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Facilitating Microscale Distributed Generation in New Zealand. Alister Gardiner. Prepared for: NERI Energy Conference, Massey Date: July 07. Slide Overview Headings: Blue Arial 2 8 pt Bold Subheading: Green Arial 2 4 pt Bold Text can be added by overtyping the current text.

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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

Slide Overview

Headings: Blue Arial 28pt Bold

Subheading: Green Arial 24pt Bold

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Overview
  • 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
drivers for change

Slide Overview

Headings: Blue Arial 28pt Bold

Subheading: Green Arial 24pt Bold

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Drivers For Change
  • Delivery of energy services faces new challenges:
    • Consequences of environmental damage
    • Energy security
  • Contributing factors
    • 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
drivers for change1

Slide Overview

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Subheading: Green Arial 24pt Bold

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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:
    • 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

government role

Slide Overview

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Subheading: Green Arial 24pt Bold

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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”?
distributed generation

Slide Overview

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Subheading: Green Arial 24pt Bold

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Distributed Generation
microgeneration

Slide Overview

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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

Conversion device

M

Distributed Resources including

wind, solar, battery storage, fuels

Potentially a substantial increase in system complexity

microgeneration1

Slide Overview

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Through weight of numbers MicroDG could deliver a network transformation

Large scale DG is supply side / business driven

Small scale DG will be demand side driven, but will be influenced by supply side strategies

A market framework that recognises the value of the full value of agregated microDG is desirable

MicroGeneration

BAU

Network Transformational

microgrids

Slide Overview

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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

microgrids1

Slide Overview

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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
microgrids2

Slide Overview

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Conventional Distribution

Centralised Generation

Transmission

Distribution

1-way power flow

~

2-way power flow

~

~

fuel based CHP

Example of a Microgrid connected to the existing Distribution System

Other network feeders

PV, wind,

hydro

Micro-generation

Community Microgrid

M

M

M

M

M

M

~

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?
microgrids3
MicroGrids
  • The value of the network - ADMD capacity reduction
    • 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
microgrid options

Slide Overview

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MicroGrid Options

Intermittent local generation - Network dependent

Microgrid environment

Network provides power balancing and ancillary services (voltage, frequency, etc.)

Aggregated passive generation

Firm local generation - Network independent: capable of islanded operation

Microgrid environment

Microgrid can provide power balancing and ancillary services (voltage, frequency, etc.)

Aggregated smart generation

public good outcomes

Slide Overview

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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
network design issues

Slide Overview

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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

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

Network Design Issues
network design issues1

Slide Overview

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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

Integration of community distributed energy solutions (IDES)

Network Design Issues
current dg status

Slide Overview

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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
what would i like to see in nz

Slide Overview

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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
measurement of capacity value

Slide Overview

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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

Existing Revenue Meter(s):

As required by energy retailer

Capacity Meter:

Two Register Meter with reverse stop, connected as Export

kWh

On-pk/ off-pk register switch from lines company

Distributed Generation

what would i like to see in nz1

Slide Overview

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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
      • 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
micro distributed energy

Slide Overview

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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

micro distributed energy1

Slide Overview

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Subheading: Green Arial 24pt Bold

Text can be added by overtyping the current text.

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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
regulatory framework design

Slide Overview

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Regulatory Framework Design
  • What might happen if the framework is inadequate?
      • 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)