Selex ES @ Innovation Lab 2014-Smart Energy Innovation- March, 14th

1. Innovation LAB 2014
Master MAINS
A.A. 2013/2014
BOZZA

2. Lab goals
To understand the present and future impact of microgrids, it ought to understand
the current regulatory, market and business structure of the power industry and
project with reasonable certainty its future. While we will not be able to predict
exactly how the future would look like, we must develop strategies that would allow
us to migrate from where we are today.
Starting from a generic Business models definition, this lab theme is aimed at
finding the more appealing and sustainable business model for the proposition of
microgrid.
– It will start with a complete assessment of the current Italian regulations
finding the more effective tools and models to address innovative project
with the Public Administration and private customers.
– Finally the resulting models might be “mapped” to the sponsor industries
solutions and might steer their strategy in successive roadmaps
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3. What is a microgrid
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A large number of microgrid definitions exist from industry, government, and academia. The closest to a U.S.
Government–approved microgrid definition is that developed by the Department of Energy (DOE) Microgrid
Exchange Group:
“A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical
boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and
disconnect from the grid to enable it to operate in both grid-connected and island-mode[*].”
We got three major messages delivered from this definition:
• Integration platform for supply-side (micro-generators) and demand-side resources (storage units and
(controllable) loads) located in the same local distribution grid.
• Capability of handling both normal state (grid-connected) and emergency state (islanded) operations
• Capability of handling conflicting interests of different stakeholders so as to arrive at a globally optimal
operation decision for all players involved
[*] Office of Electricity Deliver and Energy Reliability, Smart Grid R&D Program. 2011. DOE Microgrid Workshop Report, San
Diego, CA

4. EU extension of the NIST Model
for the microgrid
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5. Microgrid value chain
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HAN
Enterprise s/s Energy Market s/s
AMI s/s
Distribution Automation s/s
Field Force s/s
Electric system operation s/s
Distributed
Energy s/s
Industrial s/s E-mobility s/s Commercial s/s
BackboneBackhaulAN
Distribution DER Customer
MarketEnterpriseOperationStationFieldProcess

6. Microgrid Use Cases
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uc People & Organizations
Microgrid Operator
Overlay Grid Operator
Prosumer
Service Provider
DER Owner Consumer Storage Owner Retailer Aggregator System Operator
DSO Operator TSO Operator Retail Market Operator

7. Microgrid Use Cases
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iness UC
Microgrid Boundary
Sells balancing and
ancillary services
Provides island mode
Microgrid
Operator
(from
People &
Organizations)
Selling/Buying energy
Overlay Grid
Operator
(from
People &
Organizations)
Prosumer
(from
People &
Organizations)
uc C&M UC
Microgrid Boundary
Balancing supply and
demand
Storage Management
Autoconfiguration
Black Start
DER Owner
(from
People &
Organizations)
Microgrid
Operator
(from
People &
Organizations)
Service
Provider
(from
People &
Organizations)
Storage Owner
(from
People &
Organizations)
Consumer
(from
People &
Organizations)
Overlay Grid
Operator
(from
People &
Organizations)
Demand side
Management
Supply side
management
«include» «include»«include»

8. Benefits for the stakeholders
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Category Benefit Receiving Benefit
Economic
Reduced Energy Purchased Cost • Microgrid Owner,
• Microgrid Consumer
Technical
Reduced System Loading • Microgrid Owner,
• Microgrid Consumer,
• Overlay Grid Operator
Improved Reliability • Microgrid Consumer,
• Microgrid Owner,
• Overlay Grid Operator
Ancillary Service Provision • Microgrid Owner,
• Microgrid Consumer,
• Overlay Grid Operator
Social
Reduced Pollutant Emissions • Microgrid Owner,
• Overlay Grid Operator

9. Microgrids Business models
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Utility Non utility
Owns wires Own use
Own use with some
merchant sales
Merchant only
Owns generation Non utility generation
One owner
Multiple
ownerManage
controls
May/may
not manage controls
Vertically integrated Unbundled Landlord Cooperative Model Customer-generator
Utility Aggregator Non Utility Aggregator
• Utility model – the distribution utility owns and manages the microgrid to reduce customer costs and provide
special services (e.g. high power quality and reliability) to customers on the system.
• Non-Utility model .
• Landlord model – a single landlord installs a microgrid on-site and provides power and/or heat to
tenants under a contractual lease agreement (e.g. smart building use case).
• Cooperative model – multiple individuals or firms cooperatively own and manage a microgrid to serve
their own electric and/or heating needs. Customers voluntarily join the microgrid and are served under
contract.
• Customer-generator model – a single individual or firm owns and manages the system, serving the
electric and/or heating needs of itself and its neighbors. Neighbors voluntarily join the microgrid and
are served under contract.
• Aggregation model – power and/or thermal energy is produced and sold among different users using the
existing utility distribution infrastructures

10. Potential activities
• Study of Italian regulatory framework
• Identification of the most suitable business model
for the Italian market (if any)
• Choice of business model
• Business model definition for stakeholders
• Simulation
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