Phase I Microgrid Cost Study: Data Collection and Analysis of Microgrid Costs in the United States

The U.S. Department of Energy (DOE) Office of Electricity Microgrid Cost Study project is looking at identifying the costs of components, integration and installation of U.S. microgrids and project cost improvements and technical accelerators over the next 5 years and beyond. This information could then be used by the DOE among others, to develop RandD agendas for the development of the next generation microgrids that provide cost effective, reliable and clean energy solutions. Microgrids are gaining in popularity because of their adaptability and flexible expandability, the need for increased electricity reliability, the increased affordability of distributed energy resources (DERs) and grid intelligence devices, goals to reduce greenhouse gas emissions, and other factors. The U.S. Department of Energy commissioned NREL to complete a microgrid cost study and develop a microgrid cost model. The goal is to elucidate the variables that have the highest impact on costs as well as potential areas for cost reduction. This study consists of two phases. Phase I comprises the collection and analysis of data from microgrid projects built in the United States and is the subject of this report. In Phase II, NREL will assess current barriers facing the industry and identify potential solutions with help from industry representatives. Microgrid components are classified as follows in the form used to collect cost data from industry representatives for NREL's microgrid cost database: DERs: diesel, natural gas, combined heat and power (CHP), biofuel, solar photovoltaic (PV), wind, and fuel cell and energy storage; microgrid controller: primary, secondary, or tertiary; additional infrastructure: distribution system infrastructure, information technology communications upgrades, metering, etc.; soft costs: engineering, construction, commissioning, and regulatory. The purposes of Phase I are to better determine the contribution of individual components to total project size and to identify cost differences in projects within the same market segment. Phase II will use the results of Phase I to have an initial indication of the costs that might be driving the cost of development the most.