Validated, Transparent, and Accessible Microgrid Valuation and Optimization Tool (DER-VET)

The Issue

Microgrids have the potential to enhance the electric power system’s reliability and resilience in the face of new challenges, including an increasingly carbon-free generation mix and more frequent extreme weather events. Like the traditional, centralized electric grid, microgrids generate, distribute, and regulate electricity to customers, but do so locally and on a much smaller scale. Microgrids form a self-contained organization of Distributed Energy Resources (DERs) and load management that is capable of self-balancing, when necessary, within an isolatable portion of grid infrastructure. These resources can also improve operational efficiency, increase grid flexibility, offset the need for conventional generators, and increase utilization of grid assets. Microgrids can be expensive, and many are unable to recover their costs through monetary value streams alone, so rely on the value of the resilience they provide for justification. However, with proper location identification, design, and operation, there are opportunities to stack financial benefits from the DER in a microgrid to offset some or all of the costs of such installations with potential tradeoffs around the level of resilience the microgrid can provide. Planning for microgrids requires modeling and analysis tools that consider resilience objectives, costs, and benefits simultaneously to help their users navigate a complex and challenging multi-objective decision-making process. Additionally, microgrid development necessarily involves a large number of stakeholders, including customers in the microgrid isolation boundary, ratepayers outside of the microgrid, the electric utility supplying the microgrid when not islanded, funding organizations, regulators etc. All of these stakeholders need a common framework to understand, communicate, and trust the financial and resilience outcomes for microgrids.