distributed generation: onsite power options world environment center 3 rd gold medal colloquium...
TRANSCRIPT
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Distributed Generation:Onsite Power Options
World Environment Center
3rd Gold Medal Colloquium
“Energy and the Environment: Engineering Sustainable Growth”
May 17, 2001
Paul Bautista
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What is Distributed Generation?
• Small scale generation resources
– less than 25 MW
• Located at or close to the load
– Customer
– Utility
– Third party
• Retail market play
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The New Energy Market
Customer Choice in a competitive climate
Regulatory Change facilitates competition
Product Portfolio enables customer & provider choices
The basis of the new business is providing value with customer-focused solutions
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Why the Interest in On-site Power?
• Restructuring is opening access to the electric grid system
• Customers have greater awareness of energy costs and options
• Technology improvements enhancing performance & economics
• ESCOs & ESPs opening path to market
• Federal and state government taking action
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Opportunities for Wide Range of Stakeholders
• Customers– Productivity
– Energy cost
– Reliability
– Flexibility
• Electric Utilities– Deferral of T&D
investments
– Grid Management
– Customer retention
• Gas Companies– New load
– Load management
– New energy service
• Local Governments– Attract new manufacturing
and other businesses
– Maintain competitiveness
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Policy Maker Interest
Increased energy efficiency
Reduced environmental impact
Climate change mitigation (CHP)
Improved reliability of the grid
Lower/Stable energy costs
Customer choice
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Building an Economic Model
CapacityCost
EfficiencyReliabilityEmissions
O&M
DemandLoad Shape
Thermal DemandRisk Preference
Opp. Cost
Electric PriceOther TOS
Fuel Price and Avail.Power ReliabilityUDCo Attitude
Regulation$ Agents
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DG Technology
• Reciprocating Engines (30 - 6,000 kW)
• Industrial Gas Turbines (500 - 20,000 kW)
• Microturbines (25 - 300 kW)
• Fuel Cells (3 - 3,000 kW)
• Renewables - photovoltaics, wind (1-1,000 kW)
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Reciprocating Engines
• Established technology, most common prime mover in the world, distribution channels in place
• Gas-fired spark ignition engines appropriate for CHP, peak shaving, and direct drives less than 10 MW
• Diesel engines most common for standby, emergency, and remote applications
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Combustion Turbines
• Small turbines (1-30 MW) established technology for many power and direct drive applications
• Fuel flexible but economics and emissions favor natural gas• Good for CHP applications requiring high quality steam in industrial
and large commercial applications
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Microturbines
• Emerging technology for commercial rollout occurring now
• Simple designs with few moving parts
• Distribution, marketing, and service opportunities still exist
• Good for both small CHP, power only, peaking, and even standby
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Fuel Cells
• Electrochemical power production with a space-age heritage -- inherently efficient and clean
• PAFC in early market applications -- many with economic subsidies
• Other technologies to emerge in the next 5 years -- market opportunities exist
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Photovoltaics
• Technology is available for commercial application
• Costs are high, Federal and State subsidies are available
• High costs limit applications to niche markets -- remote areas and environmentally sensitive sites
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Wind Power
Size range: 50-1,000 kW
Start-up time: n/a
Commercially available
Visual, noise and wildlife impacts
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DG Applications
• Combined Heat and Power (CHP)
– Established market, with renewed interest
• Peakshaving and Peak Sharing
– Potential growth market
• Premium Power
– Ultra-high reliability and power quality
• Standby
– Predominantly a diesel market
CHP &Quality Power
Arbitr
a
ge
Anci
llary
Serv
ices
Backup &Peaking
Load
Cen
ter
Supp
ort
ISO Energy Service Provider/PX
Substation
Remote
Power
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Combined Heat and Power
• CHP systems sequentially produce electricity, thermal or mechanical energy
• Sites have continuous thermal use
• Thermal energy is typically LP/HP steam, hot water
• CHP boasts energy utilization efficiencies up to 85%
• CHP is an important part of the DG application mix and very attractive from an energy policy perspective
• CHP Challenge to double US CHP capacity
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CHP Efficiency AdvantageBoiler
Central Power Plant
DG/CHPFuel
Fuel
Fuel Heat
Power
Combined Heat and Power up to 85% efficient
50% efficient
CHP systems sequentially produce electricity, thermal or mechanical energy. Sites have coincident thermal demands. Thermal energy is typically LP/HP steam, hot water. CHP boasts energy utilization efficiencies up to 85%
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Combined Heat & Power
• Criteria for Commercial/Institutional Sectors– Relatively coincident electric and thermal loads
– Thermal energy loads in the form of steam or hot water
– Electric demand to thermal demand (steam and hot water) ratios in the 0.5-2.5 range
– Moderate to high operating hours (>3000 hours)
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Commercial and Institutional Market Segments
Application Electric Demand Thermal Demand
Hotels/Motels 100 kW – 1+ MW Domestic hot water, space heating, pools
Nursing Homes 100-500 kW Domestic hot water, space heating, laundry
Hospitals 300 kW – 5+ MW Domestic hot water, space heating, laundry
Schools 50 – 500 kW Domestic hot water, space heating, pools
Colleges/Universities 300 kW – 30 MW Centralized space heating, domestic hot water
Commercial Laundries 100 – 800 kW Hot water
Car Washes 100 – 500 kW Hot water
Health Clubs/Spas 50 – 500 kW Domestic hot water, space heating, pools
Country/Golf Clubs 100 kW – 1 MW Domestic hot water, space heating, pools
Museums 100 kW – 1+ MW Space heating, domestic hot water
Correctional Facilities 300 kW – 5 MW Domestic hot water, space heating
Water Treatment/Sanitary 100 kW – 1 MW Process heating
Large Office Buildings 100 kW – 1+ MW Domestic hot water, space heating
Extended Service Restaurants 50 - 300 kW Domestic hot water, absorption cooling, desiccants
Supermarkets 100 – 500 kW Desiccants, domestic hot water, space heating
Refrigerated Warehouses 300 kW – 5 MW Desiccants, domestic hot water
Medium Office Buildings 100 – 500 kW Absorption cooling, space heating, desiccants
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Source: Hagler Bailly, OSEC
Natural Gas Is the Preferred Fuel for CHP
• Existing CHP Capacity: 52.8 GW
Natural Gas64%
Coal16%
Oil3%
Wood4%
Waste9%
Other4%
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Other Industrial
20% Commercial and Institutional
9%
Industrials Represent 90% of Existing CHP
• Existing CHP Capacity (1999) 52,800 MW
Paper16%
Chemicals31%
Food9%
Refining13%
Metals5%
Source: Hagler Bailly, OSEC
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Recip Engine2%
Boiler/ST34%
Gas Turbines Dominate Capacity
• Existing CHP Capacity: 52.8 GW
Gas Turbine15%
Combined Cycle49%
Source: Hagler Bailly, OSEC
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Recip Engine48%
Boiler/ST26%
Recip Engines Dominate Sites
• Existing CHP Installations: 2167 sites
Gas Turbine16%
Combined Cycle10%
Source: Hagler Bailly, OSEC
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Global Warming Implications of CHP(lb/MWh of Carbon Equivalent)
= 10% T&D Losses
658
COAL OIL --------------- NATURAL GAS ----------------
UtilityCombined
Heat &Power
- - - - - Boiler-Steam Turbine - - - - -
CombinedCycle
Gas Turbine
557
371
252
164
AVG
Utility MixYear 2000
597
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NOX Implications of CHP(lb/MWh of NOX)
5.7
AVG
Utility MixYear 2000
5.1
Coal Oil
5 MWGas Turbine
(15 ppm)
0.27
- - - - - - Power Generation Only - - - -
2.9
4.6
(U.S. Average in Year 2000)
0.26
- - - - - - - Natural Gas - - - - - - - - - - - -
CombinedCycle
200 MW(9 ppm)
- - - Boiler-Steam Turbine - - - -
CHPFuel Cell
< 0.001
= 10% T&D Losses
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NOx Emissions of DG Technologies
Efficiency NOx EmissionsSystem (LHV) (gm/bhp-hr) (gm/kW-hr) (lbs/MWhr) (ppm) (lbs/mmBtu input)
ATS Gas Turbine 0.38 0.20 0.26 0.6 15 0.06
ATS Gas Turbine 0.38 0.12 0.16 0.3 9 0.04
Diesel Engine 0.42 4.5 6.0 13.3 378 1.47
Lean Burn Nat Gas Engine 0.4 1.8 2.4 5.3 144 0.56
Lean Burn Nat Gas Engine 0.38 0.7 0.9 2.1 53 0.21
Stoic Nat Gas Engine w/TWC 0.32 0.15 0.20 0.4 10 0.04
Microturbine 0.27 0.3 0.4 0.8 15 0.06
Microturbine 0.27 0.17 0.22 0.5 9 0.04
Fuel Cell (PAFC) 0.4 0.01 0.02 0.04 1 0.004
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Source:, OSEC
Other Industrial29%
Potential for Additional Industrial CHP
Paper30%
Chemicals11%
Food9%
Refining13%
Metals8%
Estimated CHP Potential: 88 GW
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Source:, OSEC
Other11%
Potential for Additional Commercial CHP
Estimated CHP Potential: 75 GW
Health Care24%
Education27%
Food Sales/Serv
10%Lodging
7%
Office Buildings
21%
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Peak Shaving
4000 4800 8760500
Peaking Equipment20% Cap/2.5% of energy
On Peak Intermediate30% Cap/17.5% of energy
Baseload Equipment50% Cap/80% of energy
$/kWh
Operating Hours per year
.02
.1
7.00
.04
Example of Utility on peak:261 workdays/yr X 16 hr/day = 4176 hr/yr
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DG Offers Value for Growth Industries
• New Demand for Power from “Digital Economy”
• Current Power Grid may not Provide Power Needs of the new Internet-Based Economy– E-procurement, web-based enterprises and other IT
industries require 99.9999% power reliability
– “Growth in internet-quality power is expected to account for 40% of the increase in total US power demand by 2010” - BOA Securities
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Standby Power
• Provide support for critical systems during a power outage
• Required by hospitals and some other critical life and safety applications
• Also used by customers with very high outage costs
• Two 450 kW diesel gen-sets shown here in the mechanical room of an Albuquerque hospital
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DG Urban Profile – INGAA Foundation
• Need for New Capacity– Residential Growth
– “New Economy” Industrial and Commercial Markets
• Constrained Power Delivery System– DOE POST Report highlights Reliability Concerns
• Environmental/Air Quality Environment
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DG Urban Profile – INGAA Foundation
• Electric Rate Structures Favorable to DG– Standby and Backup– Applicability of Competitive Transition Charges– Clear Price Signals to Customers
• Availability of Natural Gas• Regulatory Incentives
– PBR– Recognition of all DG Value Streams
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DG Urban Profile – INGAA Foundation:Potential Emissions Reduction1
Chicago, Illinois Austin, Texas
Potential NOx Reduction(Thousand tons per year)
12.7-31.2 1.7-2.9
Potential SO2 Reduction(Thousand tons per year)
49.5-127.1 3.4-5.5
Potential CO2 Reduction(Thousand tons per year)
73.0-5,580.0 246.0-1,069.0
1Emissions reductions are relative to statewide existing utility power generation capacity. Assumed T&D losses are 5% for baseload and 10% and 7% during peak for Chicago and Austin respectively.
Emissions reductions are maximized through the utilization of combined heat and power (CHP)
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Projected DG Capacity (MW) Additions
Source: GTI Baseline Projection
0
20,000
40,000
60,000
80,000
1998 2005 2010 2015
SmallCogenerators
OtherGenerators
Backup Power
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Environmental Regulatory/Permitting Issues
• Requirements differ from region to region
• Time-consuming permit process
• Lack of technology information and universally accepted standards
• Emission standards can be a moving target
The overall environmental benefits of natural gas-fueled DG are generally recognized, but at the same time individual units
must be deployed under a permitting process that places economic burdens on DG and threatens to depress market
opportunities
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Barriers and Challenges to DG
Deferral rates and practices by utilities
High standby/back-up power costs
Overly strict interconnect requirements
Stranded Cost recovery on kWh generated
Environmental benefits not recognized in permitting process
Siting and permitting delays/uncertainties
Non-core customer investment – this may change
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Conclusions• Market Conditions and Trends Favor DG
• Technologies, Customer Choice, Energy Costs
• Environmental Fundamentals
• ESCOs & ESPs Providing Alternative Paths to Market
• Federal and State Initiatives Beginning to Recognize DG Benefits and Addressing Barriers
• Current Electric Utility Resistance and Regulatory Roadblocks Hinder Widespread Implementation
• Niche Markets & Applications Evolving Around Specific DG Features
• Once Enabling Market Drivers Adequately Evolve, DG Implementation will be Robust