A social cost-benefit analysis of community microgrid systems in New York State
Date
2018
Authors
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Publisher
University of Delaware
Abstract
A primary concern in the microgrid market, and specifically the community microgrid market, is the need for valuation models that better reflect the value these systems can provide to society. Numerous authors, including (Z. Zhang, Li, & Zhou 2010; Morris, Abbey, Joos, & Marnay, 2011; Morris et al. 2012; Wang, Li, Wu, Shahidehpour, & Li 2013; Razanowsky et al, 2014; DNV-KEMA, 2014; Marnay et al., 2015; Bahramirad et al., 2015; and Stadler et al. 2016) suggest that an expanded model for social cost-benefit analysis of microgrid systems is of critical importance, to support developing targeted microgrid policies and programs. The guiding theory of this dissertation is built on the work of these and other leading authors; this research is designed to take the field a step further beyond the ground that has been established to date, offering a unique contribution to the microgrid Social Cost-Benefit Analysis (SCBA) analytical method. ☐ By building on existing leading approaches to SCBA for microgrids, this study's results show that adjusting assumptions regarding the discount rate of the project and the social cost of carbon, and accounting for water use, equipment life extension, and network effects can greatly enhance the value proposition of microgrids. Monetizing these benefits are shown to have a decisive impact in removing market barriers to developing microgrid systems. These results are explored in the context of current policy and incentive programs, highlighting the need for an expanded valuation of microgrid systems, as discussed by (Lovins et al., 2002, Razanowsky et al, 2014; Stadler et al. 2016), among others. ☐ The study comprises both qualitative and quantitative results. In the qualitative sections of this research, an extensive review of contemporary literature has been performed and findings collated. Through the literature review key points of agreement and disagreement have been surfaced and specific variables to include in the quantitative model have been identified by frequency of mention in the works of leading authors. Sources of support for the selected variables and justification for their inclusion in the analysis stand on the most recent peer reviewed publications, government sources and reputable news media. This broad-based inquiry establishes an initial point for structuring the SCBA model used in the quantitative analysis. ☐ The design and intent of this research is to provide the reader with a detailed descriptive understanding of the present electricity grid transition, and the key role of microgrid systems in the transition as a lynchpin technology that enables integration of other distributed energy resources and addresses several of the main challenges facing the grid. The geographic region is the U.S., with a particular focus in New York State, however the goal is to demonstrate the need to expand the scope of microgrid valuation to guide the energy transition both in North America and worldwide-and, to provide contributions of global relevance toward improved microgrid valuation.
Description
Keywords
Applied sciences, Social sciences, Community microgrids, New York State, Social cost benefit analysis