Sandia's Menicucci Talks About DG for Energy Surety

The pundits are speculating. The late night talk show hosts are relentless. Congressional hearings have begun. August 14th is now part of our collective vernacular. What went wrong? How can we ensure it won’t happen again? How can we provide for greater energy surety?

“If you want energy surety, you must understand what reliability is,” said David Menicucci, Sandia National Laboratories. “You need to determine what your particular need for reliability is, and how important it is to you. The electric grid, our electric distribution system, is unreliable for many applications. August 14th proved that,” he said.

“The average level of reliability for our current grid is around 99.95%, in which the average amount of down time could be expected to be around 4.5 hours per year. This is called ‘3½ nines of reliability.’ This may be tolerable for homes, but very unacceptable for many businesses. For example, hospitals, airports and some military functions may need four or five nines of reliability. Communication systems that depend on advanced integrated circuits may need many more nines of reliability, up to eight or nine nines, with average downtime measured in small fractions of seconds. The electric industry isn’t the only one that depends on reliability,” said Menicucci.

The IT industry regards 99.999% --the fabled five nines--as the highest number realistically achievable. Five nines equates to less than five minutes downtime per year. Five-nines, of course, is the benchmark 99.999-percent availability figure for which the public switched telephone network (PSTN) and traditional PBXs are renowned. It is often used as a shorthand for the ultimate in rigorous engineering and performance requirement for telecom equipment.

Since the grid is only about 99.95% reliable, what can businesses and industry do to improve their reliability? “The traditional approach is to use backup generators,” said Menicucci. “These systems, usually diesel generators, operate only when the grid fails. However, diesel is somewhere between 60-85% reliable. I heard an unconfirmed report that in New York during the August 14th Blackout, 46% of the diesel generator backups didn’t come on line or did not stay on line. The main problem with these machines is the battery, which is used for starting, just like your automobile. Many failures occur on startup. Once the machine is running, however, there is a good chance it will stay running,” he said.

So how do you deal with reliability problems of backup generators when you have specific reliability needs that may be measured in five or six nines? “One way is to install backup generators for the backup generators. For example, in operation with the grid, one backup generator will add around a half and one full nine of reliability,” said Menicucci.

Another approach is to use full-time operating distributed generators like microturbines or PV, each of which has an expected level of reliability. “In the case of microturbines or fuel cells, which burn clean fossil fuels, they could have relatively high levels of reliability, such as 98%. These generators would also generate revenue because they are connected to the grid. Then, if the grid goes down, these systems and their associated loads would isolate themselves from the grid and continue to operate within a stand-alone configuration. This isolated part of the grid that resides within the surety zone is often called a microgrid. These full-time DG units within this microgrid are potentially more reliable than backup generators. One of these full-time operating DG units may produce as much reliability as two backup generators for a given load,” he said.

Consider the economics. “After examining the fuel and electricity price in your region, you may conclude that it makes more sense to use diesel backup, but realize that to achieve a desired level of reliability, you may need two or three diesel backup generators,” said Menicucci.

Three diesel generator backups? So critical operations, like hospitals, medical centers, fire and EMS stations, might need two or three diesel generator backups each?

“Let’s say you have a hospital, a large medical center, and related buildings you’re considering, all with surety requirements of 99.9995,” said Menicucci. “You can put in three diesel generator backups, where each one of those could supply the total load. In order to achieve the five –and-one-half nines of reliability, you must put in three times as much backup generation. Or, you could use fulltime DG coupled to the grid, which, incidentally, creates revenue for you because you’re operating it full time. But if you live in an area where you have cheap electricity, then fulltime DG may still too expensive. This is where it would be cost effective to put in two or three diesel generator backup systems,” he said.

Using DG as full-time power? Using the grid as backup?

“Absolutely,” said Menicucci. “If you use DG that operates full time, instead of relying on backup generation that operates when you have an outage, you could conceivably have even greater reliability—you could add another 9 for reliability. The energy surety zone operates on the premise that you don’t use backup generation anymore. Instead, you’re running DG technologies full time and the grid becomes the backup,” he said.

I’m not sure I know the difference between reliability and availability. If availability equals the total amount of time a product was “up,” and if reliability means the number of instances in which the product “went down,” then you can have one big outage, and the grid will reflect high reliability, but low availability, right? Or you could have two dozen outages of five seconds or less, and the grid could be accurately described as being highly available, but unreliable, also right?

“Well, it depends on what industry you’re talking about. Availability and reliability are more or less interchangeable. In some industries, like IC manufacturing, down time is very expensive, no matter how it is distributed through the year. In others, it might make a difference. In any case, what most of these load managers have to plan for is the reasonable worst case, which is an extended downtime that could tax backups,” said Menicucci.

Menicucci believes that the reliability side of this issue has largely gone unnoticed. “We tend to look at things from a security point of view,” said Menicucci. “Obviously, with those numbers of grid reliability, you’re going to have downtime. Downtime in the electric business is not only annoying, it’s immensely expensive,” he said.

Menicucci has developed the Energy Surety Methodology (ESM) that allows one to assess the required surety needs and to identify a reasonable, cost effective approach to meet that need. This may include gas-fired CHP for the most cost-effective reliability for a particular load. “It may include wind, PV, biomass, fuel cells—a suite of appropriate technologies that would provide options for achieving the same level of reliability to which we’ve become accustomed,” said Menicucci.

“This is a very different concept—it’s a new way of looking at where renewables fit into the range of technologies to achieve energy surety. But you must quantify reliability. What level of surety do you want? What kinds of technologies will meet that need? What are the economics? All of these are critical factors. And DG will play a big role here, no doubt about that. However, one thing is for sure: renewables like solar, which are intermittent producers, can’t do it alone. But paired with fuel cells or microtubrines, wind or PV and storage is likely to fit in quite well,” said Menicucci.

So how does the ESM work? How can a community try it on and see if it’s a fit?

“ESM is an overall approach to determine surety needs and the optimal set of matching technologies based on economic analyses,” said Menicucci. “It starts with a vulnerability assessment. Conveniently, most communities (all but the tiniest) did these for Y2K, so they already have a good baseline of information that is no older than three years, so it’s adequate for the vulnerability assessment.

You begin with the question, ‘what are your critical assets and what are your reliability requirements for them?’ Using ESM, communities identify areas (or zones) that contain facilities containing critical loads. Once a community knows this, then it can identify the right mix of distributed technologies to meet their desired level of reliability and surety. Often, this will include backup generation as one of the options. These options are then compared economically given the local conditions,” he said. They may conclude backup generation wins, hands down. It still may be most economically viable option for a community. It’s definitely a more complete picture,” he said.

So can we, as a voracious energy consuming and reliability-demanding public, look at DG in a totally different way? Are we able to break old habits of behavior and thinking? Could this be the answer to shoring up our energy surety?

“For the longest time, people were focused only on the economics of DG,” said Menicucci. “This is a tough sell, for DG often has a hard time competing with central generation. But this idea introduces externalities. Today, talking about reliability is important, but pre-August 14th, it simply wasn’t part of the conversation, or certainly wasn’t part of most people’s reality. Truthfully, this isn’t a new concept for Sandia, but it is a new concept for lots of folks. The Department of Defense is especially keen on this concept because they have the utmost of reliability concerns—a reliable source of energy for bases so that they can project military power when required. A similar situation exists with communities. The City of Tucson, through Valerie Rauluk, is also very interested in making this work for Tucson. A community like Tucson, while not completely like a military base, still has critical assets to protect, like fire and EMS stations, hospitals, water treatment plants. Really, all communities have the same critical assets to consider and protect,” he said.

I like this new way of thinking about DG and how it might reverberate with communities. But I live in Texas, a state with no incentives or rebates but plenty of low electricity prices and, like the rest of the country, rising gas prices. What are our chances to consider DG as full-time power? “Well, the worst situation for DG is where the electricity price is low and the gas and other fuel prices are high,” said Menicucci. “Of course, if that’s the scenario, then diesel backup generation is best way to go,” he said. How did I know he’d say that?

“Still, it’s important to remember that backup generation is a negative cash flow from day one. This means is that it never generates any positive revenue. However, it doesn’t consume much fuel either because it only operates during tests and outages. The cash flow of operating DG full time may be even more negative than backup generation in a situation where the value of the energy generated by the DG is significantly less than what could be purchased on the grid. To make the best economic decision, we compute the net present value of the annual cash flows from each option. Sometimes you may end up selecting the option that has the least negative net present value.”

“At Sandia, we’re developing the concept of distributed intelligence for a microgrid,” said Menicucci. “The microgrid is an important part of the surety zone because it has to recognize when the grid is gone, then isolate the loads within the surety zone, and insure that the DG devices continue to produce power—all in within a dozen or so milliseconds. And it has to be done seamlessly without affecting the loads. Obviously, controls are very important. The traditional approach to controls is a hierarchy in which a central controller manages all of the activities. At Sandia, we are developing the concept of distributing intelligence throughout DG technologies in a microgrid. It is a methodology in which the different generators can communicate with each other. In this configuration, each generator within the surety zone might have some level of intelligence and would communicate with its co-generators. Collectively they should be able to decide which generators should be on line and how much they should be producing depending on ambient conditions—in short, they would decide the optimal way to operate these DG technologies within the microgrid.

“A typical real-time problem would be to ramp up a fuel cell and ramp down the PV because of an impending storm. The advantage of this is that the intelligence is distributed within the surety zone so that if one of the generators and its controls are lost, the others can continue to operate in an optimal manner. So the overall surety of the controls is also improved over a single control. The concept of distributing intelligence throughout DG technologies in a microgrid is thinking about how the different technologies operate so they can ‘talk’ to each other. We should be able to know which generators should be on line, how much they should be producing, what’s weather dependent, what’s coming—in short, what’s the best way for us to operate these DG technologies, given the conditions. Do we ramp up the fuel cell while we ramp down the PV because of an impending storm? This is how we’ll begin to make the technologies work in the best and most appropriate condition.”

“The collective reality of August 14th is that we’re part of an unreliable grid that will remain that way, as long as we’re hooked on central generation,” said Menicucci. “Energy security and surety, formerly the domain of energy planners and utilities, is now a national concern and conversation, being discussed at the local level. We’re all part of the solution,” he said.

I believe that adversity can lead to unexpected possbilities. Greater awareness of the vulnerability of our transmission system is, interestingly, a good thing because it offers communities an exquisite opportunity to become educated and involved, taking greater control of their future.

Not surprisingly, Dave's been a little more busy than usual since August 14th with the issue of energy surety. He's been kind enough to share a recent presentation he developed post August 14th, along with his synopsis of the 2003 Electrical Blackout. You can download it below:

If you'd like to know more about Sandia and energy surety, you can reach David at 505.844.3077.

Thanks, David, for your time on this issue.