95 Reliability Restructuring and DG

One important factor conditioning the development of DG is the impact of EUIR on electric reliability. As a general matter, and acknowledging that

* See the October 15, 1998 issue of Public Utilities Fortnightly ([email protected]).

** EPAct made it possible for the globalization that now characterizes the electric industry. Foreign companies, notably from England and Scotland, are buying major American utilities.

*** See Resources Date International, Boulder, Colorado.

1 The author has prepared a PowerPoint comparison that reinforces what has become clear to energy analysts over the past several years.

there are many exceptions to this view, the broad base of customers, especially residential and commercial customers, probably prefer not to risk reliability problems resulting from a trade-off for lower rates. However, EUIR advocates have stated that restructuring will not only lower rates, but reliability will be enhanced with restructuring. Yet, if EUIR advocates are right about reliability getting better, higher utility-delivered electric reliability could make DG less attractive. This is because the motivation to have higher reliability* that results in installing DG, particularly in a growing number of high-tech companies where high reliability is of critical importance, could be achieved via a more reliable utility. It is also possible for competitive suppliers to use DG to achieve this increased reliability.

The new conventional wisdom suggests that the apparently more costly traditional engineering and regulatory approach of ensured reserve margins is being displaced by a market approach to valuing reliability, among other ancillary services, through pricing mechanisms. This sounds fine, and everyone involved hopes that the displacement works as projected. But if reliability suffers, and if the problem is tied, or perceived to be tied, to cost-cutting utilities (preparing for competition) who have not hired, retained, or adequately trained the necessary personnel to ensure reliability, the reaction could be swift. It could take the form of municipal lawsuits (in response to reliability problems in New York City, San Francisco, and Chicago in 1998 and 1999). The reaction could also be an attempt to reject the market approach and go back to the engineering/regulatory approach. This, of course, will be very difficult to do.

As is often the case, when system reliability problems are a result of inadequate generation during the peak hours, the deployment of DG could come into play. When coupled with sophisticated electronics that dispatch the distributed generation's output to the grid, DG can enhance reliability, and possibly do so at a price less than investing in peaking units used only during the few hours when the system peaks.

One manufacturer of electronics equipment** states:

By upgrading and expanding current — and very familiar — interrupt-ible-rate programs, utilities can add 100 to 400+ megawatts to their power supplies in each major metropolitan area in just a few months. When the customer's new control system receives a "dispatch" command from the utility, it automatically starts the generator, allows it to warm up properly, brings it up to speed and precisely synchronizes the generator's frequency, phase and voltage with the grid, closes a breaker to "lock on" to the

* A benchmark market assessment, performed by RKS Research & Counseling, a nationwide polling and market research firm, finds one-quarter of American businesses troubled by sporadic power interruptions (blackouts) and fluctuations (brownouts). They claim that close to a quarter of national accounts — America's largest and most energy-intensive national franchises and chains — are currently exploring options for generating their own electricity. The survey states that more than two-thirds of these customers have already taken some actions on their own to mitigate power interruptions.

** See www.encorp.com.

grid (referred to as "parallel" operation), and then gradually ramps up the generator output to transfer load off the grid and onto the generator. If this is technically sound, and the regulator (or market) knows this is a better deal than investing in peaking units, we should expect it to happen. The 100 to 400 megawatts referenced is an estimate of the number of existing back-up generators that could be aggregated into a "virtual power plant" distributed throughout an approximate 5000 megawatt peak load metropolitan area.

Solar Stirling Engine Basics Explained

Solar Stirling Engine Basics Explained

The solar Stirling engine is progressively becoming a viable alternative to solar panels for its higher efficiency. Stirling engines might be the best way to harvest the power provided by the sun. This is an easy-to-understand explanation of how Stirling engines work, the different types, and why they are more efficient than steam engines.

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