The ABC's of DG

Distributed generation is a most interesting concept in that it benefits those who employ it— and eventually benefits those who don't, albeit to a lesser degree. The benefits to those who choose to generate are obvious: lower energy cost, more continuous power availability, and in many instances, cleaner power than what is commercially available.


Distributed generation is a most interesting concept in that it benefits those who employ it— and eventually benefits those who don't, albeit to a lesser degree.

The benefits to those who choose to generate are obvious: lower energy cost, more continuous power availability, and in many instances, cleaner power than what is commercially available.

End users who don't generate on site benefit as well, because utilities avoid further investment in generation and transmission that would otherwise be required as a result of growing demand. Of course, additional utility investment means higher utility rates for all.

Hooking It Up

There are two ways to approach DG. The first is to assign a certain amount of standby power to a load curtailment program. In this way an end user receives payment—often in the form of an electric bill reduction—for having DG available to serve in-house loads when the local utility power is scarce or unavailable.

The second way is to build a facility specifically for DG. This can be simple-cycle generation, or more preferably, cogeneration. The advantage of cogen is that it makes use of the waste heat that accompanies the generation of electricity.

A distributed power plant can exclusively serve its host, export power to the grid or do both. Employing a system that serves the plant's host, as well as other customers on the grid, offers the greatest value. It makes its power available to the greatest possible degree.

However, one difficulty is that connecting to the utility grid often creates complications both for the generator and the utility, and utility interconnection is necessary if the distributed power plant intends to provide power to the grid or if the facility requires connection to the grid for any level of electrical support.

On the other hand, if all that is required is grid support for the distributed plant's host load, this can be achieved with a simple transfer scheme. However, if the nature of the host load is such that the interruption of power flow during transfer will be intolerable, then continuous utility interconnect is necessary. In these cases, this complicates the service connection, and at times, grid disturbances can cause the distributed plant to shutdown. I have even heard of instances where, after causing the distributed plant to shutdown, the utility attempts to charge the customer the high electric rate associated with standby use, even though the utility itself was the cause of the shutdown.

Nevertheless, it is the case that a continuous plant interconnection to the utility causes concerns on the part of the utility. For example, some utilities claim that this connection creates safety issues with regards to maintenance. Others are concerned that the power being provided from an on-site generator, and subsequently sent on to other utility customers, may not offer an adequate level of power quality. Another utility concern is that the power from an on-site generator will cause substation circuit breakers to misread added interrupting capacity, bringing the total interrupting capacity beyond the circuit breakers' rating.

In any case, many design engineers view these issues as efforts on the part of the utility to thwart competition because there are engineering solutions to these problems. So, in reality, interconnection should not be discouraged but rather recommended by the utility.

In the past, utilities sought to keep distributed generators offline in order to maintain a generation monopoly. However, with deregulation, this is no longer the case. Now, their current financial concern is receiving appropriate compensation for the distribution facilities used by the distributed generator to either support its load during outages or to export capacity to other utility customers. Consequently, public utility commissions are hearing arguments concerning the appropriate charges for use of these facilities. The utilities want them set high, arguing that they must build the same facilities for occasional use as they do for ordinary customers who use the facilities continually. On the other hand, distributed generators want the rates set low, arguing that the impact of a group of distributed generators on electrical distribution, except at their points of service, is low since it is unlikely that more than one or two generators will need to use the facilities at any single time.

Even though there can be a few things to work out, not all distributed generators are forced to deal with these struggles. For example, certain types of equipment are permitted to solidly interconnect to most utilities with less elaborate interconnect requirements, such as very small distributed generation facilities; small generators using induction generators; and photo-electric and fuel cells which attain AC power through inverters.

Looking at Load Curtailment

One way to really make distributed generation pay off is utilizing load curtailment. Payment for utilizing a standby plant for this purpose can come directly from the local utility or from the independent system operator (ISO) that is responsible for generation and transmission dispatch. It is necessary to apply and subscribe to the utility or ISO in order to participate in such a program.

The easiest way to hook up a standby generator is to simply connect the load that would be backed up by the generator during power outages. By tripping the breaker ahead of the transfer switch, the generator will start and pick up those loads. It's important to check to make sure that it is acceptable to handle the few-second outage that accompanies the transfer from and back to the utility. It may be wise to add an additional transfer switch because certain loads, which must be exclusively on standby power when the utility is truly unavailable, may not be on when using the generator for load curtailment. Examples of these types of loads are the fire pump, stair pressurization fans and smoke exhaust fans. Arranging substitute loads for them during load curtailment use will maximize the profitability of distributed generation.

Air-conditioning loads during the summer months are ideal loads to place on the generator for curtailment purposes because these loads are unaffected by short-term outages. Of course, the controls must be arranged to restart equipment after the brief outage accompanying the transfer.

Another issue which must be considered when using diesel equipment for load curtailment purposes is the environmental requirements such as emissions limitations. Engine noise, which may be tolerable during power outages, may be unacceptable when the utility is available.

Worthwhile Endeavor

Income opportunities from load curtailment are so lucrative that they almost make it worthwhile to install a standby generator for that purpose. Certainly, this should be taken into account by anyone planning a standby generator installation. However, a word of caution: Load curtailment income opportunities may be reduced or eliminated in future years as more large-scale generation is put into service.

Nevertheless, distributed generation may be a very wise investment and one worth investigating. And armed with information about utility interconnect concerns, the budding distributed generator will be one step ahead of the game when it comes down to negotiations.

One of India's leading manufacturers of refrigerants was looking for more reliable power. The firm, Gujarat Fluorochemical Ltd. had two problems: first, it was experiencing up to four outages per month that constantly interrupted its 45-day refrigerant gas production cycle. Second, the worldwide phase-out of CFC refrigerant had reduced production and sales, forcing the company to look for ways to save money.

GFL wanted a power system that could handle a manufacturing process that required electricity, steam and chilled water. Finally, for the most cost-effective operation, the system also had to be capable of running on a variety of fuels.

"We also wanted a solution that would require minimum water uses, because we are located in an area of India where water shortages are a constant problem," says D.K. Sachdeva, vice president and managing director of GFL.

What company officials finally decided on was a cogeneration system that includes two 1,500-kVA diesel generating sets with remote radiators, a heat-recovery boiler and a command system for paralleling with the utility. The gensets are rated for a combined 2,100 kW on a continuous basis. They can operate on diesel fuel, light diesel fuel or superior kerosene oil.

When the engine/generators are operating, the exhaust-gas heat-recovery boiler produces 2,000 lbs. of steam per hr. at 12 bar for manufacturing processes. The gensets are also equipped for the option of running a chilled-water generator with energy from the engine cooling jacket.

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