Microgrids Observations from a Project Development Perspective Midwest Energy Policy Conference October, 2016 Derek Price
MicrogridsObservations from a Project Development PerspectiveMidwest Energy Policy ConferenceOctober, 2016
Derek Price
Johnson Controls, Inc. —4
Johnson Controls - Microgrid Project Development
• Customers
• Projects
• Hundreds of Central Utility Plants and Distributed
Generation projects
• Project Engineering Development Teams
• Financing Mechanisms
• Products
• Building Automation
• Energy Storage
• Security
• Economic Dispatch Engine
• Complementary Relationships with other market
participants
Johnson Controls, Inc. —5
Microgrid – North American Adoption by Vertical in 2020(Market has high component of campus environments)
26.0%19.0%
Public Institutions
Military Installation
27.0%
City / Community
17.0%University / Research
9.0%
Commercial / Industrial 3.0%
Island
1.0%
Remote Communities
Source: GTM, Navigant, LBN, BCG, Johnson Controls Analysis
Johnson Controls, Inc. —6
Energy Storage Can Provide Multiple Operational Benefits Along With Cost Savings and Revenue Opportunities
Examples of potential value:
Power Quality Improvement
Power Factor Correction
Voltage Support
Back Up Power
Demand Charge Management
Load Shift
Frequency Regulation
Capacity Demand Response
Renewable Energy Support
Source: RMI
Johnson Controls, Inc. —7
Markets for Energy Storage
HawaiiDriven by Demand
Charges, solar PV
integration as well
as Federal and
State tax credits –
when integrated with
Solar PV
California
Driven by Demand
Charges, solar PV
integration, State
incentives and Federal
Tax credits – when
integrated with Solar
PV
Puerto Rico
Driven by Solar
Firming requirements,
Demand Charges and
Federal Tax credits –
when integrated with
Solar PV
PJM ISO
Driven by
Frequency
Regulation
Market
Johnson Controls, Inc. —8
Project Development Process
Understand Customer’s Drivers
• Resiliency, Sustainability, Financial Metrics
• Preliminary Analysis
• Reduce Energy footprint, optimize
generation/storage
• Run economic models
• Optimize new equipment installation
• Customer Review
• Detailed Analysis & Design
• Develop Bid Package and Quotes
• Understand interconnection process, cost
and schedule impact
Isle Royale Remote Microgrid
Johnson Controls, Inc. —9
Observations
Microgrids don’t typically pay for
themselves
• Checkpoints with customer along
development cycle to ensure
alignment
• Sometimes moved to next phase of
project
Development process still evolving
• Utility interface
• Learning to work with other
providers
Energy Efficiency isn’t usually included
Contracting Process
• T’s and C’s
Service Providers - Engineering
Services, Communication, Power
System Automation
Typical Backup generation ready for
integration – renewable energy firms
not as much
Energy Storage
• Significant pricing declines
expected
• Alternative technology applications
Johnson Controls, Inc. —10
Financing
Public/Institutional/University/Commercial/Industrial
Customer Budget for the investment in Resiliency
• Additional Debt
• Make other budget choices
Performance Contract – ESCO
Off Balance Sheet – Power Purchase Agreement
Department of Defense
Drivers for Sustainability, Renewable Energy and Energy
Security
• Enhanced Use Lease