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TCAAP Energy Integration Resiliency Framew ork <br />Policy White Paper – Energy Supply Alternatives <br /> <br /> 23 <br />usage density to minimize the cost of the d istribution piping and energy transfer stations at each of the <br />buildings. Commercial applications such as hospitals, nursing homes, laundries, and hotels with large <br />hot water needs are also well-suited for CHP, because of the steady demand for electricity and thermal <br />energy. Institutional applications and residential and recreational facilities are also excellent prospects <br />for CHP. Implementation of district energy with CHP at TCAAP is most applicable with the aggregation <br />of both higher density commercial, industrial, or multi-family residential buildings, such as within the <br />central district of the Town or Thumb. <br />5.1.6. Battery Storage <br />Battery storage systems store electrical energy for use at a later time. Batteries store electric <br />generation when generation is greater than demand. Battery storage is sparsely utilized across the <br />United States due to the current market costs associated with battery bank installation; however, costs <br />are beginning to slowly decrease due to scale up of production combined with large go vernment <br />incentives. Battery storage can be a favorable solution in the future for applications that place a higher <br />value on power reliability and the establishment of microgrids, such as the AHATS site or the Thumb. <br />5.1.7. Electrical Microgrids <br />Microgrids are defined by the US Department of Energy to be “a group of interconnected loads and <br />distributed energy resources within clearly defined electrical boundaries that acts as a single <br />controllable entity with respect to the grid and can connect and disconnect from the grid to enable it <br />to operate in both grid-connected or island-mode.” A microgrid that integrates and controls multiple <br />local generation and storage assets (e.g., PV arrays, wind turbines, diesel generators, combustion <br />turbines, fuel cells, battery systems, and CHP) can be designed to provide onsite generation for local <br />loads whether connected to the regional electrical grid or operating independently from the grid. In <br />the event of grid failure, such as the TCAAP substation disconnecting power from Xcel Energy, power <br />can be provided through a combination of generation sources within the site (solar PV, CHP, battery <br />storage, etc.). All microgrid options require the use of a control system that can integrate and manage <br />power generation to meet demands and dispatchable sources of power. Dispatchable generation <br />includes power sources that can be turned on or off or can adjust their power output on demand. <br />By allowing multiple generation assets to provide power for a common load, microgrids greatly <br />increase both the reliability of power and its onsite generation efficiency. Typically, the greatest <br />beneficiaries of microgrids are customers with large, mission critical facilities. In addition to greater <br />energy security, microgrids offer a variety of economic benefits ranging from greater efficiency of <br />operation to the ability to facilitate participation in demand response and interruptible rate programs <br />provided by Xcel Energy.