Microgrids and DER in community planning: Practices, permits, and profitability

The profitability of PV production and its possibilities for backup power were studied in this report. The idea was to study the additional value offered by PV, with investments already made, as backup in conjunction with batteries. In a typical backup power solution, backup units are only used during outages. With a PV and battery sourced backup system, production units operate the whole year round, collecting revenues and providing backup power value, on top of revenue from sales to market. These systems are similar to microgrids, which are usually defined as small-scale power systems shared by multiple buildings, with the ability to operate independently from the main distribution system for short periods. The backup power capability of fluctuating production units is, however, limited, and cannot be the only source in long outages. Small-scale production units can, however, reduce the operating costs in longer outages by reducing, for example, diesel fuel costs and generator investment costs, by reducing the size requirement for the main backup generator. The case study was made for an area of buildings located in Närpiö. The potential and the cost-efficiency of PV panels were investigated, as well as the cost effect of using PV together with battery in backup operation. The results indicate that 22% of yearly energy could be produced with PV panels, when most of the roof is utilised for this. The profitability depends on the cost of financing and the investment cost. The system could be profitable if the interest rate was 3% or lower. In practice, financing would have to be provided by entities with low financing costs, like municipalities. PV production was best suited to the load profile of the supermarket in the case area, the load of which was concentrated in the daytime. There are many sources of information available regarding renewable power in Finland in general, but information about combined small-scale production and backup systems is rare. This is understandable, because the power infrastructure in Finland is quite mature and outages rare.