Project 2.1 Cost-benefits framework – S econdary Benefits and Ancillary Services

www.smart-microgrid.ca

Project 2.1Cost-benefits framework –Secondary Benefits and Ancillary ServicesDr. Géza JoósStudent: Greg MorrisMcGill University


Introduction• Project provides a framework for

comparing the costs and benefits of Smart Microgrids.

• Microgrid brings new functionality to a distribution network.– This has many potential benefits...– But it also has costs.

• Who does the Microgrid benefit and by how much?

• Need to know this to build business cases and get buy-in from all affected parties.


2011 •Direct benefits framework

2012

•Quantification methodology

2013 •Ancillary svcs. framework

2014 •Optimization of benefits

2015

•Application of methodology


Canmet

Energy-

NRCan

Hydro One

BC Hydro


Impacts vs. Benefits• Impacts– The system changes that result from the

Microgrid.– Can range from technical to economic to

social or environmental.• Benefits– The economic gain that results from

impacts.– Much more limited in scope than impacts.

• Distinction gives clarity and allows a modular approach.– Additional considerations can be easily

included.


StakeholdersAll entities affected by the Microgrid,

including:• Microgrid Developer or IPP• Microgrid Customers (μGCs)• Grid Customers outside Microgrid

(GCs)• Distribution Network Operator (DNO)• Utilities or Bulk Energy Suppliers

(BESs)• Society


Traditional View of Benefits• Technical– Increased power quality and reliability

(PQR)– Reduction in losses– Efficiency improvements

• Economic– Optimization of resources– Provision of ancillary services

• Environmental/Social– Emissions reductions– Creation of employment?– Reduced reliance on depleting resources?


A Different Perspective• μGCs benefit from energy cost

reductions and PQR improvements.• GCs benefit from PQR improvements.• IPPs benefit from sales profits incl.

ancillary services.• DNOs benefit from reduced O&M,

reduced energy costs, and reduced PQR costs.

• BESs may benefit from reduced O&M.• Society benefits from positive

externalities, e.g. reduced emissions.


Benefit Functions• Map from one set to another set like

mathematical functions.• Map Microgrid impacts onto

Stakeholder benefits.• E.g.– Reduced Electricity Purchased Cost– Investment Deferral– Reduced Emissions– Ancillary Services Provision– Reliability Improvement


Impacts• The changes that are

expected to result from the Microgrid.

• Some must be known a priori, called “known impacts”.

• Some must be calculated or simulated, “discovered impacts”.


An Overview of the Framework


Ongoing and Future Work

• Comparison methodology is nearing completion.

• Ancillary service valuation is in the early stages.

• Collecting data for case studies.– Ideally based on Canadian Microgrids.


Thank you!

For further information contact [email protected]

.ca

Project 2.1 Cost-benefits framework – S econdary Benefits and Ancillary Services

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