IEEE Power & Energy Magazine - July/August 2017 - 85

resiliency/reliability as evidenced by the recent notice of
proposed rulemaking issued by the Federal Energy Regulatory Commission to RTOs and ISOs to revise tariffs to support participation of electric storage resources and DER
aggregations in the capacity, energy, and AS markets.
Layer 4 provides the functionality needed for integration of
the behind-the-meter resources with utility grid operations
and energy markets.

considering their environmental impact or a combination of
cost and environmental impact.

Microgrid Local Operation

Utility Program Optimization

A microgrid can be seen to operate as an extension of the
utility grid. Power flows from the utility and is optionally
consumed by the end user. If, however, the utility experiences energy interruptions for whatever reason, the microgrid
seamlessly disconnects from the grid and self-supplies all of
its needs according to the established performance objectives.
Once the microgrid senses the utility grid is stable again, it
can seamlessly reconnect to the utility and continue.
Another major feature of a microgrid, such as the South
Campus, is its ability to rely on a CHP system to recycle the
hot exhaust gas output of the microturbine, extracting the thermal energy and generating the entire cooling energy for the data
center and supplying the building hot water requirements. The
CHP system results in a substantial increase in efficiency of electricity delivery from production to consumption and reduces the
overall operating costs while benefiting the environment. The
CHP system water and gas temperatures and set points are under
the control of the South Campus building management system
that constantly monitors and controls the heat and the process of
energy conversion.

In this strategy, a microgrid can expose itself as a resource
in a utility program, such as DR. The microgrid can act as a
virtual power plant (VPP) and respond to control signals for
changing its generation within maximum and minimum limits. Once the program is called by the utility, the microgrid
must fulfill the required amount of generation change.

South Campus Optimization Strategies
The hallmark of an advanced microgrid is its ability to be
assigned and carry out optimization strategies. These optimization strategies will utilize the available resources-
generation and load-to achieve a variety of operational objectives. Operational objectives are assigned by the microgrid
owner, and optimization strategies are then defined and carried out by the layer 3 master controller. These optimization
strategies often expose the microgrid resources to participate
in energy markets and transactive opportunities, carried out by
layer 4 controls.
To create a transactive microgrid, a layer 3 master controller coupled with a layer 4 transactive enabling solution
had to be developed. There are a number of optimization
strategies that can be implemented at the South Campus
microgrid to achieve operational objectives.

Resource Optimization:
Cost and Environmental Impact
In this optimization strategy, resources are scheduled and
dispatched to minimize the operation cost of a microgrid.
The resources optimized include microturbines and solar,
wind, and storage systems as well as purchases from the
utility and dispatchable loads. Resources can be optimized
july/august 2017

Resource and CHP Optimization
The South Campus has a CHP facility, which uses the thermal energy of the exhaust gas for heating and/or cooling purposes. The master controller optimizes the CHP plant in a
variety of ways to maximize system efficiency.

Electricity Market Participation
In this optimization strategy, the microgrid exposes itself
as a VPP, participating in an electricity market by offering energy, ASs, or both, within the maximum and minimum VPP operating limits. The external entity (market
operator) will call on the energy and ASs required, and the
microgrid will respond appropriately. The AS may include
conventional reserves (regulation, spinning reserve, and
nonspinning/supplemental reserves) and emerging grid services [such as flexible ramping/load following and primary
frequency response (PFR)].

Microgrid Value Creation
Microgrids can create a stream of benefits to different beneficiaries, including microgrid native customers, the DSO,
bulk power/market operations, and society at large. Generally, microgrids provide four key operational benefits, both
to their native customers and other external systems:
✔ reliability: provide a highly available electric supply
✔ resiliency: absorb and recover rapidly from disruptive
events
✔ efficiency: optimize economic benefits
✔ environmental impact: minimize environmental impacts.
Microgrids provide reliability and resiliency to their native
customers, reducing service interruptions by providing
access to additional sources of supply for electricity and restoration. This contribution needs to be evaluated using longterm system performance data. The impact on resiliency and
reliability can be monetized by calculating the cost or the
value of the reduction in unserved energy.
Microgrids also provide economic and environmental benefits through real-time monitoring, optimization, control, and
scheduling. The economic benefits include cost minimization
and/or revenue maximization, depending on the relative cost of
generation from microgrid assets compared to the purchase cost
from the local utility or the market. This benefit can be monetized as a function of microgrid production costs compared
to the local utility rate structure and prevailing market prices.
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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - July/August 2017