This executive summary is from the report Power the Fight: Capturing smart microgrid potential for DoD installation energy security. It may be useful to others planning smart micro grids.
Nearly 99% of the more than 500 DoD installations nationwide are dependent on the commercial grid for power. While the U.S. commercial grid is reliable and resilient, power outages have occurred with greater frequency in the last decade, leaving installations increasingly susceptible to power loss and mission disruption. Complicating this problem, many installations are located at the outer reaches of local transmission and distribution networks, leaving those installations more vulnerable to power interruption, with longer recovery times.
These installations are vital to our nation’s security. Loss of their full capabilities due to outages would diminish our nation’s warfighting potential in a crisis. Installations, historically springboards for warfighter deployment, have increasingly become command centers for essential support operations, as well as staging areas for critical humanitarian and homeland defense missions. If an installation loses power today, this would not be a merely local event. Global missions might also be strained.
In 2008, the Defense Science Board highlighted the vulnerability of fixed military installations on an aging commercial grid in a seminal report on energy, More Fight—Less Fuel. Increasingly, military planners seeking to lessen this national security vulnerability are turning to microgrids.
DoD currently operates more than 500 fixed installations across the United States. Against this portfolio, we recognize that drawing conclusions on the basis of several site visits and scenario analyses can be misleading. However, based on all of the data the BENS Microgrid Task Force reviewed in its site visits and briefings, and the results of multiple evaluations conducted, we have a high degree of confidence in the following conclusions:
- DoD installation microgrids with significant renewable generation assets can be financially beneficial. The analysis of Joint Base Pearl Harbor-Hickam shows a microgrid powered by a high-level of renewable sources (50% in this case) can result in a higher level of power surety for the base at reduced annual energy cost to DoD. Using the financial model tool, we have determined about 25% of domestic installations can implement smart microgrid projects that would reduce annual energy costs. In general, these installations are located in States with higher-than average current electricity prices that may represent about $1.5 billion of DoD’s total annual installation energy cost. If the modeling of Joint Base Pearl Harbor Hickam is indicative, reductions in annual energy cost of 15% are possible, meaning DoD could achieve net savings on the order of $225 million annually from development of microgrids at these installations. This conclusion is important because of the unique black start capabilities that renewable sources potentially provide installations in the case of an extended outage.
- The economics of microgrid projects are heavily dependent on specific locations. Just as the Pearl Harbor example showed positive financing of a renewables-focused microgrid, Fort Bragg showed the inability of a renewables-focused (or natural gas-focused) microgrid to drive an energy security solution that also reduces an installation’s annual energy budget. On the other hand, the availability of land at Robins AFB, and the installation’s location on the grid, provide for an alternative energy security solution using peaker plants. The major factors that affect project economics are location-specific: State incentives for renewable generation, the quality of available 2324 renewable (or even possibly non-renewable) resources, the cost of electricity, and the current stability and renewable (or even possibly non-renewable) resources, the cost of electricity, and the current stability and adequacy of the local grid. Through its existing renewable energy efforts, DoD has grown significantly in its understanding of some of these factors. The Task Force developed a prioritization framework that brings a comprehensive set of factors together, and provides it in the Appendix for DoD consideration.
- Many DoD microgrids will operate at a “security premium” that DoD needs to explore further. The Fort Bragg example highlighted that many microgrid solutions will result in a higher annual cost of energy than some installations are currently paying. The difference in cost will constitute a premium that DoD should be willing to pay to ensure continuous power to the missions, particularly critical missions, at the installation. In the Fort Bragg example, the minimum security premium was 16 to 18% above current energy costs. In the course of this study, the BENS Microgrid Task Force came across other values for this security premium. For example, the microgrid for the National Interagency Biodefense Campus at Fort Detrick delivers electricity that is over 150% more expensive than the utilityprovided power to the installation. The development of a more complete situational awareness of the economics of backup generation currently in use at DoD installations, combined with consideration of the criticality of missions at specific bases, and the costs of alternative microgrid approaches, will all enable DoD to develop a specific policy regarding the idea of a security premium.
- A “most economic portfolio” of DoD installation microgrids would likely be a combination of technologies and business relationships with serving utilities: Even the limited number of examples described above demonstrates the diversity of circumstances (technical, economic, and regulatory) across the DoD portfolio of over 500 installations. If project economics were heavily weighted as the factor driving the specific microgrid design selection, there would be no single template that would emerge as a “typical” DoD installation microgrid. The BENS Microgrid Task Force finds this to be an inevitable outcome given the diversity already inherent in the portfolio of installations. This situation drives management, organizational, and strategic considerations for decision-making that are explored further in later sections of the report. However, the incorporation of microgrids into the DoD energy portfolio of efficiency and renewables is of paramount importance if energy security is to be achieved. Meeting current Federal energy goals will not provide the desired or necessary energy security to support critical missions without smart, secure microgrid technology. In this respect, the definition of energy security by DoD and the inclusion of microgrids in this equation is an important first step towards addressing the Defense Science Board’s (2002 and 2008 energy reports) critical observation of DoD’s current installation energy posture.
The full report is here: http://www.bens.org/document.doc?id=186
Business Executive for National Security
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