Major microgrid under development in northern Calif.

An airfield along California’s northern coast may hold a key to the future of microgrids in the United States.

The Redwood Coast-Humboldt County Airport is set to be the site of an $11 million microgrid that is designed to test the business case for setting up “islanded” systems that can continue providing electricity when a wider region is hit with power outages.

The project is part of a larger plan to build grid resilience in Humboldt County, but will also play a role in helping California’s grid operator and utilities commission hash out new rules and regulations for microgrids, according to Peter Lehman, founding director at the Schatz Energy Research Center at Humboldt State University, which is spearheading the effort.

Project participants include the Redwood Coast Energy Authority, a community choice aggregator, and Pacific Gas & Electric, an investor-owned utility.

The microgrid, set to begin operating in early 2021, will include 2 megawatts of solar capacity that will be sold into the wholesale power markets run by the California Independent System Operator.

Electricity from the solar panels will be stored in a 2-MW battery system that can run for four hours on a single charge. The 2-MW solar system will feed into the lithium-ion batteries using an innovative direct-current coupling, according to Lehman.

Generally, the facility will supply power from the batteries onto the grid later in the day when power is most needed, Lehman said.

A separate 250-kilowatt solar system will be net-metered and supply electricity to 18 customer accounts, including the airport and a Coast Guard air station that provides search and rescue service along 250 miles of California coastline.

Other features include a microgrid controller that will interface with a PG&E distribution control center and electric vehicle charging stations that can provide demand response. PG&E will own the microgrid circuit.

The project is funded by a $5 million grant from the California Energy Commission and the RCEA received a $6 million loan from the U.S. Agriculture Department’s Rural Utilities Service to finance its part of the project. The RCEA will own the solar facilities and the storage system.

The project will be the first front-of-the-meter, multi-customer microgrid in PG&E’s service territory.

The project is being set up as California has faced a series of planned power outages that aim to prevent power lines from starting wildfires. Humboldt County was hit with two planned outages.

Humboldt County also faces earthquake and flooding risks. “We need to be prepared for a large outage here,” Lehman said.

There are operational, financial and regulatory challenges facing the project, according to Lehman.

For example, the project participants want to be able to reserve some of the battery storage capacity in case of an emergency instead of selling all the battery system’s energy into the wholesale market, but the CAISO’s existing rules don’t allow it, according to Lehman, who noted that the grid operator’s ancillary services market appears the most lucrative of its markets for the project.

There are also tariff issues, such as cost allocation, that need to be worked out, Lehman said.

Lehman expects project participants will be closely involved in the California Public Utilities Commission’s just-launched rulemaking for microgrids.

The rulemaking, approved in September, grew out S.B. 1339, a bill that requires the PUC to develop standards, protocols, guidelines, rates and tariffs that support microgrid development while avoiding shifting costs between ratepayers.

A separate project — the Blue Lake Rancheria microgrid — developed by the Schatz Energy Research Center operated flawlessly during two recent planned power outages, according to Lehman.

Eight people whose lives depend on electric medical devices were given hotel rooms within the microgrid during the outages, he said.

The microgrid includes a 20-kW photovoltaic array and 500-kW/950-kilowatt-hour battery energy storage system. The battery system is being doubled in size to make the microgrid more effective, according to Lehman.

“We’re really trying to establish a microcosm of what could be in California,” he said.

Currently, microgrids are being custom designed, but when designs become standardized, their costs will fall substantially, according to Lehman.

Although solar and battery prices are falling, design and construction costs make up the bulk of overall microgrid costs, he said.