Distributed energy resources technologies promise high efficiencies, low emissions, increased flexibility and reliability, and cost-effective and environmentally sound alternatives to the traditional utility infrastructure. Each DER application provides specific benefits to the end-user that determine the target markets. For more information about each DER market, click on the application below:
Standby Power / Premium Power
According to a study by the Electric Power Research Institute (EPRI Report 1004451, January 2003) the U.S. economy loses from $104-$164 billion annually to power outages. California has the highest costs for outages of any state with economic losses of between $13.2-$20.4 billion per year. Customers who are particularly effected by these outages, and have the highest need for standby and premium power systems include the following:
- Mission Critical Computer Systems – banks, depository institutions, other financial companies, stock markets, investment offices, insurance companies, computer processing companies, airline reservation systems, and corporate headquarters need to protect computers, peripherals, and computer cooling equipment.
- Communications Facilities – telephone companies, television and radio stations, internet service providers, cellular phone stations, repeater stations, military facilities, and satellite communication systems need to protect their computers, peripherals, antennae, broadcasting equipment, and switches.
- Hospitals and Nursing Homes – hospitals, nursing homes and other health care facilities need support for critical life support systems, medical equipment, and maintenance of critical HVAC environments.
- Large Photo-finishing Labs – large centralized photo-finishing centers need to protect their computers and photo-finishing equipment.
- Continuous-Process Manufacturing – paper; chemicals; petroleum; rubber and plastic; stone, clay, and glass; and primary metals
- Fabrication and Essential Services – all other manufacturing industries plus utilities and transportation facilities such as railroads and mass transit, water and wastewater treatment, and gas utilities and pipelines.
Example Outage Costs for Sensitive Customers
|Telephone Ticket Sales
|Credit Card Operations
Source: Keith Davidson, Ken Darrow, Teresa Bryson, and Bill Major, Advanced Microturbine System (AMTS) Market Study, prepared for DOE and Capstone Turbine Corporation, prepared by Onsite Energy Corporation, April 2001.
DER systems can be applied for a limited number of hours per year to shave the peak power demand. With separate demand and energy charges from most utilities, customers can often save a large part of their energy bill by controlling their peak demand. Customers with high daily peaks or poor load factors, such as office buildings and retail stores with nightly shut-downs, fit into this category. However, any customer regardless of load-shape or other factors can effectively implement peak shaving if the peak period electric rates are very high relative to the off-peak and average rates.
An example customer in San Francisco with time of use rates sees peak period power costs of $0.23/kWh while off-peak costs are $0.06/kWh. The maximum benefit for the system occurs during the peak period.
Combined Heat and Power
There is 7,646 MW of installed CHP capacity in the U.S. in sites below 25 MW of capacity. About 18% (1,363 MW) is in the State of California. The raw materials and industrial sectors together account for a little more than 2/3 of total installed capacity, while the commercial and institutional sectors account for a little under 1/3 of total capacity. The top CHP users in California are shown in the figures.
Combined Cooling, Heating and Power
In many commercial markets, there is not enough year-round thermal load to effectively utilize the thermal energy from a CHP system. In these applications, the cooling load can be supplied by an absorption chiller or in some cases a desiccant dehumidification system with the heat supplied by the CHP system.
For commercial markets such as food service, retail, office buildings, grocery stores, administrative buildings, and other low thermal/high cooling markets, the addition of thermally activated cooling can often provide enough cooling load to make a combined cooling heating and power system economically viable. The figure below shows the increase in thermal load that is achieved by converting the air conditioning load from electricity driven to thermally driven.
Comparison of thermal Loads for 250,000 square foot office building using thermally activated cooling.
DER can promote the economic use of waste or renewable fuels. DER markets for resource recovery include:
- Sewage Treatment Plants
- Municipal Solid Waste
- Animal Feedlots
- Other Agricultural Wastes
- Oil and Gas production and transportation
- Black liquor recovery and use of wood waste at pulp and paper mills.
Residential customers can implement DER systems in many of the same applications as have been discussed for larger markets such as standby power, peak shaving, combined heat and power, energy savings and sell back to the grid. The sector is discussed separately because the scale of these markets is on the order of 3 to 30 kW, and the technologies utilized are less established than DER in larger sizes.
Support for DER in the residential market is gaining among affluent U.S. consumers. A recent national survey found measurable interest in customer-site generation within this group:
- More than half reported their power usage had increased over the past five years
- 31% expressed interest in generating on-site power
- Nearly 10% had purchased or leased an emergency or back-up generator for primary residence
- 16% used such equipment in weekend or vacation homes
- 40% were considering purchasing a generator
Congress is also becoming interested in this issue. The Home Energy Generation Act, introduced in 1999, is aimed at setting standards to encourage the development of residential distributed energy technologies.
Survey of 838 households across the nation with annual incomes in excess of $50,000, conducted by RKS Research & Consulting in July-Sept. 2000.