Concepts and Incentives for the Decentralization of Electrical Power Systems based on Building Energy Management Systems

Table of Contents

Glossary

List of Figures

List of Tables

1 Introduction
1.1 Motivation and Context
1.2 Research Questions and Structure

2 Fundamentals and State of the Art
2.1 Challenges Arising from the Electrical Power System Change
2.1.1 Introduction to Electrical Grids
2.1.2 Supply follows Demand – Traditional Electrical Power Systems
2.1.3 Demand follows Supply – Future Electrical Power Systems
2.2 Classification of Micro Grids
2.2.1 Micro Grids in General
2.2.2 Different Types of Micro Grids
2.3 Overview of Building Energy Management Systems (BEMSs)
2.3.1 Definition
2.3.2 Components, Functions and Capabilities
2.3.3 Targets, Key Success Factors and Benefits
2.4 Demand Side Management (DSM) and Demand Response (DR)
2.4.1 Definition
2.4.2 Operational Drivers and Functions
2.4.3 Benefits
2.5 Performing Demand Side Management with BEMS in Micro Grids
2.5.1 Overall Approach
2.5.2 Interoperability within the Grid Hierarchy to Conduct DSM
2.5.3 Demonstration Sample

3 Energy-oriented Characterization of Building Types
3.1 Significance of the Buildings Sector for Energy Consumption
3.1.1 Impact and projected Growth of the Building Sector
3.1.2 Energy Efficiency, Energy Sufficiency and Distributed Generation by Buildings
3.2 Industrial Buildings
3.2.1 Definition and Examples
3.2.2 Impact and Future Development of Delivered Energy Consumption
3.2.3 Structure of Delivered Energy Consumption
3.2.4 Consumption Patterns and Behavior
3.3 Commercial and Public Buildings
3.3.1 Definition and Examples
3.3.2 Impact and Future Development of Delivered Energy Consumption
3.3.3 Structure of Delivered Energy Consumption
3.3.4 Consumption Patterns and Behavior
3.4 Residential Buildings
3.4.1 Definition and Examples
3.4.2 Impact and Future Development of Delivered Energy Consumption
3.4.3 Structure of Delivered Energy Consumption
3.4.4 Consumption Patterns and Behavior
3.5 Summary of Sector Impact and Devices

4 The Potential of Buildings to Offer Grid-Supporting Services
4.1 Target and Factors of Electric Power Grids and their Influences
4.1.1 Target and Factors
4.1.2 Influences
4.2 Building Potential for Grid-Supporting Services
4.2.1 Active Energy Balance
4.2.2 Reactive Energy Balance
4.2.3 Energy Storages

5 Incentives for BEMS Stakeholders to Form Micro Grids and Offer Grid-Supporting Services
5.1 Vision of a Decentralized Electrical Power System
5.2 Market Opportunities for Monetizing Flexibilities
5.2.1 Energy Markets Today
5.2.2 Future Development and Possible Solutions
5.3 Potential Stakeholder Interests
5.3.1 Transmission and Distribution System Operators
5.3.2 Utilities
5.3.3 Government
5.3.4 End-User Costs and Revenues
5.4 Industrial Application Scenario
5.4.1 Current Challenges
5.4.2 Potential Sector-Specific Interests
5.4.3 Incentives and Potential Approaches
5.5 Public/Commercial Application Scenario
5.5.1 Current Challenges
5.5.2 Potential Sector-Specific Interests
5.5.3 Incentives and Potential Approaches
5.6 Residential Application Scenario
5.6.1 Current Challenges
5.6.2 Potential Sector-Specific Interests
5.6.3 Incentives and Potential Approaches
5.7 Current Approaches to Address End-User Incentives

6 Conclusion
6.1 Summary of the Results
6.2 Outlook

Reference List

Abstract

Electrical power systems face a paradigm shift: the change from supply-side orientation to demand-side concentration. This shift is promoted by an increasing share of renewable energy generation that is predominantly supplied on a local scale. Thus, electric power grids designed to serve unidirectional top-down energy distribution have to cope with increasing bidirectional power flows as a result from intermittent renewable energy supply. This compromises grid stability. Costs of conventional energy supply and energy related costs, resource depletion, climate change and dependence as well as supply security and reliability present further challenges in electrical power systems. Together they drive the engagement towards new technologies and approaches.

The thesis examines Building Energy Management Systems (BEMS) and Micro Grids as well as their combination and the opportunity to conduct Demand Side Management (DSM) in order to integrate renewables, increase grid stability and raise independence. BEMS are systems that undertake energy management, controlling and prediction for loads, generators and storages of specific buildings. Micro grids interconnect distributed generation and storage devices. Both concepts incorporate considerable integration of Information and Communication Technology (ICT) which adds information flows to power flows. By aggregation of capacities, complexity reduction and adding flexibility to the local scale this combination has significant potential to tackle the challenges of the ongoing paradigm shift. The potential of buildings together with stakeholder interests and incentives to engage and propagate the application of these concepts as well as collaboration opportunities will be focus of this work.

Technologies and enabled approaches can raise energy autonomy of buildings and networks of buildings, increase local reliability and security of energy supply but also support the utility grid by offering grid-supporting services. Therefore different building sectors will be assessed in this work and give a framework for the sector-specific evaluation of incentives. Monetary incentives through supply and trade of flexibility as well as reduction of energy and related costs or generation of revenues through power and ancillary services provision provide the most attracting incentives. Flexible loads and generators thus offer high potential for rewards. Markets and participation requirements will be outlined in this thesis. But also environmental issues are regarded these distributed energy systems. Furthermore local aggregation and consolidation enable utility grid relief and compensate the inherent intermittency of renewable energy supply.

Glossary

illustration not visible in this excerpt

List of Figures

Figure 1: Triangular of Energy Policy Goals*

Figure 2: BEMS Big Picture

Figure 3: Categories of DSM [PaDi11]

Figure 4: Micro Grid Reference Structure

Figure 5: World Building Sector Delivered Energy Consumption [Eia13, p.111]

Figure 6: World Industrial Sector Delivered Energy Consumption [Eia13, p.7]

Figure 7: German Industrial Delivered Energy Consumption in 2011 [cf. Ageb13, p.25]

Figure 8: World Services Sector Delivered Energy Consumption [Eia13, p.14]

Figure 9: Delivered Energy Demand, German Services Sector in 2011 [cf. Ageb13, p.25]

Figure 10: Delivered Energy Demand of Services Sector Worldwide in 2011 16

Figure 11: World Residential Sector Delivered Energy Consumption [Eia13, p.14]

Figure 12: German Residential Delivered Energy Consumption in 2011 [cf. Ageb13, p.25]

Figure 13: Delivered Energy Consumption of Residential Sector Worldwide in 201020

Figure 14: Summary of Worldwide Delivered Energy Consumption [cf. Eia13, p.225]

Figure 15: Growth Rates of Worldwide Delivered Energy Consumption [cf. Eia13, p.225]

Figure 16: Big Picture - Using Buildings to Support Grid Stability

Figure 17: Factors Constituting Grid Stability [cf. Knor12]

Figure 18: Control Scheme and Actions Starting with the System Frequency [Ents13, p.2]

Figure 19: PV-feed-in Leading to Voltage Exceedance [cf. Sma12, p.18]

Figure 20: Example of Battery Storage Increasing Own Consumption24

Figure 21: Energy Trading Time Scale*

Figure 22: Micro Grids Locally Consolidate Demand and Supply

Figure 23: Monetary End-User Incentives and Expenses

Figure 24: BEMS and MG - Residential Roll-Out Approach

List of Tables

Table 1: Voltage Level Hierarchy of Electric Power Grids [cf. BuWO13, pp.23–25]

Table 2: Classification of Micro Grids

Table 3: Summary of Sector Impacts and Devices

Table 4: Overview of Countermeasures for Grid Frequency Deviations

1 Introduction

The following chapter will present the motivation of this thesis and its context regarding the political, socio-economic, environmental and technical domains of electrical power systems. Furthermore it will present the research questions and the structure of this work in order to answer the questions.

1.1 Motivation and Context

This thesis treats a major topic of the ongoing paradigm shift in electrical power systems: the change from supply-side orientation to demand-side concentration. This shift is driven by increasing concerns about unsustainability of energy supply, resource depletion and dependence as well as integration of expanding distributed energy resources (DER). Although need for sustainability is commonly agreed upon on national and international scale, binding targets are rare. In European Union the European Commission regulates the political framework for energy and climate policy. The current framework is referred as the ’20-20-20-targets’ which is a set of targets to be collectively fulfilled by 2020. They include:

A reduction of greenhouse gas (GHG) emissions by 20% compared to 1990, An energy efficiency increase of 20% by reducing primary energy consumption and A share of renewable energy sources (RES) in the total energy consumption of 20%.¹

The European policies set the minimum requirements for Germany to achieve. In 2010 the German government introduced the energy concept 2050. With this framework Germany intends a reduction of GHG emissions by 80 percent compared to 1990, and RES sharing 80 percent in gross electricity generation until 2050. Both targets purpose fundamental change in energy sourcing and considerable decrease in energy consumption and associated emissions. The German Energy Transition known as “Energiewende” was born. That expression especially became widespread after the nuclear meltdown in Fukushima that raised a global debate about the hazards of nuclear energy generation. In Germany this debate finally led to the abrupt shut-down of eight nuclear power plants and the decision to exit from nuclear power generation by 2022. This puts additional pressure on turning a mostly fossil based into a mainly renewable based energy provision. But this process involves deep political interventions and economic implications for both, suppliers and consumers. Its socio-economic, political, technological and environmental consequences are fundamentally changing the energy system of the future.

German national and transnational bindings became partly operationalized through the massive expansion of the Renewable Energy Sources Act (EEG) in recent years. The act regulates subsidization of renewable energy generation and involves feed-in compensations whose costs are allocated to the energy end-users, e.g. almost 22 billion euro for 2014². Since its introduction in 2010 its share in the average price of residential customer electricity has risen from 9 to 19 percent (per kWh) [cf. GöHL13]. Not only this rapid increase but also massive rebates for energy-intense industry fuelled the debate about the acts affordability, effectiveness and fairness.

Energy policy serves three targets: security of supply, sustainability and affordability (see Figure 1). Last is at risk due to the massive cost expansion that is not related to the energy itself. But the previously described expansion also shows negative effects on the two others. Sustainability is threatened since electricity generation from lignite was at its highest level in 2013 since 1990 according to relatively cheap production and deficient emission trading. Secure supply turns out to be gradually challenging due to the intermittent nature of renewable energy supply combined with their prioritized feeding. The share of renewable energies in Germany’s gross electricity consumption has increased up to 25.3 percent in 2013 according to the Federal Bureau of Statistics, compared with 16.3 percent in 2009³. Wind and solar power as fluctuant resources accounted for more than 50 percent of that part [cf. Nick14, p.2].

illustration not visible in this excerpt

Figure 1: Triangular of Energy Policy Goals*

Past and future expansion of renewable energy resources and thus increasing intermittency and decentralized provision further entail huge economic, social and technological. The prevailing paradigm of an energy system in which supply follows demand is changing to a new regime of generation, in which demand has to follow supply. This strongly stands in contrast to what electricity grids have been designed for. Grid stability maintenance, cost-effectiveness of renewables and consumers becoming more actively involved are just a few to mention. Consumers generating energy locally and becoming more sensitive about their energetic behavior turn into prosumers. Prosumers are distinct from consumers since they are actively in the operation of the electrical power system. They not only raise their autonomy from utilities, but also they profit from feed-in compensations.

Approaches and technologies exist and evolve that have the potential to mutually address these challenges: increase distributed generation and system-wide propagation of renewables, while maintaining grid stability and proving cost-effectiveness. They also serve other purposes like effective demand-supply-matching on lower voltage levels, higher usage transparency and consciousness, and increasing energy efficiency. The whole set is summarized under the domain of smart energy referring to energy systems based on Information and communication technology (ICT) [cf. Baum12, p.39].

Some approaches and technologies are connected to so-called micro grids. They connect together energy consuming, generating and storing entities, not only by means of a grid with bidirectional energy flows, but also through extensive ICT infrastructure. Entities are operated by prosumers and constitute the micro grid serving each other to maintain load balance within the grid and supporting the utility grid. This entails generation and feeding-in of energy, storing energy, shifting demand in time, collaborating with other prosumers, etc. They can support the utility grid with energy provision, ancillary services, etc. to contribute to overall system reliability. ICT is a key enabler for this community of energy and information exchange.

Building energy management systems (BEMSs) are part of that crucial ICT. These systems control, plan and execute the balancing of generation and consumption of a building. They further have the potential to coordinate with other buildings, or to integrate signals from the utility grid. Involving different building types, technologies and roles requires dynamic and intelligent systems, and also a willingness to collaborate. These aspects finally serve the purpose to smoothen fluctuation, integrate renewables, reduce GHG emissions, increase energy efficiency, raise autonomy or act as a competitive entity on the energy market.

1.2 Research Questions and Structure

The potential of BEMS in micro grids is addressing challenges arising from the previously mentioned paradigm shift. Hence, the thesis deals with the motivational and collaborative structures behind them and the building’s potential to support the electrical power system. This leads to the following research questions, which are answered by this thesis:

1. What are the challenges arising from the fast increase of renewable energies and consumers turning into prosumers?
2. How do BEMS and micro grids and address these challenges?
3. How are different building types energetically characterized?
4. What motivates stakeholders to apply BEMS and to form micro grids?

To answer these questions I will structure the thesis as follows.

In chapter two, I will point out the current state of the art regarding electrical grids and present centralized and decentralized approaches. I will show micro grids and BEMS as decentralized technologies. Subsequently, Demand Side Management (DSM) will be presented and finally lead to the integration of BEMS and micro grids.

Chapter three deals with the key nodes of energy grids: buildings. Here I will present current importance, future development and an energetic characterization of different building types clustered into industrial, public/commercial, and residential entities.

Subsequently, chapter four focuses on grid-supporting services and their provision by buildings using BEMS and organizing in micro grids. Grid requirements will be described, factors and influences derived.

In chapter five, I will focus on drivers and ways of collaboration – combining current approaches with emerging future developments. I will describe systematic visions, show trading mechanisms and examine potential stakeholder interests. Sector-specific scenarios will be presented and current approaches will be shown at the end of the chapter.

Finally a conclusion will be drawn, ending up with a short overview of the insights connected to the research questions. Furthermore I will give an outlook and relate the findings to the paradigm change with its systematic long-term change. Therefore the main purpose of my work is summarizing the current state of research and finding incentives and practices that combined with innovative technologies support the systematic change.

2 Fundamentals and State of the Art

This chapter presents the challenges that result from the transition in electrical power systems and concepts in order to address these challenges. After an introduction into electrical grids, the centralized and decentralized paradigm will be shown. Technical, political and economic challenges will be outlines. Micro grids, BEMS and DSM will then be described and finally connected together.

2.1 Challenges Arising from the Electrical Power System Change

Miscellaneous domains shape the public debate about the predominant electrical power system that is characterized by centralized generation, focus on fossil fuels, top-down distribution and concentration on supply-side efficiency increase. Resulting actions will fundamentally transform the sourcing of electrical energy, the operation of that system as well as stakeholder roles and motivations and thus our daily life. Politics, sciences, society and economy show stark trend towards a future electrical power system focusing on demand instead of supply. DG and DS as well as local responsive demands [cf. Bayo09] will prevail in that system. Hence, the following paragraphs will present a short summary of both, the past and the future system beginning with a general introduction into electrical grids. The change yields ambitious challenges which are summarized at the end of this subchapter.

2.1.1 Introduction to Electrical Grids

Continuous flow is a basic principle of electric energy since it cannot be stored – just converted to another form of energy that is storable. Hence, consumption and generation have to be balanced at all times. This crucial requirement is addressed by complex electrical power systems which encompass all technical facilities to generate, transport and distribute electrical energy within predetermined system boundaries [Schw12a, p.19]. Its components are manifold and comprise steam, gas, hydroelectric or wind turbines, generators, power lines as well as complex information systems to maintain and optimize system-wide operation [Schw12a, p.20].

“The structure of the electrical system has not changed much since it was first developed: it is characterized by the one-way flow of electricity from centralized power generation plants to users.” [Arno12, p.487] Since electrical grids represent an integral part of electrical power systems, their design traditionally follows the top-down electricity flow. Thus energy transmission and distribution are realized by a hierarchical structure of different voltage levels whose key figures for Germany are shown in Table 1: ⁴

illustration not visible in this excerpt

Table 1: Voltage Level Hierarchy of Electric Power Grids [cf. BuWO13, pp.23–25]

Extra high-voltage lines “transmit the electrical energy from the large power plants to substations near the centers of consumption. […] In the substations, the extra-high-voltage is stepped down to 110,000 V.” From these substations, electrical energy is distributed to further substations located in cities or rural areas. Subsequently, electrical energy “is stepped down to medium voltage” – 10,000 V in urban and 20,000 V in rural areas. “Small industrial establishments with a power demand between several hundred KW and several MW are supplied directly from this voltage level.” Finally, distribution substations step down medium- to low-voltage. “At this voltage, the low-voltage lines supply surrounding houses or small businesses with electrical energy.”⁵

Predominantly, electrical energy is generated by steam, gas, water or wind flows that are driving a turbine which is connected to a synchronous generator. Thus, alternating current (AC) became the prevailing manifestation of electric energy which yields significant reduction of transportation losses. Since appliances exist that require direct current (DC) rectifiers are necessary to convert AC into DC. With photovoltaic generation there is also a case of DC generation which has to pass inverter-modules to be converted to AC prior to its transport. The frequency of AC oscillations in an electric power grid is called power line frequency and serves as an important indicator for grid stability. For instance, the European integrated network has a nominal value of 50 Hertz (Hz) which has to be maintained with a very narrow tolerance range of ±0.2 Hz⁶. Thus it reflects synchronization of all generators that are connected to the system. When demand for electrical energy rises or generation decreases, remaining generators have to stem the demand which works like a counterforce and thus decelerates their rotary speed. As a consequence, frequency drops. In the opposite case generators rotate faster and frequency will rise. Main objective is to keep generation and consumption in balance at all times. When power line frequency fulfills its nominal value balancing is achieved.

Since electrical grids present a natural monopoly, their operation is object to prudential regulation. The German transmission area is divided into four control areas which are operated by distinct grid operators. Their purpose is to secure a stable and reliable operation of the grid [Schw12a, p.30]. In fulfillment of that task, they depend on additional services offered by system components and end-users that are linked to remunerations, e.g. load shedding or offering reactive power [Schw12a, p.30]. They are furthermore entitled to intervene in power plant operation of utilities as well as industrial bulk-consumers. Furthermore it is necessary to distinguish the operation of transmission and distribution grids since former refer to extra high-voltage lines which are used as part of the German integrated network, but mostly for energy exchange on an international scale. In contrast distribution grids relate to high-, medium and low-voltage lines. To remunerate the regulated operation of both parts, grid utilization fees are charged to end-users as part of the final electricity price, e.g. 21 percent in Germany⁷. Control areas are generally working autarkical with respect to economic and technical issues. Nevertheless, different areas are connected with each other via interconnecting lines and exchange points forming an integrated network that combines these control areas with each other and further integrated network areas. Interconnection regarding extra and high-voltage lines is conducted by transformers which are also called system interconnectors. It also led to specific system-wide advantages like more efficient power plant usage, higher security and better reliability by parallel operation to back each other up.⁸ The linkage additionally enabled utilities to invest in major power plants since planned power outputs might not be fully required in a specific control area but interlinking allows for power exchange [Schw12a, pp.25–26]. This has implications for power trading through buying and selling electric power from and to other control areas. It also provides the opportunity for mutual power exchange in the case of failures or other unplanned events.

“However, the [German] interconnected system does not end at the German border.”⁹ It is part of the European Network of Transmission System Operators for Electricity (ENTSO-E) that “represents all electric TSOs in the EU and others connected to their networks, for all regions, and for all their technical and market issues.”¹⁰ This Europe-wide integration serves the major goal of “exchanging energy between the interconnected partners while maintaining security.”¹¹ It yields an integrated network to provide reliable, stable and well-organized power exchange and failure response on an international scale [Schw12a, pp.30–31]. For German power grids the requirements are relatively high since its central geographical location yields large power transits.

2.1.2 Supply follows Demand – Traditional Electrical Power Systems

Centralization and supply-side orientation characterized the electrical power system that has evolved within the last century. This perspective takes demand as given and adapts to it by provision of the required energy [cf. PoJa12, p.3]. Hence the role of end-users can be defined as follows: “Consumers are passive receivers of electricity without further participation in the operational management of generation sources and grids. Each user is simply a ‘sink’ for electricity.” [Bayo09, p.381] Central reactions partially encompass fast response times of mainly fossil-fueled power plants with 41.3 percent coal/peat, 21.9 percent natural gas and 4.8 percent oil in 2011¹². Besides clear separation of consumption and generation the paradigm also includes a high concentration of total power capacity. Thus a considerable share of the system’s total power capacity belongs to a “few central generating stations (high-voltage producers)” [Inie13, p.XV] compared with the total amount of consumption points (houses, factories, commercial buildings, etc.) [cf. Inie13, p.XV] [cf. PoJa12, p.5].

Furthermore this design entails requirements that by the time turned into problems. Reliable and stable energy supply requires permanent balancing of generation and consumption to cope with fluctuating demand. Due to comprehensively lacking load control a resolution by centralized bulk energy storages and fast reacting power plants becomes necessary to exploit fluctuant energy supply. Since technological progress in terms of electric-chemical energy storages has not reached yet the capacities for centralized bulk storages, and since physical opportunities (e.g. for Compressed Air Energy Storages, Pumped Storage Hydro Power Stations) heavily depend on geographical circumstances, large-scale energy storages remain a non-feasible approach in most cases. In addition the process of converting chemical into electrical and thermal energy taking place in fossil-fueled power plants involves a considerable emission of greenhouse gases – primarily carbon dioxide, and noxious emissions [cf. Bayo09, p.379]. Their influence on global warming and environmental pollution as well as finite nature and instability of fossil fuel supply [cf. MaCC11] are symptomatic for the unsustainability of that system. Increasing consciousness for sustainable and environmentally sound energy supply shows its effects since policy makers around the world strive towards renewable-based systems, and thus sustainable and – in human terms – endless energy resources.

2.1.3 Demand follows Supply – Future Electrical Power Systems

The German decision of turning its mainly fossil- into a primarily renewable-based electrical power system reveals broad socio-economic, political and technological effects. Since RES are increasingly penetrating systems also on a global scale, a new paradigm in which demand follows supply develops. Nevertheless, the noticeable shift to DG “is not new at all. In the early days of electricity generation, DG was the rule, not the exception.“ [cf. Bayo09, p.378]

Controllability of energy supply decreases according to higher fluctuation of RES like wind or photovoltaic power and the lack of centralized mass storage capacities. Since better controllable fossil-based sources are phased out by renewables, controllability continues to decrease. Considerable loss of control is the result which has to be compensated. Hence, the demand side is considered to offer controllable loads. Thus the fluctuation of supply in order to a higher integration of RES is finally resulting in a new architecture in which the demand side has to show much more flexibility than ever before.

Furthermore infrastructural aspects must be considered. The grid requirements in this new energy system show limited compatibility with those of the old system. The new system involves bidirectional energy flows since concentration disappears caused by more end-users turning into suppliers of energy. They offer energy by means of electrical, thermal and cooling power to exploit the total energy output. As a result consumers turn into prosumers through active involvement. In this “power system composed of distributed energy resources (DERs), much smaller amounts of energy are produced by numerous small, modular energy conversion units, which are often located close to the point of end use.” [cf. Bayo09, p.377] Thus DG is mainly distinguished from the contrary centralized generation by means of proximity and capacity since DG units are generally closer to load sites and show fewer capacities (1 kW to 1 MW) [cf. Bayo09]. Proximity of supply and demand entails grid relief; however it has to provide bidirectional flows and supplementary infrastructure in terms of ICT to facilitate coordination and controllability on the demand side. The results are multifaceted with new roles, disappearing and evolving generators, economics and ageing infrastructure becoming modernized, expanded and smart. Hereby, grid modernization is driven by “emissions, reliability, supply, and infrastructure upgrade concerns.” [ZTZO11, p.2]

Three main technical elements of these increasingly important subsystems in the future energy system can be identified: local responsive demands, DG and DS systems [cf. Bayo09, p.377]. They entail integration and disintegration from the system, which means to operate connected to or disconnected from the utility grid. “In the new paradigm, the power sector will be far more information-intensive that it is today. We will have active empowered consumers who are able to make decision and take action to manage their energy consumption more efficiently. Reliability is no longer a constraint but an objective that needs to be maximized.” [PoJa12, p.10]

The ongoing transition not only entails new opportunities and changing roles, but also it provides challenges that have to be addressed to ensure its success. The general technical, economic and political challenges are summarized below and are significant drivers of concepts described within this thesis:

Technical challenges:

Temporal and spatial gap between energy demand and supply from RES

Intermittency and less controllability of RES supply

Compromised grid stability (voltage levels, power line frequency)

Grid infrastructure design and usage

Economic challenges:

Maintain industrial competitiveness and attractiveness

Cost-effectiveness of new technologies and approaches

Business models for the Smart Grid domain, e.g. price signals (global incentives)

Political challenges:

Temporal and spatial gap between energy demand and supply from RES

Intermittency and less controllability of RES supply

Compromised grid stability (voltage levels, power line frequency)

Grid infrastructure design and usage

This paper focuses on energy end-users, their capabilities and resulting potential to offer services to the grid in a micro grid environment by using BEMS. Not only grid support is subject to this thesis, but also higher efficiency and sufficiency of energy usage connected to awareness and sustainability of generation. Since end-users as human beings are essentially requiring on motivation driving their intention to take action, benefits to motivate them, either intrinsically or extrinsically, are fundamental part of this thesis. These drivers of motivation are crucial for utilizing the potential of great achievements in the energy research context.

2.2 Classification of Micro Grids

The following subchapter will present characteristics, functions and benefits of micro grids. Furthermore two classification schemes of micro grids will be outlined in the second part together with respective examples.

2.2.1 Micro Grids in General

Micro grids are a concept that embraced with the increasing trend of bidirectional power flows [cf. Bayo09, p.381] and growing RES penetration of electric power grids. The research community shows consensus about the main constituents of micro grids: DG sources, DS devices and responsive loads together with extensive ICT capabilities. The different components are well connected together through a grid that provides exchange of respective energy carriers, e.g. power lines for electricity or pipes for hot water. Something that considerably distinguishes a micro grid from conventional grids is that its components are well-connected to the Internet. This allows to accompany energy by information flows. If connected to the upper utility grid the micro grid itself can appear as one unique aggregated load or generator [cf. Bayo09]. Connecting to the utility grid by one point of common coupling (PCC) the micro grid operates in a non-autonomous way, or – by disconnecting – works autonomously in islanded mode [cf. Bayo09, cf. ChMa09, cf. DSMD12]. Focus can be to integrate multiple DER (renewable and non-renewable) into the electricity grid [cf. ChMa09] by means of physics and economics [cf. Bayo09]. But also energetic autonomy and resilience can be achieved through application of micro grids. With installed capacities ranging from about 10 kW to a few MW they are on a local scale [cf. ChMa09] and connected to the utility grid at low- or medium-voltage levels [cf. HAIM07]. Despite the fact that global perspective on micro grids concentrates on electrical energy exchange, different energy carriers (electrical or) are often incorporated within the micro grid itself.

Micro grids offer many advantages from both, the local and the global perspective, and are considered “as basic feature of future active distribution networks” [cf. Arno12, cf. Bayo09, HAIM07, p.80]. With the ability to isolate and through multiple dispersed generation resources and storages they combine environmental benefits and economic efficiency with safety, reliability and quality on a local scale [cf. ChMa09]. They pave the way for optimal resource exploitation by reducing energy loss due to shorter transmission ways [cf. PoJa12] and combination of different energy carriers [cf. ChMa09]. But also globally they support the utility grid by offering power, ancillary services, or peak reduction. This reduces disadvantageous effects of faults or planned outages. It also facilitates postponement or avoidance of infrastructural expansion by flattening demand or reducing demand for utility grid supply according to consumption of locally generated energy [cf. DSMD12]. By decentralization of energy infrastructure, autonomy is increased on a local scale. As a result utility energy prices are less affective to micro grids than to conventional end-users as their flexibility allows to locally compensate and consolidate supply and demand to a certain degree. For example time-of-use (ToU) tariffs will affect a micro grid less as peak demand smoothing is better conductible. Thus yields cost reduction which together with ancillary services remuneration or sale of excess power to the utility grid provide monetary incentives to the end-users. [DSMD12]

The future electrical power system uses Smart Grids which is “a group of technologies that adds monitoring, control, analysis, and digital communication capabilities to power networks to maximize the throughput of the system technically and economically.” [PoJa12, p.3] Micro grids are an essential component of future Smart Grids since they extend the concept of the Smart Grid to the local scale and by respective ICT infrastructure they provide those monitoring, control and analysis capabilities to this scale.

2.2.2 Different Types of Micro Grids

Fields of application are diverse and range from public, commercial, industrial and residential applications to military usage or combinations of them. This classification is derived from the wide array of demonstration sites in different countries. A distinct classification of micro grids differentiates not by application area but by their operation mode. This operation mode refers to the linkage of micro and utility grid. Three modes can be distinguished and will be described in the second part: remote, grid-connected and planned islanding [HAIM07, pp.92–93]. A further classification is quite similar to this and regards “Remote Microgrids”, “Complement Microgrids” and “Support Microgrids” [MaHo12].

A few practical examples with reference to the first classification scheme will be presented as follows:

Public micro grids encompass public buildings, for instance schools, universities, town halls, or prisons. In the public context, Santa Rita Jail in Dublin (U.S.) serves as an illustrative example: considerable peak demand mitigation and energy cost reduction were realized by combining investments in higher energy efficiency (chiller replacement, lighting retrofits and freezer upgrade) and installation of DER (rooftop PV arrays, fuel cell with heat recovery) and DS devices. Applying different energy vectors and conducting battery usage optimization further promoted these beneficiary achievements. Optimizing battery usage involved continuous information on the local utility energy price and current distributed generation amounts. The achieved cost reduction directly led to decreased operating costs redeeming investments. But also the utility grid profited by a flattened load curve of this major local consumer [cf. DSMD12].

Commercial micro grids concentrate on buildings or building networks mainly dedicated to business purposes. They include for instance restaurants, workshops, data centers, or office buildings. Green IT plays a significant role in this context of sustainable commercial buildings. Especially data centers comprise sensitive loads and cooling capacities which require high power quality and reliability of power supply [SaSS07]. Subsequently, Aperture Center, a micro grid project in Albuquerque (U.S.) will be presented. The project is a collaboration between Japan and the U.S. and was realized in 2012. The micro grid comprises a 50 kW PV, 80 kW fuel cell as well as a 240 kW natural gas-powered generator and a lead-acid storage battery power system. Complementary, further hot and cold thermal storage units are in use. Consequently, the system addresses the manifold component domains of a micro grid containing conventional and renewable generation devices and storage capacities for the different energy forms. Those components become monitored and controlled through a central control room and BEMS application [cf. RoMa14, p.247].

Industrial micro grids relate to those with an industrial application domain, e.g. manufacturing or steel production. Those sites are often characterized by a significant share of energy costs in overall costs and their major impact on the utility grid comprising significant loads. Thus the effects of load shedding, GHG emissions, energy efficiency, and so forth are much higher than in other cases. In the following an industrial use case will be presented: In [BKAO07] there is an industrial-commercial use case in Mad River, Waitsfield, Vermont. The micro grid is comprised of five commercial and industrial facilities¹³ which receive decentralized energy supply from two 100 kW biodiesel gensets, a 280 kW propane genset, a microturbine and PV facility. In this case there is no local storage capacity which makes islanding a difficult task. Furthermore a central microgrid controller is deployed.

Residential micro grids refer to agglomerations of residential buildings types like housing estates. The following case presents a residential micro grid that also falls under the domain of remote micro grids. The Kythnos Island Microgrid in Greece is a pilot microgrid used for the electrification of 12 houses via a 10 kW PV and 5 kW diesel genset. Furthermore a 53 kWh battery is employed for supply-demand-balancing issues¹⁴. Furthermore a central system house incorporates the diesel genset, battery and a computer to monitor and operate the grid. Monitoring includes information about current generation from solar and genset as well as the current load. In order to match demand and supply, battery supply is initiated or the battery will be charged with excess energy. This operation is furthered by an automatic operation of the diesel genset. [cf. HAIM07]

Military micro grids present a special use case by extending the existing concept of micro grids since herein relocation of the grid becomes possible. Thus military micro grids not only refer to fixed installations but also to temporary operating bases and mobile micro grids. Especially, the United States show extensive research in this field. A broad list of micro grids demonstration projects conducted by the Department of Defense can be found in a report from the National Renewable Energy Laboratory from 2011 [cf. AABD11]. The “dependence on petroleum for transportation and a fragile commercial electricity grid for electrical energy present a substantial risk to operations” [AABD11, p.86]. By combining micro grids with an introduction of electrified vehicles reduces petroleum dependence and consumption and provides “dispatchable electricity grid management functions” to “increase robustness and flexibility of the base energy supply network” [AABD11, p.86]. This integration of the Vehicle-to-Grid (V2G) concept has been conducted on a military demonstration site in Hawaii. [SkEK12] shows two US Army sites which incorporate RES, V2G and DS. Advantages pointed out are increased power reliability and availability during outages as well as improved overall energy efficiency. One of the demonstration site, called U.S. Army Aloha Microgrid 1, comprises a stationary solar carport, two diesel generators, three buildings being supplied and “bi-directional plug-in electric vehicles that can provide power to the Microgrid.” [SkEK12] Both sites are normally connected to the local utility grid.

After this distinction by application areas the following distinction will differentiate micro grids by their mode of operation, especially regarding the linkage between utility and micro grid.

Remote micro grids regard micro grids that are serving the “electrification of electrically non-integrated areas” and thus relate to “off-grid-communities” [HAIM07] . This applies to inaccessible areas where electrification is slowly-developed, uneconomic or technically non-feasible, e.g. islands or high-mountain areas. They encompass abundant RES like photovoltaic and wind turbines as well as diesel gensets (combination of diesel engine and electric generator) and reasonable application of CHP. These generation devices are combined with power management, real-time control and protection system as key success factors [cf. MaHo12]. In remote micro grids local maintenance of grid stability is of viable importance since there is no connection which allows for support from another grid. Thus, especially power line frequency and voltage stability have to be addressed.

Grid-connected micro grids focus on utility grid and thus are “normally connected to the substation as the PCC” [HAIM07], but mostly capable to run in islanded mode. The concept of Support micro grids [MaHo12] also falls under this domain, but with a higher integration level to the utility grid by not only providing reliability and power quality to local loads, but also contributing to utility stability and robustness. Thus, they serve as a “support energy source” with load response capability [MaHo12]. Primary focus of this category of micro grids is serving the utility grid.

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¹³ http://www.energyvortex.com/pages/headlinedetails.cfm?id=919&archive=1, accessed March 25th, 2014

¹⁴ http://www.microgrids.eu/index.php?page=kythnos&id=2, accessed March 25th, 2014