Natural gas and distributed electric power should become closeallies over the next 30 to 40 years as the world transitions toless dependence on a fossil fuel-based energy economy, according toseveral microturbines developers who outlined the “opportunitiesand challenges” of decentralized electricity generation at NGI’sGasMart/Power ’99 in Dallas last week.

The fledgling industry for producing small generators of 1 MW orless still faces various regulatory and technical barriers, but AkeAlmgren and Peter Baldwin, the heads of two microturbine producers,believe several niche markets are ideally suited for theirgas-fired products, including oil field resource recovery, standbygeneration and small commercial applications among others.

The U.S. has at least “30 to 40 more years of dependence on agas-based infrastructure,” said Almgren, CEO of Los Angeles-basedCapstone Turbine Corp., noting in California alone estimates showthat a fuel-cell based energy economy would require a $5 billioninvestment in a hydrogen infrastructure to support massiveacross-the-board stationary and mobile applications of the fuelcell.

“The biggest question long term is what is the future of thefuel cell? How big an impact will it have?” he said. “In eithercase you need hydrogen or methane, which means you have toradically change today’s energy infrastructure.”

The interface of distributed power with extensive electrictransmission grids remains a major stumbling block to distributedgeneration developing on a broad basis, Almgren and Baldwin bothemphasized. “Friendly regulations,” eliminating excess charges andproviding for selling excess power back into the grid, are neededat the state level to open up opportunities for microturbines.

As president of Northern Research Engineering Corp., which isdeveloping a pre-commercial gas-fired microturbine, Baldwin said hedoesn’t think regulated utilities should be able to get in thedistributed generation business. “That’s sort of like letting thefox in the hen house,” he said, but he added it would beappropriate for a non-monopoly utility affiliate to compete in thissector. He sees this already occurring on a larger scale with thegas-fired combined-cycle merchant plants in the 500-MW range thatare popping up all over the country as a form of “distributedgeneration,” albeit on a larger scale.

The market opportunities for distributed power exist already,according to the two executives. “Worldwide each year there areanother 55 GW of electricity capacity being added, and about 20% ofthat is in the range of 1 to 10 MW [reciprocating engines],” saidAlmgren, noting that additionally there is significant growth instandby power that doesn’t even get counted officially as “newcapacity.”

In addition to standby power, opportunities include landfill gasand use of sour gas in oil fields using the flared gas to powerbanks of microturbines, and there also is the replacement of addedtransmission/distribution (T/D). Almgren cited Capstone’s ownexperience, selling units to oil field producers in Canada andWyoming, and in using their own product at their southernCalifornia manufacturing facilities in lieu of spending severalmillion dollars for T/D enhancements by its local utility.

“I think transmission and distribution is a driver towarddistributed power,” Almgren said. “There is growing concern aboutthe reliability and availability on the power grid. The faster wemake the microturbines the more sensitive people become.”

The so-called T/D function represents a niche market fordistributed power in the sense that today’s relatively costlyprocess of adding T/D can be supplemented more inexpensively byturbines, according to Almgren, who cites $1 million-per-mile asthe cost of new 500-KV transmission and $400-$500/kwh for addedT/D.

Richard Nemec, Dallas

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