New Jersey issues Microgrid Report analyzing regulatory, technical and financial aspects of microgrid development

The New Jersey Board of Public Utilities has released a “Microgrid Report”* with the objective to provide data and technical analysis to the Board and provide Staff’s response for emergency operations (black sky conditions) in response to Superstorm Sandy and other major grid outages. In addition, the report also provides a general technical analysis for operating a microgrid with multiple customers under normal conditions (blue sky conditions) for 24/7 operations. This analysis includes an assessment of the benefits and costs for operating a microgrid with multiple customers under blue sky conditions for 24/7 operations. The report also lists, reviews and analyzes the regulatory, technical and financial barriers that would need to be addressed to develop a statewide policy for a DER microgrid for multiple customers. This is called an advanced town center microgrid or TCDER microgrid.

*The Report was prepared by The New Jersey Board of Public Utilities Staff and does not necessarily represent the views of the New Jersey Board of Public Utilities, its Commissioners, or the State of New Jersey. This Report is provided for informational purposes only and does not provide a legal interpretation of any New Jersey Statutes related to microgrid operations.

Click illustration to download the report.

Click illustration to download the report.

The report examines the following key questions:

  • Can the advanced microgrid operate in a manner that provides more resiliency for the state or local government and critical facilities than the current central generator, transmission and distribution grid system?
  • Can the advanced microgrid operate in a manner that provides additional reliability to the current local distribution grid system?
  • Can the advanced microgrid operate more efficiently than the current central generator, transmission and distribution grid system, saving the microgrid customers, owners and/or operators energy costs?
  • Can the advanced microgrid operate in a more environmentally effective manner lowering air emissions, water usage, wastewater discharges, waste generation and land use impacts than the current central generator, transmission and distribution grid system?
  • Can the advanced microgrid provide benefits to the distribution grid overall?
  • What benefits does the distribution grid supply to the advanced microgrid?
  • What are the costs that the advanced microgrid imposes on the distribution grid?
  • What are the costs that the distribution grid imposes on the advanced microgrid?

The following is a summary of each section of the report:

Section 1. Background:
The general impact of major weather events, including a summary of the overall economic impact, a summary of the State’s Hazard Mitigation Plan in regard to alternate energy and the state/local government FEMA recovery requests for back – up generators, and the history of electric system outages and the probability of future storm related outages.

Section 2. General Definition and Classification of a Microgrid:
The generally accepted definition of microgrids and microgrid classifications, the types of distributed energy resource (DER) technologies that can operate within a microgrid, their general benefits including resiliency and the cost ranges of DER microgrid technologies.

Section 3. BPU Definitions related to Microgrids:
New Jersey’s relevant Public Utility Statutes are provided and the statute’s relationship to the general microgrid definitions and classifications and other regulations, codes and policies that relate to advanced microgrids.

Section 4. Microgrid Energy Manager:
The energy management functions within the distribution and transmission grid system and the advanced microgrid.

Section 5. Microgrid Activities in Other States:
The current and projected DER cost trends that are impacting microgrid development, the current status of microgrid development in some key states, and including a list of national and international microgrid projects.

Section 6. New Jersey’s Current DER and Microgrid Capacity:
The current microgrid development in New Jersey and a summary of the New Jersey Town Center microgrid market potential analysis.

Section 7. EDC Smart Grid and Distribution Automation Plans:
Defines and describes Distribution Automation and Smart Grid systems. This section summarizes national and New Jersey distribution automation and smart grids pilots and programs as well as the general cost and benefits of smart grids, and the status of distribution automation and smart grid development in New Jersey and other states.

Section 8. BPU Microgrid Stakeholder Meetings / Policy Issues:
Summarizes the discussions from the individual BPU microgrid meetings between the NJBPU, the microgrid developers, electric and gas distribution companies, Rate Counsel, and microgrid market sector customer associations. This section addresses staff’s response to a comment set forth in the Board’s September 27, 2014 Order – The New Jersey Energy Resilience Bank (NJERB) – Initial Program Guide and Budget Extension Docket No 0014060626, and The New Jersey Energy Resilience Bank – Water and Wastewater Treatment Facilities Financial Products Docket No. 0014091018 ERB. This comment was submitted based on the draft NJERB Program Guide and Wastewater and Water Treatment Facilities Financial Products presented at BPU/EDA August 27, 2014.

Section 9. Next Steps:
Staff’s recommendations to the Board based on the analysis of the available data and reports related to the comment and response. This section of the report is staff’s recommendations related to developing advanced or Town Center DER (TCDER) microgrid policies. This section was developed based on an evaluation of the current microgrid data and information and on discussions with stakeholders at four advanced microgrid meetings.

About IDEA Industry News

EDITOR: Leonard Phillips, IDEA Director of Business Development, International District Energy Association (IDEA), a nonprofit association founded in 1909. len.idea@districtenergy.org; +1 508-366-9339.
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