Managerial guidelines for microgrids in an urban context; demonstration at Karlastaden

Examensarbete för masterexamen
Master's Thesis
Design and construction project management (MPDCM), MSc
Persson, Anton
Tauson, Jacob
In 2050, the goal is to achieve net-zero emissions globally thus investments in renewable energy sources are speeding up to reach this goal. However, renewable energy sources face many challenges where the intermittency problem is one of the main concerns. Microgrids have the potential to reduce this problem and additionally increase the value streams for the real estate owner. The aim of the thesis is to conceptually design managerial guidelines for evaluating the financial feasibility of microgrids. The definition of microgrids in this thesis is an external grid connected low-voltage grid with energy production and storage technologies in a local urban area. In this thesis, PV cells, wind turbines, battery storage systems and hydrogen gas are evaluated technologies in the microgrid context. Project or business developers can decide how to evaluate important factors and the financial feasibility for a specific project through these guidelines. The guidelines and financial evaluation model are developed based on a qualitative strategy with abductive approach through a literature review and interview study. The guidelines are tested and applied at an urban project in Gothenburg, Sweden, called Karlastaden. Predictions on costs and revenue variants were analysed separately for this regional context. The levelized cost of energy (LCOE) estimations were based on gathered data and compared with Karlastaden‘s own initial evaluation. For electricity production, the revenue is dependent on sharing electricity freely without energy tax and electricity transmitting fees thus increasing the marginal revenue per kilowatt hour. Whereas electricity storage has three main revenue streams from peak shaving, spot price arbitrage and ancillary services. Prediction on revenue is based on compound annual growth rate (CAGR) for spot price, expected inflation rate and a logarithmic transformed linear equation specifically for ancillary services. The data is analysed by importing data into a MATLAB script and varying the compound annual growth rate in three different cases with varying discount rates. The net present value for every revenue variant is calculated, by reducing the discounted revenue with LCOE, to estimate the profitability of Karlastaden‘s microgrid potential. The test at Karlastaden implied that wind turbines, PV cells and battery storage with FCR-D down ancillary services are the most profitable revenue variants determined by highest net present value. However, all revenue variants in the MG are profitable investments except peak shaving and spot price arbitrage. To conclude, the managerial guidelines give the project or business developer tools for evaluating the important factors to consider when designing a profitable MG. Whereas, the test at Karlastaden can be viewed as a demonstration of how to use the guidelines.
microgrid, iinvestment, renewable energy, management, guidelines, property development
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