Strong analysis of the virtues of a microgrid, particularly as they apply to data centers.

1. Unlocking
Microgrids
Taming the Beast: Microgrid Strategies for
Effective Cost Management of your
Electrical Infrastructure
Raj Chudgar, Principal
SunGard Global Services
Kevin Meagher, CTO
Power Analytics Corporation
May 2011
The proliferation of Smart Grid technologies,
upgrades to the communication grid, and
cheaper distributed generation offer
significant commercial and reliability
advantages to an optimized electrical
infrastructure solution in a micro setting.

2. In 2010, then EDSA Corporation, now increased revenue margins are dependent
Power Analytics Corporation, presented a on effective operating cost containment,
white paper at the Uptime Symposium leveraging of resources, optimization of
entitled “The Enterprise Data Center as a infrastructure, and uncompromised reliability
Microgrid.” That paper outlined the of their mission critical electrical network.
strategic imperatives that, when combined, For many organizations, power is the
make the enterprise class data center very largest operational expense, yet remains
well suited to take a leading role in the the least managed commodity - even with
evolving microgrid market as part of a significant upgrades in software solutions,
holistic approach to energy management physical infrastructure, and the addition of
and transforming energy demand into a distributed generation. Enterprise-wide
managed asset. In this paper, we take the power savings of just a few percentages
next step by laying out a generic technology can deliver millions to the bottom line.
roadmap for development of an operational
Microgrid. And perhaps just as important, a Today’s digital world provides operators
review of basic elements of an overall with technology solutions that deliver
energy and related services management competitive value. Unfortunately, many
plan. In many ways, the microgrid concept times the cost of this competitive edge, the
is simply a logical end to a macro energy sexiest new thing, increases energy
roadmap. consumption with potentially significant
negative impact on total cost of ownership
Unlocking Microgrids (TCO). Often times, companies only
Taming the Beast: Microgrid Strategies recognize the increased TCO for their ―sexy
for Effective Cost Management of your
solution‖ after the fact, and after the
Electrical Infrastructure
investment.
The Problem
The increased energy demands of IT
Basic Elements of an Energy
hardware and mission critical facility Management Plan
infrastructures continue to drive utility costs
Energy Services
higher and higher - and there is no end in
sight.
The most critical first step in managing your
Astute companies are looking for energy costs is to understand your power
competitive advantages and recognize that usage. The more you know, the better
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 1

3. prepared you are to develop effective Energy Experts
strategies to reduce energy costs. In many
The ability to manage energy, implement
ways energy services are very well
new strategies, evaluate existing strategies
understood, in other cases improved insight
and appropriate activities are not dependent
into your power network and management
on the data center management. A growing
of your energy contracts represent a
infrastructure may benefit from professional
significant opportunity to reduce costs.
consulting and advisory services, freeing
• Determine if you are purchasing power the organization from the need to become
at the lowest unit cost energy market experts. In many cases,
• Negotiate rate adjustments and these expert resources are already well
accurately audit utility bills with known to the data center operations and
confidence with historically accurate executive management and this service is a
knowledge of system performance and logical extension to the expertise and
capability support they have already been providing.
• Proactively manage power bills by Organizations such as SunGard, Accenture,
simulating power network configuration HP, IBM, Booze Allen Hamilton are just
changes to determine cost of power some of the many energy experts capable
effect of providing this counsel.
• Proactively manage power network with
intelligent infrastructure maintenance
In addition to the economics driving energy
• Develop a comprehensive energy
decisions, carbon reduction mandates, and
strategy
the desire to be good corporate citizens are
• Implement new forms of energy driving conscientious enterprises to look for
generation and storage that contribute ways to implement ―green‖ solutions. The
both to the data center overall load concept of renewable distributed energy
needs as required and are available for generation (solar, wind, etc.) and electric
bulk grid market applications vehicle services are enticing, However,
among the issues of how to optimize and
• Provide an energy road map for green
integrate these renewable energy sources,
alternatives such as photo voltaic, fuel
reliability becomes even more important.
cells and wind.
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 2

4. Just imagine an enterprise class data center generation and to optimize the use of
or university campus with numerous energy both for the facility and as an energy
buildings, several generation sources, and market instrument.
multiple building automation systems. Now
For the purposes of this paper, our working
consider adding in electric vehicle charging
definition of a Microgrid is even more
stations, a solar farm, micro-windmills, and
specific for a data center. This type of
energy efficient HVAC and water units.
Microgrid has as its
Implementing these new energy efficiency
primary mission high Characteristics
solutions without understanding and of a Data Center
availability - under no
optimizing the power network could result in Microgrid:
circumstance can
premature power equipment burn outs,  Critical power
availability or quality availability
significant loss of commercial revenue, and  High reliability
of power be at risk.  7x24x365
an unreliable substructure of the campus
With this qualifier, performance
grid. Is there a way to integrate, optimize  On-site generation
the data center
and manage such a scenario?
Microgrid takes
advantage of the inherent robust electrical
The Microgrid Opportunity
infrastructure to optimize and manage
With the proliferation of Smart Grid
energy.
technologies, including Advanced Meter
(AMI) technology, upgrades to the More than supply side
communication grid, electric vehicles, and
In the United States, Microgrids not only
cheaper and cheaper distributed generation,
benefit the supply side, but also help
the reality of optimized and reliable
manage demand and ensure reliability of
electrical infrastructure solutions in a micro
grid functions in real time through demand
setting offers significant commercial and
response (DR) and other load shifting, load
reliability advantages.
optimization, load shedding, and load cycling
There are currently many definitions about approaches. To date many Microgrid
what constitutes a Microgrid, but one thing solutions are limited to large implementations,
they all have in common is the inclusion of and to only using manual or semi-automated
on-site generation. A strong argument can processes for obtaining minor capacity credit
be made for inclusion of energy storage from structured markets and/or minor
both to manage the intermittency of changes to rate structures.
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 3

5. Even with the billions of dollars spent on Without any large-scale fundamental
Smart Grid and energy efficiency infrastructure upgrades, Microgrids can
infrastructure and software solutions, many stretch utility supplies and secure customer
companies have been unable to fully realize reliability using existing utility DR programs -
the commercial value, reliability, or - delivering greater value to the Microgrid
understanding of their energy consumption. owner, while also creating benefits to the
Because of this, many companies are only host distribution utility and transmission grid
taking advantage of the limited value of their operator.
investment. A key benefit of a Microgrid is
the ability to provide additional energy,
capacity, and ancillary services to the
energy markets, resulting in commercialized
value to the Microgrid owner.
Another Microgrid advantage particularly
relevant to the mission critical data center
operator is the ability to react quickly to
changing utility reliability conditions. Microgrid Dashboard from University of
California at San Diego
Currently, the Microgrid’s universe
Microgrid solutions are defined as a subset
specifically pertaining to reliability can be
of load and generation equipment and
divided into three distinct segments: (1)
software systems that traditionally reside on
large industrial and commercial demand
the customer side of the meter. Equipment
response, the largest commercial segment
can include any number of electrical grid
in the U.S., primarily manifested as load
structures for load optimization, generation
shedding or load curtailment; (2) supply-
optimization, environmental credits,
side, as in back up generation or battery
conservation programs, HVACs, pumps,
storage; (3) mixed asset configurations
heating systems, or any number of business
including the potential for a variety of
initiatives that companies turn to maximize
generation and loads. Ultimately, a Micro-
commercial value, enable new sexier
grid should bring together distributed
solutions, or create a ―greener‖ image.
generation and load, providing energy,
The promise of Microgrid software systems
capacity, ancillary services, and the ability
or the ―enterprise‖ class Microgrid master
to assist with frequency control during
controller is to efficiently manage an
reliability events.
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 4

6. increasing diversity of electricity generation, Depending on the location and access to
energy storage, net metering, and demand markets, generation can include the types of
assets. virtual power plants associated with a
campus. For example buildings can be
There are varying levels of energy
energy storage when modeled correctly.
management and optimization outlined in
the following sections. The levels outlined Energy Storage
are generically correct, and reflect One of the greatest potentials here is
increasing effort, cost and return. The advanced battery energy storage (such as
starting point can vary based on strategic Lithium-Ion) external to the data center.
and other objectives. With as little as .5Mw (half a megawatt) of
available storage, energy markets allow
Energy Generation
consumers to participate in both voltage
There are many variables that are part of
stability and frequency stability markets. In
any decision to utilize on-site generation for
addition, battery storage appears to the data
more than just emergency back-up power.
center as a very high quality generation
Generally speaking however, this excess
source, transparent to the rest of the facility
capacity or generation is balanced against
but available in the event of problems with
the absolute need for high availability.
other generation assets. This strategy
Today, energy generation resources are allows the operator to ―drop‖ out of market
more than just traditional diesel generation. participation to use the battery energy for an
Green energy sources such as photo hour and then come back to the market
voltaic, fuel cells and even wind are quickly when the energy is no longer needed for
becoming mainstays in mixed distributed local demand.
generation strategies.
Automated Demand Response (Auto DR)
Active Demand Response programs are
those where the customer adjusts their
utility load when the regulatory body or
independent system operator (ISO)
manually sends out information due to
reliability events. Traditionally Active
Demand Response programs are not a
Distributed generation Microgrid resource good response to reliability events due to
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 5

7. the manual operations and lack of real time solutions is that they provide products that
automation design, monitoring, and can be leveraged into the market to address
forecasting capabilities. immediate reliability and commercial
requirements.
As Demand Response programs evolve and
reliability events increase due to the Automated controls solution industry giants,
proliferation of distributed generation and have entered this market as full-service
the increasing demand of electric vehicles, providers, as have new IT-oriented
organizations will look to Automated competitors. These companies typically
Demand Response (Auto DR) as a way to provide a suite of services including design
mitigate external reliability threats. of control installations and telemetry, remote
management of energy equipment,
Automated Demand Response (Auto DR) is
management of response to calls for
an important Microgrid application that is
demand reduction, and fulfillment of
already established to some degree in the
technical and administrative requirements,
commercial and industrial markets. A fully
such as monitoring and verification of
automated solution that programmatically
performance.
shifts generation or load to address market
and reliability events, Auto DR is a tool that However, it should be stated that it is not
co-optimizes local resources and load as currently possible to determine from market
well as provides modeled output for and program records, the degree to which
commercial decision making. It is becoming automated response systems—as opposed
an important resource in several to occupant actions—actually control
jurisdictions and markets when response building operations during demand
time is critical for reliability requirements, response events. Therefore traditional
including additional capacity and frequency demand response programs fall short on
control. their ability to reliably respond to real time
market and reliability events.
In an Auto DR solution, a customer, typically
supported by automated controls and Indeed, the ability to participate in these
information technology solutions, installs markets is dependent on the ability to model
equipment that enables demand reduction the Microgrid, transport the data feeds, and
in response to wholesale or reliability events monitor performance. If these capabilities
or system reliability needs as signaled by a exist, then customer – and utility in turn –
utility or ISO. The versatility of these are rewarded for demand reduction
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 6

8. performance in accordance with dispatch can also use the building itself as a source of
instructions including energy, capacity, and thermal storage, for instance, by "pre-
frequency response. cooling" the building in early morning hours
to enable reduced energy consumption later
The ultimate goal is to provide reliability and
in the day at peak hours (Load Shifting).
commercial based products to the energy
However, many of these demand response
consumer or energy producer without the
solutions lack the capability to make real
customer ever noticing a change to their
time adjustments for reliability events due to
conditions.
the lack of telemetry, performance of
The Need for Co-Optimization metering signals, security concerns, and/or
Larger commercial and industrial customers any number of software solution issues.
have increasingly deployed building energy In the near future, with the introduction of
management systems or, indeed, industrial cutting edge secure software solutions and
process management systems capable of advanced meters, these consumers will have
responding to reliability event and/or real- the potential to combine and process energy
time pricing demand response signals, and usage, on-site building generation, thermal
also capable of providing information and and electric storage, and even electric
validated response data back to aggregators vehicle charging. They will be able to co-
and market operators. More sophisticated optimize all resources against forecast
building management systems are even able weather conditions, basic usage demand,
to manage on-site thermal storage. They market reliability information and energy and
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 7

9. capacity market prices, so as to minimize the Laying the Foundations for the Virtual
impact of reliability events and leverage Power Plant
excess capacity.
Utility executives, policy makers, and
regulators at the federal and state levels
One of the keys to achieving Renewable
mostly agree on the barriers to broader
Portfolio Standard (―RPS‖) mandates will be
integration of auto demand-side solutions
the use of demand response as a form of
into grid operations and the complex next
system reserve, real-time dispatch, frequency
steps necessary to overcome them. FERC
control, and other ancillary services. These
has recently adopted a policy to pay
services require a quick response (< 10
demand response solution providers on par
seconds) and "certainty" in the response
with generation providers. The following
provided. Advanced solutions can provide
points identify some key elements of a
continuous updating of what is available and
policy and regulatory agenda to support the
factor the potential revenues and market
development of Microgrids:
events from ancillary service provisions into
the co-optimization.  Identify reliability event mechanisms to
guide the development and deployment
Additionally, these systems will need to be
of demand resources wherever possible
modeled down to the individual equipment
to minimize reliability events.
level, provide operators with ―what if‖
 Develop consistent, long-term customer
capabilities to factor in risk, and also provide
incentive and technical assistance
monitoring of the equipment in real time to
programs to support the development of
mitigate any real time deviations.
key elements of the Microgrids.
 Within jurisdictions, coordinate the
marketing and operation of demand
response with energy efficiency
programs conducted by system
operators, utilities, and government
agencies.
 Develop and disseminate frameworks
for consistent inclusion of demand-side
Microgrid Operator Dashboard showing resources in forecasts used for supply
the power network
planning.
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 8

10.  Development of standard reporting and management of the energy grid will change
aggregation of data for utility and as distributed generation (solar, wind,
regulatory consumption. geothermal) and storage technologies are
implemented in Microgrid settings.
Mixed Asset Value Proposition—
Microgrids With this concept in mind, mixed asset
The future of demand response solutions – Microgrids, as they grow and attract
providing real time capabilities to solve customers, are uniquely positioned to take
reliability events – are on the brink of advantage of reliability and commercial
becoming a reality. Significant advances in events with real time constraints and
software and telecom technology have provide organizations with more security on
greatly increased performance, modeling, grid management and long term stability.
and data monitoring capabilities in a secure While there are a number of regulatory,
communication mechanism. Opening up commercial, and political decisions that
Microgrid customer classes to provide need to be made, the future of demand
demand response solutions for greater grid response utilizing mixed asset and Auto DR
reliability and commercial value could be capabilities in a Microgrid setting address a
used in capacity sparse, frequency number of growing issues in the electric
deviation, or any number of reliability and markets today.
commercial event situations. This would be
Summary
a watershed event for our power grid. The
The ability to optimize infrastructure, cost,
greatest value of these solutions is the
availability and energy demand are classic
ability for utilities to draw energy, capacity,
examples of a complex economic optimization.
and ancillary services from Microgrid
operators without a significant effect on the
end use customer.
Future Outlook for Utilities and Their
Customers
The utility business model, functions, and
relationship with the customer change Microgrid Energy Management Dashboard with
significantly when customer energy loads “What If” environment.
are tied to customer resources. Further- This complexity is well worth the effort to resolve
more, the utility’s overall role in regard to because the stakes are so high.
Raj Chudgar Kevin Meagher
Principal, SunGard Global Services CTO, Power Analytics Corporation
May 2011 Page 9