Microgrid Bidding and Procurement

Can microgrids be financed?

Microgrids can be financed if the components (and potentially the entire system) can be justified economically and paid for out of energy savings or avoided costs.

How should a microgrid design be defined before awarding a contract?

Define the microgrid design before awarding the contract. If the microgrid project is implemented using a phased approach, ensure the overall design and concept is well defined before the first contract is awarded. Decisions made early in the process will impact the effectiveness of the microgrid system.

How can agencies use appropriations to buy microgrids?

Utility services contracts. Other mechanisms such as a power purchase agreement (PPA), enhanced use lease (EUL), and utility privatization may be useful to agencies that have the authority to use them. Agencies can also use appropriations to purchase microgrids, potentially in conjunction with a privately financed procurement mechanism.

What is a microgrid?

Figure 2. A microgrid is defined by the U.S. Department Energy Microgrid Exchange Group as a group of interconnected loads and DERs within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid.

Can a microgrid be financed by a utility privatization?

Utility privatization (UP) can be a potential approach for financing microgrid implementation if an agency has the appropriate authority to enter into this type of agreement.

How can a microgrid eficiency upgrade benefit a project?

A comprehensive project that leverages energy and water eficiency upgrades can result in avoided costs and reduced site loads, improving resilience and project payback. If microgrid controls and integration cannot be financed from cost savings, appropriations can be combined with financing to cover these costs.