Download Facilitating Microscale Distributed Generation in New Zealand

Facilitating Microscale Distributed
Generation in New Zealand
Alister Gardiner
Prepared for: NERI Energy Conference, Massey Date:July 07
Overview
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Drivers for change
The role of Government
Definitions - DG and microgrids
Network design issues – technical, market
Current status – a level playing field?
Facilitation framework – technical, market design
What I would like to see happen here
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Drivers For Change
 Delivery of energy services faces new challenges:
 Consequences of environmental damage
 Energy security
 Contributing factors
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Continued growth in demand
Dwindling traditional energy resources
Political instability
Competition for resource use
Wellbeing and economic competitiveness
Environmental awareness and sustainability
The digital age requires higher quality and security
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Drivers For Change
 The requirements translate to a need for:
 Higher StU efficiency (not just demand side)
 Lower overall carbon emissions
 Existing infrastructures have served well but will need to be
adapted for the future:
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Market liberalisation and customer choice
Changing commercial frameworks and removal of barriers
Technological advances and disruptive technologies
End of life replacement and upgrade costs
New resources and localities
Distributed generation can contribute to these goals
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Government Role
 Electrical energy objective:
 to ensure that electricity is produced and delivered to all classes of
consumer in an efficient, fair, reliable, and environmentally sustainable
manner and to promote and facilitate the efficient use of energy
 Distributed generation objective (GPS)
 To facilitate the use of distributed generation by ensuring that it does not
face undue barriers in connecting to lines
The government is responsible for a sector framework that
delivers these objectives
 “Electricity” or “electricity services”?
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Distributed Generation
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MicroGeneration
General customers can generate from “behind the meter”
 Intermittent renewable energy
 Firm Combined Heat and Power (CHP)
 ><10kW?
Reduced losses
Surplus
electricity for
other network
customers
M
Conversion
device
Distributed Resources including
wind, solar, battery storage, fuels
Potentially a substantial increase in system complexity
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MicroGeneration
 Through weight of numbers MicroDG could deliver a network
transformation
BAU
LARGE
100MW
OPPORTUNITY
INITIATED
Capacity
of Site
SUPPLY-SIDE DRIVEN
BY BUSINESS
ENERGY RETAIL
GENERATION
MEDIUM
TRANSMISSION
10MW
DISTRIBUTION
SMALL
• Large scale DG is
supply side / business
driven
• Small scale DG will
be demand side
driven, but will be
influenced by supply
side strategies
INDUSTRIAL
1MW
COMMERCIAL
MINI
100kW
Number of
Sites
COMMUNITIES
DOMESTIC
MICRO
DEMAND-SIDE DRIVEN
BY CUSTOMERS
NEW TECHNOLOGY
INITIATED
• A market framework
that recognises the
value of the full value
of agregated microDG
is desirable
Network
Transformational
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MicroGrids
“Smart Grids” is a new concept for electricity networks,
needed to meet the challenges of the 21st century and fulfil
the expectations of society
(European Commission Directorate General for Research
http://www.eurosfaire.prd.fr/7pc/doc/1144859476_smartgrids_en_etp_2006
.pdf)
MicroEnergy technologies and the MicroGrid are key
components of the Smart Grid concept
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MicroGrids
What is a microgrid?
A power network that operates at the community level,
including the integration of small electricity sources,
energy storage, and controllable loads.
 Includes a wide range of sources including PV, wind, fuel
cells, etc. and loads operating as a single aggregated
generator or load
 Can operate as a net source of power, or as ancillary
services supporting the network.
 Unique feature – generally connected to the greater
distribution network, but can automatically transfer to
islanded mode, and also resynchronise as required
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MicroGrids
 “Behind the meter” customer-generators
 Each can import shortfall and export surplus (to next door?)
 A disruptive technology?
 New regulatory framework? – central supply no longer dominates
 Autonomous, self healing systems?
Centralised
Generation
Transmission
Conventional Distribution
Distribution
1-way
power
flow
M
M
M
~
~
Example of a Microgrid
connected to the existing
Distribution System
Other
network
feeders
M
2-way
power
flow
~
fuel based
CHP
M
M
~
Micro-generation
PV, wind,
hydro
Community Microgrid
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MicroGrids
 The value of the network - ADMD capacity reduction
# of Houses
1
5
20
100
Ratio of MD
1
0.62
0.34
0.24
 If individual house peaks are 16kW
 The 100 house+ community per house peak is ~ 4kW
 The network provides substantial value by reducing the supply
capacity requirement
 Who should pay for the cost of the network?
 The consumer - not the generator
 A customer-generator who makes a reduced demand on
network capacity should be rewarded with lower network costs
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MicroGrid Options
Intermittent local generation - Network dependent
Network provides
power balancing and
ancillary services
(voltage, frequency,
etc.)
Microgrid environment
Aggregated
passive
generation
Firm local generation - Network independent: capable of
islanded operation
Microgrid can provide
power balancing and
ancillary services
(voltage, frequency,
etc.)
Microgrid environment
Aggregated
smart
generation
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Public Good Outcomes
 Big improvement in supply efficiency
 Line losses reduced
 From <40% central generation to >80% CHP
 Reduction in GHG emissions
 Many local energy resources are renewable Much less
fuel is used
 Thermal resources conserved
 the rate of usage could be halved
 Increased network resilience
 Higher reliability and power quality are possible
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Network Design Issues
 Central generation
 Energy
 Firm Capacity and power quality
 Delivery
 High T&D infrastructure costs
 One way power flow
 Large scale wholesale market
 Distributed generation
 Energy
 Capacity???
 Delivery
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Low infrastructure costs
Low losses
2 way power flow
Small scale wholesale market???
 Customer-generator
 General customer pays for
metered energy and an
estimated share of various
ancillary services (firm capacity,
power quality, reliability, etc.)
 If also a generator, should be
rewarded for both types of
services supplied to the network
 Offers a new paradigm in demand
response/participation
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Integration of community distributed energy solutions (IDES)
Network Design Issues
 Two areas to be addressed in
a regulatory framework
 Technical design
 Market design
 Network integration can be
enhanced by clear signals to
device developers that
 Encourage desirable network
characteristics
 Encourage public good benefits
 Technical
 Most generic issues are
understood for low
penetration levels
 Inverter systems offer a
trouble free standardised
interface
 System changes needed for
high penetration levels
 Market
 Dominated by centralised
wholesale market thinking
 New approach needed
 Transformational - must be
government led
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Leading to a more sustainable energy system
Current DG Status
 Technical
 2003 MED discussion paper proposed <10kW/40,000kWh category
 Sep 2006 draft regulations released for comment
 Jul 2007 - still no specific regulations for microgeneration
 Market
 EC - Proposed model contract, no minimum price
 Barriers?
 4 sets of “consents” potentially required
 Lines company – technical
 Retailer – purchase agreement
 Regional council – resource consent
 City/County Council – building permit
 Many other “market entry” barriers
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Leading to a more sustainable energy system
What Would I Like to See in NZ?
Technical: <10kW/40,000kWh is a good start but
 Simplify the application procedure and detail
 Mandate a standard “minimum certfication spec.” which Lines Cos
must accept, eg AS4777 plus any others required
 A new very small class of net metered microgeneration
(<5,000kWh/yr?) which is non-notifiable if it meets proscribed
standards (ie treated as an appliance)
 Market:
 Mandate a minimum payment /kWh exported which includes a 2 rate
option for on/off peak reward (feed-in tariff concept)
 On peak payment to include avoided GXP and line costs,
transmission and line upgrade costs based on asset management
plans
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Integration of community distributed energy solutions (IDES)
Measurement of Capacity Value
 A simple method for metering average capacity support
provided by general customer-generators
Existing
customer loads
kWh
Distribution
System
connection
On-pk/ off-pk
register
switch from
lines
company
Existing Revenue
Meter(s):
As required by
energy retailer
kWh
Capacity Meter:
Two Register Meter
with reverse stop,
connected as Export
Distributed
Generation
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What Would I Like to See in NZ?
PCE “Get Smart, Think Small” report Recommendation 1:
 That the Minister of Energy, as part of the New Zealand
Energy Strategy, develops a specific local energy work
programme for New Zealand that
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Endorses the concept of local energy
Identifies contributions LE could make
Set short, med long term uptake targets
Sets our govt roles and responsibilities
Provides a framework (for action)
 There are 6 comprehensive recommendations
 IE – the government takes a leadership role in facilitating the
introduction of these systems
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Integration of microscale energy systems
Micro Distributed Energy
 Potential transformation of the Electricity Supply
Infrastructure through microgeneration and microgrids
 Strategy:
 Central generation increasingly supplies large-scale users
 MicroDE initially provides supply to small owner-generators at the end
of the network
 Eventual penetration of customer microgeneration into urban areas
 Management of microDG should be through a national regulatory
framework and commercial pricing strategies – eg as for hot water
load control
 The network is still needed for this scenario – it provides load
diversity, for which customers must continue to pay (but not the
generators as well!)
Significant improvements in GHG reduction and energy
efficiency are possible if this technology can be delivered
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Integration of microscale energy systems
Micro Distributed Energy
 New Zealand business opportunities
 Supply-demand side interaction
 Paradigm shift in thinking
 New network technical issues
 2 way power flow
 protection
 New network management issues
 Capacity and despatch
 New products
 Materials and components
 Systems and control
 New market mechanisms
 A comprehensive RD&D programme is needed
 Feasibility and benefits
 Systems and technology research
 “Light house” community pilots to evaluate techologies and mechanisms
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Regulatory Framework Design
 What might happen if the framework is inadequate?
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Microgenerators may take the baseload residential demand
microCHP may destroy the ability to control water heating load
Residential network economics may worsen
Gas distributors may get rich
 What could happen under the right framework?
 Network capacity support from general customers
 Improved demand factor (more cost-effective networks)
 Also kVAr voltage support and other ancillary services (improved
power quality and reliability)
 Increased network efficiency (lower losses)
 Improved supply resilience (segmenting and self healing
networks)
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