Unlocking the microgrid for data centers


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Strong analysis of the virtues of a microgrid, particularly as they apply to data centers.

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Unlocking the microgrid for data centers

  1. 1. Unlocking MicrogridsTaming the Beast: Microgrid Strategies for Effective Cost Management of your Electrical Infrastructure Raj Chudgar, Principal SunGard Global Services Kevin Meagher, CTO Power Analytics Corporation May 2011 The proliferation of Smart Grid technologies, upgrades to the communication grid, and cheaper distributed generation offer significant commercial and reliability advantages to an optimized electrical infrastructure solution in a micro setting.
  2. 2. In 2010, then EDSA Corporation, now increased revenue margins are dependentPower Analytics Corporation, presented a on effective operating cost containment,white paper at the Uptime Symposium leveraging of resources, optimization ofentitled “The Enterprise Data Center as a infrastructure, and uncompromised reliabilityMicrogrid.” That paper outlined the of their mission critical electrical network.strategic imperatives that, when combined, For many organizations, power is themake the enterprise class data center very largest operational expense, yet remainswell suited to take a leading role in the the least managed commodity - even withevolving microgrid market as part of a significant upgrades in software solutions,holistic approach to energy management physical infrastructure, and the addition ofand transforming energy demand into a distributed generation. Enterprise-widemanaged asset. In this paper, we take the power savings of just a few percentagesnext step by laying out a generic technology can deliver millions to the bottom line.roadmap for development of an operationalMicrogrid. And perhaps just as important, a Today’s digital world provides operatorsreview of basic elements of an overall with technology solutions that deliverenergy and related services management competitive value. Unfortunately, manyplan. In many ways, the microgrid concept times the cost of this competitive edge, theis simply a logical end to a macro energy sexiest new thing, increases energyroadmap. consumption with potentially significant negative impact on total cost of ownership Unlocking Microgrids (TCO). Often times, companies only Taming the Beast: Microgrid Strategies recognize the increased TCO for their ―sexy for Effective Cost Management of your solution‖ after the fact, and after the Electrical Infrastructure investment. The ProblemThe increased energy demands of IT Basic Elements of an Energyhardware and mission critical facility Management Planinfrastructures continue to drive utility costs Energy Serviceshigher and higher - and there is no end insight. The most critical first step in managing yourAstute companies are looking for energy costs is to understand your powercompetitive advantages and recognize that usage. The more you know, the betterRaj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 1
  3. 3. prepared you are to develop effective Energy Expertsstrategies to reduce energy costs. In many The ability to manage energy, implementways energy services are very well new strategies, evaluate existing strategiesunderstood, in other cases improved insight and appropriate activities are not dependentinto your power network and management on the data center management. A growingof your energy contracts represent a infrastructure may benefit from professionalsignificant opportunity to reduce costs. consulting and advisory services, freeing• Determine if you are purchasing power the organization from the need to become at the lowest unit cost energy market experts. In many cases,• Negotiate rate adjustments and these expert resources are already well accurately audit utility bills with known to the data center operations and confidence with historically accurate executive management and this service is a knowledge of system performance and logical extension to the expertise and capability support they have already been providing.• Proactively manage power bills by Organizations such as SunGard, Accenture, simulating power network configuration HP, IBM, Booze Allen Hamilton are just changes to determine cost of power some of the many energy experts capable effect of providing this counsel.• Proactively manage power network with intelligent infrastructure maintenance In addition to the economics driving energy• Develop a comprehensive energy decisions, carbon reduction mandates, and strategy the desire to be good corporate citizens are• Implement new forms of energy driving conscientious enterprises to look for generation and storage that contribute ways to implement ―green‖ solutions. The both to the data center overall load concept of renewable distributed energy needs as required and are available for generation (solar, wind, etc.) and electric bulk grid market applications vehicle services are enticing, However, among the issues of how to optimize and• Provide an energy road map for green integrate these renewable energy sources, alternatives such as photo voltaic, fuel reliability becomes even more important. cells and wind.Raj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 2
  4. 4. Just imagine an enterprise class data center generation and to optimize the use ofor university campus with numerous energy both for the facility and as an energybuildings, several generation sources, and market instrument.multiple building automation systems. Now For the purposes of this paper, our workingconsider adding in electric vehicle charging definition of a Microgrid is even morestations, a solar farm, micro-windmills, and specific for a data center. This type ofenergy efficient HVAC and water units. Microgrid has as itsImplementing these new energy efficiency primary mission high Characteristicssolutions without understanding and of a Data Center availability - under nooptimizing the power network could result in Microgrid: circumstance canpremature power equipment burn outs,  Critical power availability or quality availabilitysignificant loss of commercial revenue, and  High reliability of power be at risk.  7x24x365an unreliable substructure of the campus With this qualifier, performancegrid. Is there a way to integrate, optimize  On-site generation the data centerand manage such a scenario? Microgrid takes advantage of the inherent robust electrical The Microgrid Opportunity infrastructure to optimize and manageWith the proliferation of Smart Grid energy.technologies, including Advanced Meter(AMI) technology, upgrades to the More than supply sidecommunication grid, electric vehicles, and In the United States, Microgrids not onlycheaper and cheaper distributed generation, benefit the supply side, but also helpthe reality of optimized and reliable manage demand and ensure reliability ofelectrical infrastructure solutions in a micro grid functions in real time through demandsetting offers significant commercial and response (DR) and other load shifting, loadreliability advantages. optimization, load shedding, and load cyclingThere are currently many definitions about approaches. To date many Microgridwhat constitutes a Microgrid, but one thing solutions are limited to large implementations,they all have in common is the inclusion of and to only using manual or semi-automatedon-site generation. A strong argument can processes for obtaining minor capacity creditbe made for inclusion of energy storage from structured markets and/or minorboth to manage the intermittency of changes to rate structures.Raj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 3
  5. 5. Even with the billions of dollars spent on Without any large-scale fundamentalSmart Grid and energy efficiency infrastructure upgrades, Microgrids caninfrastructure and software solutions, many stretch utility supplies and secure customercompanies have been unable to fully realize reliability using existing utility DR programs -the commercial value, reliability, or - delivering greater value to the Microgridunderstanding of their energy consumption. owner, while also creating benefits to theBecause of this, many companies are only host distribution utility and transmission gridtaking advantage of the limited value of their operator.investment. A key benefit of a Microgrid isthe ability to provide additional energy,capacity, and ancillary services to theenergy markets, resulting in commercializedvalue to the Microgrid owner.Another Microgrid advantage particularlyrelevant to the mission critical data centeroperator is the ability to react quickly tochanging utility reliability conditions. Microgrid Dashboard from University of California at San DiegoCurrently, the Microgrid’s universe Microgrid solutions are defined as a subsetspecifically pertaining to reliability can be of load and generation equipment anddivided into three distinct segments: (1) software systems that traditionally reside onlarge industrial and commercial demand the customer side of the meter. Equipmentresponse, the largest commercial segment can include any number of electrical gridin the U.S., primarily manifested as load structures for load optimization, generationshedding or load curtailment; (2) supply- optimization, environmental credits,side, as in back up generation or battery conservation programs, HVACs, pumps,storage; (3) mixed asset configurations heating systems, or any number of businessincluding the potential for a variety of initiatives that companies turn to maximizegeneration and loads. Ultimately, a Micro- commercial value, enable new sexiergrid should bring together distributed solutions, or create a ―greener‖ image.generation and load, providing energy, The promise of Microgrid software systemscapacity, ancillary services, and the ability or the ―enterprise‖ class Microgrid masterto assist with frequency control during controller is to efficiently manage anreliability events.Raj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 4
  6. 6. increasing diversity of electricity generation, Depending on the location and access toenergy storage, net metering, and demand markets, generation can include the types ofassets. virtual power plants associated with a campus. For example buildings can beThere are varying levels of energy energy storage when modeled correctly.management and optimization outlined inthe following sections. The levels outlined Energy Storageare generically correct, and reflect One of the greatest potentials here isincreasing effort, cost and return. The advanced battery energy storage (such asstarting point can vary based on strategic Lithium-Ion) external to the data center.and other objectives. With as little as .5Mw (half a megawatt) of available storage, energy markets allowEnergy Generation consumers to participate in both voltageThere are many variables that are part of stability and frequency stability markets. Inany decision to utilize on-site generation for addition, battery storage appears to the datamore than just emergency back-up power. center as a very high quality generationGenerally speaking however, this excess source, transparent to the rest of the facilitycapacity or generation is balanced against but available in the event of problems withthe absolute need for high availability. other generation assets. This strategyToday, energy generation resources are allows the operator to ―drop‖ out of marketmore than just traditional diesel generation. participation to use the battery energy for anGreen energy sources such as photo hour and then come back to the marketvoltaic, fuel cells and even wind are quickly when the energy is no longer needed forbecoming mainstays in mixed distributed local demand.generation strategies. Automated Demand Response (Auto DR) Active Demand Response programs are those where the customer adjusts their utility load when the regulatory body or independent system operator (ISO) manually sends out information due to reliability events. Traditionally Active Demand Response programs are not a Distributed generation Microgrid resource good response to reliability events due toRaj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 5
  7. 7. the manual operations and lack of real time solutions is that they provide products thatautomation design, monitoring, and can be leveraged into the market to addressforecasting capabilities. immediate reliability and commercial requirements.As Demand Response programs evolve andreliability events increase due to the Automated controls solution industry giants,proliferation of distributed generation and have entered this market as full-servicethe increasing demand of electric vehicles, providers, as have new IT-orientedorganizations will look to Automated competitors. These companies typicallyDemand Response (Auto DR) as a way to provide a suite of services including designmitigate external reliability threats. of control installations and telemetry, remote management of energy equipment,Automated Demand Response (Auto DR) is management of response to calls foran important Microgrid application that is demand reduction, and fulfillment ofalready established to some degree in the technical and administrative requirements,commercial and industrial markets. A fully such as monitoring and verification ofautomated solution that programmatically performance.shifts generation or load to address marketand reliability events, Auto DR is a tool that However, it should be stated that it is notco-optimizes local resources and load as currently possible to determine from marketwell as provides modeled output for and program records, the degree to whichcommercial decision making. It is becoming automated response systems—as opposedan important resource in several to occupant actions—actually controljurisdictions and markets when response building operations during demandtime is critical for reliability requirements, response events. Therefore traditionalincluding additional capacity and frequency demand response programs fall short oncontrol. their ability to reliably respond to real time market and reliability events.In an Auto DR solution, a customer, typicallysupported by automated controls and Indeed, the ability to participate in theseinformation technology solutions, installs markets is dependent on the ability to modelequipment that enables demand reduction the Microgrid, transport the data feeds, andin response to wholesale or reliability events monitor performance. If these capabilitiesor system reliability needs as signaled by a exist, then customer – and utility in turn –utility or ISO. The versatility of these are rewarded for demand reductionRaj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 6
  8. 8. performance in accordance with dispatch can also use the building itself as a source ofinstructions including energy, capacity, and thermal storage, for instance, by "pre-frequency response. cooling" the building in early morning hours to enable reduced energy consumption laterThe ultimate goal is to provide reliability and in the day at peak hours (Load Shifting).commercial based products to the energy However, many of these demand responseconsumer or energy producer without the solutions lack the capability to make realcustomer ever noticing a change to their time adjustments for reliability events due toconditions. the lack of telemetry, performance ofThe Need for Co-Optimization metering signals, security concerns, and/orLarger commercial and industrial customers any number of software solution issues.have increasingly deployed building energy In the near future, with the introduction ofmanagement systems or, indeed, industrial cutting edge secure software solutions andprocess management systems capable of advanced meters, these consumers will haveresponding to reliability event and/or real- the potential to combine and process energytime pricing demand response signals, and usage, on-site building generation, thermalalso capable of providing information and and electric storage, and even electricvalidated response data back to aggregators vehicle charging. They will be able to co-and market operators. More sophisticated optimize all resources against forecastbuilding management systems are even able weather conditions, basic usage demand,to manage on-site thermal storage. They market reliability information and energy andRaj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 7
  9. 9. capacity market prices, so as to minimize the Laying the Foundations for the Virtualimpact of reliability events and leverage Power Plantexcess capacity. Utility executives, policy makers, and regulators at the federal and state levelsOne of the keys to achieving Renewable mostly agree on the barriers to broaderPortfolio Standard (―RPS‖) mandates will be integration of auto demand-side solutionsthe use of demand response as a form of into grid operations and the complex nextsystem reserve, real-time dispatch, frequency steps necessary to overcome them. FERCcontrol, and other ancillary services. These has recently adopted a policy to payservices require a quick response (< 10 demand response solution providers on parseconds) and "certainty" in the response with generation providers. The followingprovided. Advanced solutions can provide points identify some key elements of acontinuous updating of what is available and policy and regulatory agenda to support thefactor the potential revenues and market development of Microgrids:events from ancillary service provisions intothe co-optimization.  Identify reliability event mechanisms to guide the development and deploymentAdditionally, these systems will need to be of demand resources wherever possiblemodeled down to the individual equipment to minimize reliability events.level, provide operators with ―what if‖  Develop consistent, long-term customercapabilities to factor in risk, and also provide incentive and technical assistancemonitoring of the equipment in real time to programs to support the development ofmitigate any real time deviations. key elements of the Microgrids.  Within jurisdictions, coordinate the marketing and operation of demand response with energy efficiency programs conducted by system operators, utilities, and government agencies.  Develop and disseminate frameworks for consistent inclusion of demand-side Microgrid Operator Dashboard showing resources in forecasts used for supply the power network planning.Raj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 8
  10. 10.  Development of standard reporting and management of the energy grid will change aggregation of data for utility and as distributed generation (solar, wind, regulatory consumption. geothermal) and storage technologies are implemented in Microgrid settings. Mixed Asset Value Proposition— Microgrids With this concept in mind, mixed assetThe future of demand response solutions – Microgrids, as they grow and attractproviding real time capabilities to solve customers, are uniquely positioned to takereliability events – are on the brink of advantage of reliability and commercialbecoming a reality. Significant advances in events with real time constraints andsoftware and telecom technology have provide organizations with more security ongreatly increased performance, modeling, grid management and long term stability.and data monitoring capabilities in a secure While there are a number of regulatory,communication mechanism. Opening up commercial, and political decisions thatMicrogrid customer classes to provide need to be made, the future of demanddemand response solutions for greater grid response utilizing mixed asset and Auto DRreliability and commercial value could be capabilities in a Microgrid setting address aused in capacity sparse, frequency number of growing issues in the electricdeviation, or any number of reliability and markets today.commercial event situations. This would be Summarya watershed event for our power grid. The The ability to optimize infrastructure, cost,greatest value of these solutions is the availability and energy demand are classicability for utilities to draw energy, capacity, examples of a complex economic optimization.and ancillary services from Microgridoperators without a significant effect on theend use customer. Future Outlook for Utilities and Their CustomersThe utility business model, functions, andrelationship with the customer change Microgrid Energy Management Dashboard withsignificantly when customer energy loads “What If” environment.are tied to customer resources. Further- This complexity is well worth the effort to resolvemore, the utility’s overall role in regard to because the stakes are so high.Raj Chudgar Kevin MeagherPrincipal, SunGard Global Services CTO, Power Analytics CorporationMay 2011 Page 9