Distributed Generation - EPM Archives

Distributed generation (DG) is the use of small electrical power generation equipment located close to the load. Many energy suppliers and energy services companies (ESCOs) are providing end users with DG solutions to expand their energy options, lower energy cost, reduce emissions, or to add redundancy. In addition, DG equipment can power critical processes or emergency systems. Reciprocating engines were the first DG technology. Today, recips powered by diesel or natural gas are available ranging from 30 kilowatts (kW) to over 6 megawatts (MW). Recip efficiencies can be as high as 80-85% when exhaust heat is recovered. Other DG technologies include micro-turbines, combustion gas turbines, wind turbines, fuel cells, and photovoltaic (PV) cells. Micro-turbines range from 30-400 kW and are designed for continuous duty. Recovering their exhaust heat (recuperated) improves efficiency. Multiple units can be staged and operated together, automatically, to extend capacity. Combustion gas turbines range in size from simple cycle units of 1 MW to several hundred MW in large CHP projects. Units in the 1-15 MW range are usually called industrial or mini-turbines to differentiate them from smaller micro-turbines and the larger utility grade turbines. Combustion gas turbines have low installation costs, low emissions, and low maintenance cost. Low efficiencies make their use for peak shaving or for CHP installations where a continuous supply of hot water or steam is needed uneconomical. Fuel cells produce direct current by feeding hydrogen and oxygen to different electrodes separated by an electrolyte. Fuel reformers that convert various hydrogen-rich fuels, such as propane or natural gas, to hydrogen add to the initial cost. Stacked units can provide up to 3000 kW. Wind turbines continue to improve in efficiency and installed cost. Packages include a rotor, generator, turbine blades, and a drive-coupling device. The speed of the turning rotor is changed to match the operating speed of a generator. Wind turbines are being used to supplement power supply to the grid in windy areas and in remote locations to offset the need for transmission or distribution investment. Photovoltaic cells?solar panels ?may find widespread use in the future, especially for projects that can sustain longer paybacks. PV cells produce direct current (DC) from solar radiation. PV systems do not produce emissions and provide high reliability with low maintenance cost. Efficiencies up to 24% have been demonstrated in the laboratory, although the highest efficiency in field use is 10%. Expected improvements will lower cost per kilowatt. The most common PV applications are in areas remote from the power grid, where their use eliminates the need for transmission. A table comparing these DG technologies can be found at: www.distributed-generation.com/technologies.htm. Applications DG technologies can produce electricity almost continuously year long in stand-alone applications or interconnected to the grid. The cost of utility-provided power, equipment installation cost, fuel cost, maintenance cost, and reliability and power quality requirements affect project economics. Emissions, especially in non-attainment areas, can also effect economics and choice of DG technology. When DG equipment is connected to the grid, a transfer switch can sense a grid failure to bring a generator on-line. This configuration, called dual mode, utilizes an inverter with batteries to provide power during the transition. Some DG applications are also cogeneration applications in which waste heat from the DG is used to generate steam or hot water for use in thermal processes. DG can also be a cost-effective way of peak shaving. Peak-shaving units operate infrequently, often less than a thousand hours annually. Selling power to the utility through a grid connection is possible in states that qualify end-users for net metering. Eligible customers may sell their excess power at the same retail price, if they purchase power from the grid during other periods. Increased reliability is the incentive that has encouraged the use of DG for standby and emergency power. Estimated cost of down time. Cellular Phone Companies ? $41,000/hour Telephone Ticket Sales ? $72,000/hour Airline Reservations ? $90,000/hour Credit Card Operations ? $2,580,000/hour Brokerage Operations ? $6,480,000/hour Regulators find DG attractive because it can increase system reliability, reduce the cost of producing energy, and defer or reduce transmission and distribution investments. Presently there are few regulations dedicated to DG applications. Most state public utility commission rules require case-by-case review, and some rules are based on old technology that regulates the interconnection of emergency generators, cogeneration, or large central plants. Local access and metering requirements determine if DG projects are allowed to access the grid and, if so, how payment is made. The cost-setting debate can also be influenced by a state that decides to subsidize DG for environmental policy, for example. Utilities are proposing ways of recovering their costs for use of the T&D system, providing system reliability, and conducting engineering studies. The fees include standby demand charges for backup service, disconnect fees, and stranded costs or competition transition charges (CTC). DG installers commonly believe they pay too much for these services. Both parties agree that an on-site meter may be required to measure the output of the DG to determine the departing load and demonstrate what level of running reserve the utility must provide should the DG go down. However, standby charges may also be based on the nameplate rating of the generator. Under either system, the standby fees range from $1/kW per month to $8/kW per month, depending on the utility. Exit fees imposed on departing load also vary greatly. Grid interconnection standards that clarify engineering and safety requirements and tariffs relating to use of the T&D system improve the environment for DG. Federal Energy Regulatory Commission (FERC) rules should allow DG to routinely carry load to improve overall reliability.