Our Insights

Understanding Efficient Microgrid Solutions

May 26, 2020

By Ray Arguello PMP, LEED AP BD+C, ENV SP
Federal Program Manager, Indo-Pacific Theater

How do you meet energy resiliency requirements when funding for a microgrid solution seems out of reach? How do you know what size microgrid meets your facility’s requirements? Do you need an expensive and complicated solution that combines solar, landfill gas, diesel, natural gas and thermal energy storage?

Probably not. Microgrid solutions are not and should not take a one-size-fits-all approach. The challenge is balancing the impact of a potential loss of power and the resulting loss of your critical mission with the cost of resiliency. This approach makes reaching those resiliency requirements possible through flexible and innovative engineering that helps you find the right solution, not just a solution.

Simple vs. Complicated Microgrids

When it comes to energy resiliency, it may be tempting to investigate microgrid options that provide the maximum amount of coverage to your existing infrastructure. In a moment of crisis, why wouldn’t you want to try and provide power to as many systems as you can just in case it turns out to be needed?

This line of thinking might seem natural, but it might turn costly. Microgrids come in all shapes and sizes, from one simple generator to systems with multiple generators, solar PV, Battery Energy Storage (BESS) and control systems. When looking at government facilities, some microgrid designs have numerous fail-safes built in – stand-by generators for critical systems, uninterruptable power supplies (UPS), and back-up data centers, for mission-critical nodes. On paper, the design may be failsafe. In practice, your budget may not be able to procure the microgrid that you envision.

Many of us would love to have a Mercedes, but what can you afford? Having all the features of a Mercedes may be great for quality of life, but at its core, the purpose of an automobile is to get you from Point A to Point B. In microgrids, you won’t know your real mission-critical needs until the power goes out.

Instead of the simple answer of classifying your entire facility as critical, reassess your facility with an eye toward efficiency. In the end, what are truly the most essential elements for your mission to succeed? What will the costs be if specific parts of the facility go dark at an important moment?

When this important piece of information is decided upon, your microgrid design’s needs will be illuminated. Most likely, you will find that the best solution to power these critical points will be a simpler, more direct and less expensive option. When it comes to microgrids, bigger isn’t necessarily better.  Between two high-quality solutions with different levels of complexity, the “better” design is the one that efficiently fulfills the minimum requirements to successfully power essential processes.

Energy Resilience Readiness Exercises

Microgrids have a multitude of applications. But what’s right for you? What’s your critical load?

The importance of completing an Energy Resilience Readiness Exercise, an Office of the Secretary of Defense-sponsored resiliency test, can help us understand how to leverage existing assets and experience and to make only the changes that are necessary to get the solution you need with the best payback. These kinds of exercises vary in format, although the intent is ultimately the same for each as they venture to determine critical elements for given systems.

In these exercises, several elements may come under review:

Using the planned exercises, you can determine what is mission-critical and what is secondary – and you can begin to plan needed upgrades or modifications that will allow your system greater resiliency without breaking the bank.

How Resiliency Starts with Your Electrical Infrastructure

Next, you’ll need to take a close look at the current condition of the facility’s existing power infrastructure. How old is it? What is the condition and system architecture? Many of your resiliency issues can stem from an unreliable electrical distribution system at your facility, and those issues can’t be resolved by adding a new DER and battery storage solution.  Don’t forget that all of the new “smart control devices” need to communicate over fiber optic networks.  This can be a significant cost in the new age of cybersecurity.

When answering these questions, there are two major considerations: money and time. What kind of budget do you have to work with? Even if you have the money to immediately pay for what your distribution system needs, does your facility have time to begin completing those upgrades? What can you do today that will have a positive impact on your system sooner rather than later?

As you go over what your facility needs, keep in mind the time it might take to improve your system. In some cases, the upgrades should not be kept waiting, especially if it concerns mission-critical infrastructure. In other cases, such as delivering power to non-essential areas, there may not be as great an urgency to immediately fund the needed work.

Understanding Third-Party Financing Options

Ultimately, the most critical factor to consider is the cost of an outage at your mission-critical facilities. Knowing this will help to determine how quickly a well-designed microgrid can pay for itself.

Since the Department of Defense has not placed a cost per kW for resiliency, the projects must be funded through DOD sources or be funded through third-party financing. DOD funding is based upon the critical need for projects to build and replace electrical systems. Third-party funding can be used to improve the resiliency of your facility, but it must make economic sense for the developer and your facility. Private utilities have the capability of making improvements to infrastructure on the base because they’ll reduce the amount of energy needed. The additional savings go to pay the utility to pay off the costs.

Check with the Navy Acquisition Modernization Office (AMO), Army Office of Energy Initiatives (OEI), Air Force Office of Energy Assurance (OEA) or the Department of Energy (DOE) qualified list of Energy Service Companies (ESCO) for additional third-party funding options.

Mr. Arguello is the NAVFAC Pacific program manager for POWER Engineers, a nationally ranked engineering firm focused on energy. Over his 40-year career, Mr. Arguello has managed dozens of electrical engineering projects including the interconnection of renewable energy projects to the utility grid. He was the project manager for an interconnect study for the 11 MW solar farm recently commissioned at Joint Base Pearl Harbor-Hickam as well as several electrical studies for NAVFAC Hawaii, NAVFAC Pacific and the US Army Corps of Engineers. Mr. Arguello is currently the program manager for POWER’s $38 million design and engineering ID/IQ with NAVFAC Pacific. He has managed electrical infrastructure design projects all over the globe, including Diego Garcia, Kwajalein, Guam, Australia, the Middle East, Africa and the Marshall Islands. Mr. Arguello is a retired Navy Commander and was the Commanding Officer of the USS Benjamin Stoddert (DDG-22) in Pearl Harbor, Hawaii.