I. Introduction

As the penetration of distributed energy resources and distributed smart microgrids in the power market gradually increases, Europe and the U.S. are actively moving towards maximizing distributed renewable energy and enhancing grid resilience. Smart microgrids, due to its maximization of sustainability and grid resilience through local production and consumption of renewable energy, have become a key topic in energy transition, particularly in the context of the 2050 net-zero emission trend. The analysis of microgrid policies, regulations, and supporting measures is crucial in creating win-win business models among stakeholders. Thus, it is worthwhile to gather and summarize the development paths of advanced countries and apply relevant insights to Taiwan's energy and electricity policy-making process.

This article uses the development of U.S. microgrids as an example to analyze related policies and regulations, explore the market positioning of microgrid clusters of distributed renewable energy, and its structural impact on the electricity market. Furthermore, it provides policy implications for Taiwan's development of net-zero carbon emission microgrids.

II. U.S. Microgrid Case—DERConnect

With the rapid development of 5G + EIOT (Energy Internet of Things), advanced countries are actively developing microgrids. In the U.S., aside from energy trading projects such as Santa Rita Jail in California and the Brooklyn Microgrid project in New York, featuring "solar energy + storage + blockchain," the most notable is the University of California, San Diego (UCSD). The UCSD Microgrid system is currently building a DERConnect testing platform for distributed energy resources (DERs), which include solar panels, energy storage systems (ESS), electric vehicles (EV), and building energy management systems (EMS, for independent power and thermal systems).

The UCSD Microgrid not only provides diverse services to UCSD, but also saves up to $8 million in energy costs in a single year (based on 2018 estimates), meeting 85% of the campus’s electricity demand, 95% of its heating needs, and 95% of its cooling needs, while also reducing 75% of standard emission of pollutants. This microgrid system not only saves electricity costs and achieves power stability but can also operate in island mode to ensure grid security. In addition, UCSD's Point Loma Wastewater Treatment Plant provides purified methane, which is injected into the existing natural gas pipeline to supply two large fuel cells for both UCSD and the city of San Diego, supporting city electricity needs while fulfillng UCSD's University Social Responsibility (USR).

The DERConnect platform, having received funding from the U.S. National Science Foundation in 2020, will be completed and implemented at UCSD by 2025 to help understand how renewable energy resources can be integrated into electricity grids. Although the number and diversity of distributed energy resources in the UCSD Microgrid are increasing, concerns over safety, reliability, and cost hinder the use of these resources. DERConnect represents an all-inclusive platform that can be used to test innovative business models and their algorithms in practical applications.

DERConnect will include more than 2,500 distributed energy resources or terminal devices in the campus microgrid, including fuel cells, solar panels, various types of buildings (such as classrooms and office buildings), and 300 electric vehicle charging stations. In addition, an energy storage integration lab is being built. The platform’s design allows for different test options and parameters, including island mode, cybersecurity testing, and plug-and-play options. As a comprehensive grid platform, DERConnect covers different user groups (such as office buildings and parking lots). From a social science perspective, the platform can be used to study how variables like cost, energy savings, and comfort affect user choices.

III. Analysis of U.S. Microgrid Policies and Regulations

1.FERC ORDER 2222

On September 17, 2020, the Federal Energy Regulatory Commission (FERC) issued Order 2222, requiring all independent system operators (ISOs) and regional transmission organizations (RTOs) to implement reforms within 18 months. This order aims to enable distributed energy resources (DERs) to participate more effectively in electricity markets managed by regional grid operators. DERs include battery storage systems, rooftop solar panels, electric vehicles, and their charging infrastructure. These resources can be placed in commercial buildings, churches, non-profit organizations, community centers, etc.

FERC Order 2222 requires seven ISOs/RTOs to revise their market participation eligibility and the pricing mechanisms for supply side and demand side. Specifically, it can be summarized into the following ten regulatory measures:

（1） Allow DER aggregators (DERAs) to participate in energy wholesale, ancillary services, and capacity markets within their ISO/RTO, and recognize DERAs as qualified market participants;

（2） Allow DERAs to participate in one or more trading models based on their physical and operational characteristics;

（3） The minimum size of a DERA required by an ISO/RTO should not be more than 100 kW;

（4） Define locational requirements for DERAs;

（5） Establish bidding parameters and rules for distribution system impacts related to DERAs;

（6） Set rules for the information and data provided by DERAs;

（7） Define metering and telemetry standards for DERAs;

（8） Coordinate interactions among ISOs/RTOs, DERAs, distribution utilities (DUs), and relevant electric retail regulatory authorities (RERRAs);

（9） Establish rules for DERAs to update or adjust the list or related information of aggregated DERs;

（10） Formulate various market participation agreements for DERAs.

2. Mississippi House Bill 1198 (HB1198)

On July 1, 2023, the Mississippi House passed House Bill 1198, "The Microgrid and Grid Resiliency Act," which came into effect immediately. The key points of the bill can be summarized as follows:

（1） It defines key terms related to microgrids. Specifically:

a. A "microgrid zone" means an area of designated land for which the minimum size will be set at one hundred (100) acres. Each microgrid zone shall reside within a single county and within which some statutory and regulatory exemptions from public utilities and service commissions (PUC and PSC) are available;

b. A "community-level microgrid" means an area of residential zoning which wishes to secure their energy through local generation for which the minimum size shall be set by the PUC or PSC;

（2） Either the board of county commissioners or the board of supervisors in each county may petition the Secretary of State to designate no more than three (3) areas of unincorporated (i.e., belonging to a natural person) or state land within the county constituting not less than one hundred (100) continuous acres as a microgrid zone;

（3） The PUC or PSC shall oversee individual microgrids built within and outside the microgrid zone;

（4） Notices and hearings shall be given and held for designation petitions as outlined in (2);

（5） Microgrid operators in microgrid zones must provide up to 20% of its generation in a demand response program in order to ensure grid stability;

（6） For any usage of microgrid operating capacity up to a certain amount (e.g., up to 5% or 20%), grid operators shall give advanced notice of at least a certain amount of time (e.g., 30 or 120 minutes) to microgrid operators within the microgrid zone;

（7） Microgrid operators must participate in an secondary frequency response (SFR) in order to ensure grid stability;

（8） Microgrid operators must participate in a primary frequency response (PFR) in order to ensure grid stability;

（9） Microgrid developers shall apply for a grid interconnection before it begins the development of the microgrid;

（10） When applying for approval of a microgrid, the PUC or PSC shall review the application to determine if the microgrid can meet a threshold for approval which will cover:

a. The microgrids ability to reasonably improve the local utilities electrical efficiency, resilience, reliability, and security once it has connected to the grid;

b. The microgrids ability to perform demand response and frequency response once connected to the grid;

c. Reasonable expectations to improve the clean or renewable energy mixture of the local utility.

（11） All electricity provided from the microgrid zone back to the grid or public utility for demand response shall comply with the local real-time electricity pricing, time-of-use pricing, or the local regulated electricity rates set by the PUC or PSC.

（12） The PUC or PSC shall implement and provide programs that enable communities to apply for and operate a community-level microgrid.

IV. Microgrid Cases in Taiwan

Taiwan Power Company, which manages the central power grid, supports the development of microgrids in offshore islands or for specific disaster relief purposes in accordance with its legal obligations as a vertically integrated state-owned utility. This includes the construction of disaster-prevention microgrids in remote areas, such as the seven indigenous tribal evacuation centers in Pingtung’s Wutai Township (Jiamu Village), Mudan Township (Xuhai Village, Dongyuan Village, and Shimen Village), and Shizi Township (Caopu Village, Danlu Village, and Nanshi Village), which began in April 2022 and have made progress. At the same time, Taiwan Power Company encourages high-voltage users to build behind-the-meter microgrid systems, such as the million-watt microgrids at the National Atomic Research Institute and National Changhua University of Education. These systems have been tested for free "reverse power flow" to the grid and have even participated in the auxiliary services on the electricity trading platform of Taiwan Power Company.

The microgrid in Wangan, Penghu, began construction in June 2022 and completed its initial-phase facilities in December 2022. It includes a 30kWp rooftop solar power system, a 3kW vertical wind turbine, and a 500kW/250kWh energy storage system. Subsequent installation will include 400kWp of solar power and 27kW of vertical wind turbines, aiming to turn Wangan into a low-carbon island. The microgrid located in the Guangcai Wetland of Linbian Township, Pingtung, covers 6 hectares and is the first intelligent microgrid system in Taiwan that is operated within a community. The entire area is powered completely by renewable energy, including a 78kW solar photovoltaic system, a 9.8kW wind turbine, a 60kW biodiesel generator, and a 159kW energy storage system. This microgrid is equipped with an intelligent energy control system that features energy management, demand response, and power generation forecasting capabilities. When Taiwan Power Company’s system is interrupted and the area cannot generate electricity on its own, the microgrid can switch to island mode, operating independently for 72 hours. In the case of an unexpected power outage, the microgrid can still provide electricity for basic lighting, communication, and operation of small household appliances.

The National Science and Technology Museum in Kaohsiung has partnered with Taiwan Emission Exchange to integrate top domestic companies in energy creation and conservation to jointly build the "Lighthouse Station," Taiwan’s first independent green power microgrid system. This project is constructed using a 20-foot container and is equipped with solar power generation, an energy storage system, various thermal insulation and energy-saving building materials, and an electric vehicle charging station. The Lighthouse Station can serve as a self-sufficient home for remote and mountainous areas, as well as a shelter providing electricity after natural disasters such as typhoons and floods. If expanded, the module, combining solar and energy storage systems with various eco-friendly and insulated materials, can be customized for use in homes and factories. Through the low-energy microgrid module, it allows a low-carbon society to advance towards a more secure green circular economy through energy transition.

(To be continued in the next article, covering the framework of Taiwan's current regulations on microgrid electricity trading, the bottlenecks in Taiwan's microgrid development, prospects, and conclusion.)

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