliable supply.

• According to the US Energy Information Administration, natural gas emits 53.07 kg of CO2 per million BTU, while diesel emits 73.16 kg of CO2 per mmBTU, which is almost 38% higher.
• The NYC gas distribution network weathered Hurricane Sandy without major disruptions, while diesel deliveries were very difficult due to flooding. Gas stations were of little benefit because they rely on electricity, and the local grid suffered massive damage.

The main limitation for natural gas generators and turbines in NYC is legal. Emergency and standby power systems are required by NYC construction codes for many types of buildings systems, and natural gas is only allowed as a primary fuel under certain conditions. This means that any microgrid project in NYC will likely have to meet a minimum diesel-based generation capacity to be code compliant.

Managing the Power Grid Interconnection

Even though a microgrid can operate indefinitely as a stand-alone system, there are many reasons to keep a power grid interconnection. For example, consider that the generation systems in a microgrid need eventual maintenance, and the grid interconnection is a convenient backup power supply.

Another advantage of keeping a power grid interconnection is that the microgrid can take advantage of time-of-day electricity rates, reducing its overall operating cost. There may be periods of the day when grid electricity prices drop below the production cost of some internal generation systems, and it makes sense to switch over. The microgrid operator will generally know the kilowatt-hour generation cost for each of the energy resources used internally, and the process can even be automated with an energy management system.

Finally, a grid interconnection allows surplus energy to be fed back to the power grid. There may be cases when all internal consumption has already been meet, and storage systems are at full capacity, so the best way to use surplus energy is exporting it to the utility grid.

Analyzing the Feasibility of Microgrids

Several software packages in the market are capable of optimizing microgrid resources and performing a feasibility analysis, based on local electricity and fossil fuel costs, along with the demand profile of the microgrid user. A well-known software solution is HOMER Pro, which was originally developed by the US Department of Energy.

Multiple microgrids connected to the same utility grid can help improve overall system reliability, since there are many segments capable of operating independently in isolation. During natural disasters, microgrids can help provide electricity to neighboring properties that are dependent on the power network.