Workshop N Technology & Innovative Energy Solutions … Cleveland Microgrid as a Strategy for Economic Growth 3 p.m. to 4 p.m.
Biographical Information Andrew R. Thomas, Executive-in Residence, Energy Policy Center Cleveland State University, Maxine Goodman Levin College of Urban Affairs 2121 Euclid Avenue, UR 132, Cleveland, OH 44125 216-687-9304 a.r.thomas99@csuohio.edu Andrew Thomas is an Executive-in-Residence in the Levin College of Urban Affairs of Cleveland State University, where he leads research for the Energy Policy Center. His research focuses on electricity regulation and markets, distributed generation, transportation and oil and gas production, regulation and markets. He teaches energy law and policy in the Cleveland Marshall School of Law and in the Levin College. He also teaches oil and gas contract short courses at various venues around the world. Prior to coming to CSU in 2008, Mr. Thomas was an energy lawyer in private practice in New Orleans, Louisiana, and a geophysicist with Shell Oil Company. Mr. Thomas received his J.D. from Loyola University, where he was editor of the law review. He is currently an Ohio Oil and Gas Commissioner, and is of-counsel to the Cleveland, Ohio- based law firm of Meyers, Roman, Friedberg and Lewis. Marc G. Divis, President, Cleveland Thermal LLC 1921 Hamilton Ave., Cleveland, OH 44114-3515 216-241-3636 mdivis@clevelandthermal.com Marc Divis is the president dually responsible for the oversight and leadership in all operational, customer growth and retention, and strategic planning aspects of both Cleveland Thermal, LLC and Akron Energy Systems LLC. He has been an employee at the Cleveland Thermal facility for more than 20 years. Over the course of his career at Cleveland Thermal, Marc has served in the capacities of project engineer, distribution manager, and director of engineering, leading to his current position as president. During his tenure at Cleveland Thermal, he has developed a talented team of professionals that are focused on safety, environmental stewardship, customer service, and economic sustainability. Mark Henning, Graduate Research Assistant Energy Policy Center in the Maxine Goodman Levin College of Urban Affairs Cleveland State University 517.648.5428 m.d.henning@vikes.csuohio.edu Mark Henning is a graduate research assistant for the Energy Policy Center in the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. He recently completed his M.S. in Mathematics with Specialization in Applied Statistics at CSU and is currently in the last semester of the Master of Public Administration program at Levin College where his focus area has been public financial management.
Cuyahoga County Microgrid Planning Project A technical, financial, and feasibility study for a County Microgrid MEC Energy Conference September 2018 Andrew R. Thomas and Mark Henning Cleveland State University µGrid Cle 1
Cuyahoga County MicroGrid 2
No Power to the People So Why the Poor National Academy of Understanding? Science Report on Nation’s Electricity System o Complexity of Electricity o “Recommendation 1 to Pricing. DOE: Improve o Lack of Uniformity in understanding of Regulation. customer and society o Value of Resiliency value associated with Highly Dependent upon increased resilience….” Circumstances. September 2017 . 3
What is a Microgrid? A microgrid is a contained energy system capable of balancing captive supply and demand resources to maintain reliability • Defined by function, not size • Incorporates multiple distributed technologies • Maximizes reliability and efficiency • Can include other utilities – steam, hot water, chilled water, network connectivity • May function in “islanded mode” disconnected from larger utility grid
Number of U.S. Microgrids Sorted by End Use and Scope Scope of Microgrid Type of Entity Served Campus Community District Nanogrid Total Commercial 4 0 0 6 10 Commercial, 2 0 0 0 2 industrial Commercial, 0 0 4 0 4 residential Critical services 6 0 4 4 14 Education 13 0 0 4 17 Industrial 3 0 1 2 6 Military 14 0 0 0 14 Residential 3 0 0 1 4 Utility 0 7 0 0 7 Total 45 7 9 17 78 Current as of August 2018 µGrid Cle
Commercial Microgrid Location Attributes o Potential anchor end users o Ability to leverage existing infrastructure o Ability to grow both loads and infrastructure o Economic relevance of areas o Available land for new infrastructure and end users o Regulatory compatibility 6
Leveraging Existing Infrastructure Cleveland Public Power Cleveland Thermal o Existing electric distribution o Electric power project in system process 4 transmission interconnections Conversion from coal to natural o o gas completed in 2016 32 substations o CHP Permit Acquired o Street level distribution o 13 to 40 MW capacity sizing o Metering and control systems o Connected to CPP system o o Regulatory flexibility through CT Hamilton Plant Developing rate structures o o Existing district energy system Contracting for generation o for steam and chilled water Contracting for microgrid o management µGrid Cle
Proposed Microgrid Footprint o Size: 48 MW o Resiliency: 13 MW o Size: o 4.8 Sq Miles o 3000 acres o 133 mm sq ft 8
Potentially Developable Land Within Microgrid Area µGrid Cle
Who Might Be Interested in Grid Resiliency? o Universities o Data and Financial Centers o Law, Accounting, Consulting Firms o Hospitals o Emergency Services o Food Services o R&D Companies 10
Strategies for Valuing Resiliency for Business o Lost Production o Value of Lost Load o Stated Preference o Survey o Interviews o Avoided Costs o Reduced Investment into On-Site Resiliency Infrastructure (Eaton Industrial UPS) o Business Interruption Insurance 11
Lost Production Production Function Approach to VOLL GDP for Industry ($) Electricity Consumption for Industry (kWh) Why VOLL Approach? • One of the more widely used methods for measuring a customer’s likely willingness to pay for reliable electricity service. – E.g. ERCOT • Data easy to obtain. – BLS; Census Bureau • Analysis at specific industry levels. 3 rd and 4 th digit NAICS – µGrid Cle
Production Function Approach Highest Values of Lost Load for All Industry Groups Computer systems design and related services - (5415) Management, scientific, and technical consulting services - (5416) Industry Group Description and NAICS Legal services - (5411) Insurance Carriers and Related Activities - (524) Accounting, tax preparation, bookkeeping, and payroll services - (5412) Home health care services - (6216) Cable and other subscription programming - (5152) Air transportation - (481) Administrative and Support Services - (561) Advertising, public relations, and related services - (5418) Software publishers - (5112) Water transportation - (483) Securities, commodity contracts, & other fin. investments/activities - (523) Transit and ground passenger transportation - (485) Other transportation equipment manufacturing - (3369) Household appliance manufacturing - (3352) Audio and video equipment manufacturing - (3343) Offices of physicians - (6211) Truck transportation - (484) Other professional, scientific, and technical services - (5419) Specialized design services - (5414) Rental and Leasing Services - (532) Newspaper, periodical, book, and directory publishers - (5111) Offices of other health practitioners - (6213) 0 20 40 60 80 >100 VOLL (Value Added/kWh) Data Sources: Bureau of Labor Statistics; U.S. Census Bureau 1 hour outage for 1 MW facility would cost “Securities and Financial Investment” company $50,000
Stated Preference Approach: Survey Strategy o 35-question survey designed by the μ Grid Study Team. Goals: o Identify level of interest in resiliency o Identify nature of commercial activity o Screening Criteria: o Respondents have a meaningful role in energy procurement (e.g. sole decisions maker) o 1 Hour power outage has a major or moderate effect on company income o Power represents a high or moderately high percentage of respondent’s operating costs. o Methodology o Use of Qualtrics online platform o 155 respondents 14
Survey Results "Which of the following average "all in" prices per-kWh for electricity that included 99.999% availability would provide a significant inducement for you to locate your business within a microgrid?" 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 10 cents 11 cents 12 cents 13 cents 14 cents 15 cents 16 cents 17 cents 18 cents or more or more or more or more or more or more or more or more or more 15
Avoided Costs Approach: Backup Infrastructure Costs for Data Centers o Expedient/Intel cost calculator for in-house data centers. o Based on data center industry’s 4-level uptime classification system. Annual Expected Expected Service Time Without Time Gained at Service Tier Service Higher Level Availability (in minutes) (in minutes) 1 99.671% 1729 --- 2 99.741% 1361 368 3 99.982% 95 1266 4 99.995% 26 69 16
EIA Average Commercial Electricity Costs Ohio: 9-10.5 cents per kWh 18
Sensitivity Analysis For Three Tier Customer Rate Structure $25,000,000 $20,000,000 $15,000,000 Tier 1 $10,000,000 MIcrogrid NPV Tier 2 $5,000,000 Tier 3 $- $(5,000,000) $(10,000,000) $(15,000,000) $(20,000,000) $80 $90 $100 $110 $120 $130 $140 $150 Customer Rate ($ / MWh) 19
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