Distributed Generation To be Boon For Gas

Distributed generation is poised to get a boost from the Gas Research Institute (GRI) and Architectural Energy Corp., which have developed new software to evaluate the economic viability of on-site distributed generation projects for utility customers.

Called DG Pro, the software is licensed exclusively through Architectural Energy (AEC). "DG Pro offers local distribution companies, energy services companies, project developers and others a valuable new tool for evaluating and promoting on-site generation projects," said Michael J. Holtz, AEC president.

The software can access a library of information to use in evaluating viability of on-site generation for specific installations. The library includes cost and performance data for natural gas reciprocating engines, gas turbines and microturbines; electric and gas rates for utilities across the country; and prototypical building loads. The software produces color graphic sales and marketing reports on project economics.

With the vast majority of future distributed generation projects expected to be powered by natural gas, DG Pro will promote expanded gas use if it promotes more distributed generation. "Natural gas is going to be a big winner. There's no doubt. Most of the distributed technologies right now are gas-fired technologies," said Sarah McKinley, executive director of the Distributed Power Coalition of America.

According to a 1998 GRI report on policy implications of its baseline U.S. energy supply and demand to 2015, there was very little gas fired capacity that could be classified as small power generation - only about 2 gigawatts - in 1996. By 2015, however, small generating capacity is projected to grow to almost 26 gigawatts, driven mainly through growth in distributed generation.

Among things needed for distributed generation to take off is exemption from exit fees or stranded cost recovery mechanisms, which inhibit distributed generation, said Paul Bautista, principal product manager for energy conversion for GRI. Also, transmission tariffs that reflect the true cost of transmission would aid identification of opportunities for distributed generation. Another aid to distributed generation would be more relaxed and uniform standards - from utility to utility - for connection to the power grid. "A lot of these requirements are more applicable to a large central power plant and can impose an undue financial burden on a [distributed generation] project. Due to their small output capacity, a lot of projects are decided on simple payback. Any additional costs will impact these projects more so than a larger project."

Bautista said there is a lack of information in the marketplace about the benefits of distributed generation. This summer, GRI contracted for four projects that are real applications of distributed generation. Performance of the projects was monitored, and GRI is examining the results to determine the best practices for distributed generation operation. GRI also has joined with the Electric Power Research Institute (EPRI), offering energy companies the opportunity to invest in distributed generation research.

"[Distributed generation] allows for LDCs to participate in the power generation market," Bautista said. "I think it's going to be the wave of the future given restructuring and the movement of generation closer to the load center. I think in an unregulated market, very few will take the risk of building a multi-hundred megawatt plant, at least here in the U.S."

Joe Fisher, Houston

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