EEI: Distributed Power, Kyoto A Boon to Gas
Distributed generation and mandates of the Kyoto protocol could
mean great things for gas demand and are reason enough to make the
industry super bullish, according to the Edison Electric
Institute's (EEI) Charles Linderman, director of fossil fuels,
renewable energy and rail policy.
"I challenge all of you to think not of 30 Tcf as the ultimate
goal, as a ceiling, [for gas demand] but as potential for future
"There are wonderful opportunities for thermal, gas-based
technologies ahead, but not very far ahead. And the implications
for both the gas industry and the electric industry are enormous,"
Linderman told attendees Tuesday at the Ziff Energy North American
Gas Strategies Conference in Houston.
As an example, Linderman said Allied Signal is planning to
produce 3,000 gas-powered 75 kW microturbines a month beginning
this June, and GE Fuel Cell Systems and New Jersey Resources
recently announced a joint venture. Despite technological advances,
deregulation, environmental and reliability pressures making
distributed generation more attractive, there are obstacles,
"Microturbines take a little more pressure than may be generally
available on the [local] system. We are in early discussions with
AGA [the American Gas Association] about what's the obligation to
serve requirement of the gas LDC if somebody has put in a gas-based
distributed generation unit. Do they have to serve in times of
stress?" EEI and the Gas Research Institute (GRI) are studying
application of distributed generation and seeking to overcome cases
where distributed generation could not be sited due to constraints
on gas supply. Linderman said power grid issues, such as
interconnection standards and market timing and load requirements,
also need to be worked out.
Distributed generation is attractive as a back-up supply of
electricity to businesses such as grocery stores, which need an
uninterrupted stream of power to prevent food spoilage, Linderman
said. Distributed generation also is seen as politically attractive
as it can enhance electric system reliability, he said.
Specifications of the Kyoto protocol - renewable energy
requirements notwithstanding - are good news for the gas industry,
Linderman said. EEI is completing an analysis of the protocol's
impact on the gas market. The institute's base case scenario would
boost gas to 25% of the U.S. power generation mix by 2010. A high
case has gas taking 48% of the generation mix by 2010. Gas demand
could hit 34 Tcf by about 2009. Linderman said. A scenario for
generation demand factoring in Kyoto shows gas holding 48% of the
generation market versus coal with 24% in 2010. Projections not
considering Kyoto show coal with 50% of the market and gas with 25%
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