TO: TRANSPORTATION AND FROM: Matt Cano
ENVIRONMENT COMMITTEE
SUBJECT: SEE BELOW DATE: January 19, 2022
Approved Date
1/20/22
SUBJECT: POTENTIAL MICROGRIDS AT CRITICAL FACILITIES EVALUATION
STATUS REPORT
RECOMMENDATION
Accept the status report on the evaluation of potential microgrids projects at critical facilities.
OUTCOME
Approval of the recommendation provides the City Council with updated information on the status of the potential microgrids projects at critical facilities. Additionally, approval provides direction for Staff to procced with the continuation of microgrid funding applications.
BACKGROUND
On September 1, 2020, the City Council approved the master agreements for consultant services for microgrid and energy resilience studies and projects. The approval provided staff the ability to hire professional technical consulting services needed for the City to evaluate, develop, and potentially deliver microgrid and energy resiliency projects, including the possible establishment of City owned and operated electric distribution systems to targeted facilities or geographical areas of the City. The use of such consultant services is needed as there are no staffing resources available that can be dedicated to this program. Staff has continued to monitor outside financial opportunities to aid in the development of new projects and will leverage microgrids into all new development projects contingent on site and system feasibility and funding availability.
ANALYSIS
Since September 1, 2020, the following activities have been conducted related to microgrids and energy resilience projects:
1) Funding and Grant Activities
T&E AGENDA: 02/07/22
ITEM: d.2
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
a) Staff continues to seek creative funding strategies to support the microgrid program, including for feasibility analysis work, design and engineering tasks, and ultimately for construction activities. In October 2019, due to the preparation to minimize the impacts of the Public Safety Power Shutdown (PSPS) events initiated by PG&E, $5 million in a one-time General Fund allocation, for emergency power generation infrastructure, was provided to support critical municipal facilities providing essential services to the community and City operations that currently are not resilient to planned or unplanned electric outages. Such facilities include multiple fire stations, warming and cooling centers, sanitary pump stations, and animal care sites that either do not have backup generation or sufficient emergency power. However, as COVID-19 began to emerge in Spring 2020 and the City prioritized the emergency support towards the pandemic and took action to reduce expenditures to resolve the anticipated General Fund shortfall, the PSPS allocation was reduced by $3 million, leaving $2 million available for facility resiliency efforts. Of this remaining balance, $1 million has been used to procure two new diesel fuel storage trucks to re-fuel the nearly 100 existing diesel generators throughout the City, four mobile electric vehicle charging stations (consisting of a solar array and battery storage system) that can also be used to power critical plug load equipment, and backup generation for the Police Substation fueling island. The final $1 million had been committed to the microgrid program, with $54,000 used to support site feasibility work by consultant services and $66,000 used by the Public Works in-house engineering team, resulting in a current remaining balance of $880,000. b) In addition, staff has pursued funding support through federal programs, in particular through the FEMA “Building Resilient Infrastructure and Communities” (BRIC) opportunity. In Spring 2021, an application had been prepared requesting a 75% project match of funding support for a microgrid project within the City, with a review by a California Energy Commission (CEC) team as the grant submitting liaison to FEMA. However, upon review of the application and multiple working meetings with the CEC, it was determined that the submittal would not be considered for funding as FEMA was not very familiar with microgrid technologies and would not prioritize funding for such projects at that time.
c) Also, with the new funding allocations dedicated to infrastructure related projects, staff has coordinated discussions with State lawmakers (State Assembly Members Kalra, Stone, and Lee, and State Senators Cortese, Laird, and Wiechowski) on the City’s budget and policy priorities, highlighting microgrid funding support with references of $4 million for previously identified priority sites, and $40 million to support all critical City sites that do not currently have emergency power resources. Should the microgrid proposal not gain as much traction with the State lawmakers, staff intends to pursue briefings with federal lawmakers later this calendar year.
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
d) An additional funding strategy being considered to support the microgrid program is the use of power purchase agreements (PPA). PPAs allow a microgrid company to administer all design and engineering work, procure required equipment, and install and operate the microgrid system, at no major cost to the end use customer (aside from plan check reviews and permitting, construction oversight, and inspection). The end use customer commits to purchasing the power generated from the microgrid system, typically for a 20-year term, with rates competitive to utility power. The City has experience in entering into PPAs, since 2010, for multiple solar energy systems at municipal facilities. Additionally, other municipalities, including Fremont, have recently entered into PPAs for microgrid systems, with City staff further researching the specifications of those agreements for possible consideration. Staff will continue to research and pursue outside funding opportunities to support the microgrid program to minimize budget proposal requests from the General Fund. 2) Microgrid Ranking for 42 Critical Sites Study – 42 critical city facilities which have minimal or no backup generation were selected for the evaluation of potential future microgrid or energy resilient projects. To prioritize the sites, ranking criteria and a weighting scheme (Table 1) were established based on the site’s mission, demographics, electric outage history, site resources, electrical load suitability and nature, development capacity, and financial viability. From a community equity standpoint, median household income data was used from Statistical Atlas
(https://statisticalatlas.com/place/California/San-Jose/Household-Income#top), with incomes less than or equal to $74,000 annually receiving a maximum score, incomes less than or equal to $108,000 annually receiving a mid-level score and incomes greater than $108,000 annually receiving a minimum score for consideration. This model yielded the ranking for all sites as shown in Table 2 below.
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
Table 1: Ranking Criteria and Weighting Scheme
0 Bond Financed Y/N
1 Facility Need 35%
1.1 Mission Criticality 35%
1.2 Community Equity (Based on Median Household Income) 35%
1.3Outage Level 30%
2 Suitability 15%
2.1 Site Resource 25%
2.2Nature of Load 75%
3 Development Capacity 30%
3.1 Microgrid Potential (Community or Campus) 15%
3.2 Space for Development 85%
4 Financial Viability 20%
4.1 Energy Costs 50%
4.2 Existing Generation 50%
Total 100%
Table 2: Ranking for All Sites
Rank Site Score
1 Roosevelt Community Center 2.59
2 Almaden Community Center and Library 2.50
3 Camden Community Center 2.46
4 Happy Hollow Park and Zoo 2.40
5 Bascom Community Center 2.39
6 Mayfair Community Center 2.25
7 Police Substation Fueling Station 2.25
8 Happy Hollow Park and Zoo Pump Station 2.17
9 Seven Trees Community Center 2.12
10 Southside Community Center 2.08
11 Fire Station 16 2.07
12 Emma Prusch Farm and Park 2.06
13 Willows Senior Center 2.04
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
Rank Site Score
14 Fire Station 14 2.03
15 West Corporation Yard Fueling Island 1.93
16 Fire Station 3 1.91
17 Fire Station 18 1.91
18 Evergreen Community Center 1.90
19 Regional Wastewater Facility Fueling Island 1.83
20 Tea Garden Pump Station 1.82
21 Fire Station 10 1.82
22 Los Esteros Pump Station 1.80
23 Fire Station 11 1.77
24 Fire Station 9 1.73
25 Berryessa Community Center 1.70
26 Fire Station 7 1.69
27 Fire Station 5 1.65
28 Junction Pump Station 1.60
29 Ridder Park Pump Station 1.60
30 Cypress Community Center 1.56
31 Gateway Pump Station 1.52
32 Willow Pump Station 1.45
33 Fire Station 15 1.45
34 Brookside Pump Station 1.43
35 Nordale Pump Station 1.39
36 Fire Station 22 1.36
37 Padres Pump Station 1.30
38 Zanker Pump Station 1.30
39 Fire Station 6 1.30
40 Montague Pump Station 1.21
41 Fire Station 8 0.00
42 Fire Station 23 0.00
The major constraint for all of the sites reviewed is development space as many of the sites have no availability for development at all. For example, several of the pumping stations have no space for development beyond installing a solar canopy, with no spare room for baseload power or battery backup. A true microgrid or resilient building must be able to power itself through an outage. To do this effectively, the minimal amount of space needed is approximately 720 square feet to 1,000 square feet for a small generator or battery system (for reference, this equates to approximately 4 to 6 parking spaces).
Solar energy canopies for many of the pumping stations would provide added resilience, however a full resiliency may be achievable for only a few locations that have adequate space for battery storage systems as well. This is also true for the fire station sites,
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
although to a lesser extent.
Among the 42 sites, the top 10 sites facilities as shown in Table 3 were selected for an indepth review, which may result in further consideration for future feasibility assessments.
Table 3: Top Ten Site Rankings
Rank Site Score
1 Roosevelt Community Center 2.59
2 Almaden Community Center and Library 2.50
3 Camden Community Center 2.46
4 Happy Hollow Park and Zoo and Pump Station 2.40
5 Bascom Community Center 2.39
6 Mayfair Community Center 2.25
7 Police Substation Fueling Station 2.25
8 Seven Trees Community Center 2.12
9 Southside Community Center 2.08
10 Fire Station 16 2.07
The City’s goals are to develop energy assets without carbon emissions and based on the renewable resources available at each site, a combination of solar and energy storage is the most reasonable approach to meet these goals. Microgrid projects can provide power reliability, increase power quality, and continue electrical supply during grid outages, though high capital costs and lengthy payback periods can create challenges in immediately implementing these projects.
Seeking a good balance of cost and resilience, developing an appropriate business model, and continuing to seek strategic funding opportunities are the next steps to further develop this program. It is also in the City’s best interest to develop standards for new construction with regard to both energy efficiency and resilience. These standards help to ensure developers meet the City’s aggressive goals and also serve to facilitate future measurement and verification efforts. Equipment such as smart inverters and meters as well as energy conservation measures (ECMs) should all be standard. 3) New City Development Projects
Staff is actively designing new development projects with increased energy resiliency in mind, along with sustainability, reliability, and efficiency measures, while implementing the City’s 2030 Net Zero Energy goal. Below are three projects that served as examples for implementing microgrid infrastructures in place.
a) Fire Station 37 Project – 38.5 kilowatts (kW) of solar photovoltaics (PVs) are planned to be installed on this new building. The solar array system will be split between the roof of the building and the parking lot canopy/structure due to overall roof size and best area limitations. The PVs will provide up to 25% of normal usage off-the-grid electricity. The project is expected to be completed in
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
February 2022. This project is funded in the Public Safety and Infrastructure Bond (Measure T).
b) Fire Department Training Center and Emergency Operation Center Project – 472.8kW PVs will be installed on the roofs of buildings 1 and 2, and on the 4 large parking lot canopies/structures of this project. The total system will provide up to 99.99% of the buildings’ normal use off-the-grid electricity. Buildings 1 and 2 are built with the infrastructure in place to receive the battery energy storage system / microgrid structures. The project is currently at 35% completion and expected to be fully completed in January 2023. The Fire Department Training Center is funded in the General Fund and the Emergency Operation Center Project is funded by Measure T.
c) Solar4America Project – 525kW of a natural gas Bloom Energy fuel cell system will be installed at the expanded Sharks Ice facility, located at the back-parking lot of the San Jose Municipal Stadium. The Bloom Energy system will provide up to 25% of normal usage off-the grid electricity and is expected to start construction in the second quarter of 2022. This project is funded by the Ice Center Expansion Bond Program.
CONCLUSION
Microgrid projects can provide power reliability for critical facilities, increase power quality, and serve as backup emergency generation during utility grid outages, however high capital costs and lengthy payback periods can create challenges to implement such projects. Staff has focused on seeking a good balance of cost and resilience, developing an appropriate business model, identifying creative funding opportunities, and outlining energy efficiency and resilience standards for new construction projects.
EVALUATION AND FOLLOW-UP
No additional follow up action with the Council is expected at this time. Staff will continue to seek microgrid related funding to support the future projects. Projects requiring City Council approval will be agendized for future Council meetings as the projects develop. City Council will be updated on the projects as part of the Public Works regular CIP reports.
CLIMATE SMART SAN JOSE
The recommendations in this memo align with one or more Climate Smart San José energy, water, or mobility goals.
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
PUBLIC OUTREACH
This memorandum will be posted on the City's website for the February 7, 2022 Transportation and Environmental Committee Meeting.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
COMMISSION RECOMMENDATION/INPUT
No commission recommendation or input is associated with this action.
FISCAL/POLICY ALIGNMENT
This project is consistent with the Council-approved Budget Strategy Economic Recovery section in that it will spur construction spending in our local economy. It also supports the City Council’s goals and direction to improve energy resiliency.
COST SUMMARY/IMPLICATIONS
Current staffing levels and available project funding have created challenges in fully developing the microgrid program within the City. Public Works does not have any available staffing resources to dedicate towards the development of the microgrid program and have been working with the aid of consultant services and between other high-level priority projects. As a result, the progression of the program has not moved as rapidly as desired. Staff continues to focus on monitoring and applying for financial assistance to support the design and construction of such projects for existing critical facilities and will assess feasibility for integration in new development projects based on benefit, space availability, and cost.
Staff and the consultant have performed additional reviews of the top four ranked sites to determine if viable projects can be implemented within the remaining available $880,000 budget.
At this time, it appears that limited microgrid projects may be implementable within the available budget at locations such as Roosevelt Community Center and Happy Hollow Park & Zoo and adjacent pump station. Further information on this assessment will be presented to the Transportation and Environment Committee and, pending feedback and further analysis, may be considered as part of the development of the 2022 - 2023 budget process.
HONORABLE MAYOR AND CITY COUNCIL
January 19, 2022
Subject: Potential Microgrids at Critical Facilities Evaluation Status Report
BUDGET REFERENCE
N/A.
CEQA
Not a Project, File No. PP17 009, Staff Reports, Assessments, Annual Reports, and Informational Memos that involve no approvals of any City action. /s/
MATT CANO
Director of Public Works
For questions, please contact Walter Lin, Deputy Director, Public Works Department at [email protected] and at 408-535-1298.