4.1. SR 10-06-1997 - Laserfiche WebLink

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INDUSTRIAL MANAGEMENT & TECHNOLOGY coming air, st) it can be made from inexpen- sive parts formed from thin steel sheets and welded together by robots. Craig is par- ticularly proud of the low-cost air bearing de- sign Capstone has patented. It suspends the shaft on a wedge of high-pressure air com- pressed during the first few revolutions at startup. Air bearings have been used in AlliedSignal's airborne air-conditioning units for decades and have a proven record. Getting rid of the pumps, filters, and other paraphernalia used in oil-lubricated bearings is well worth it, Craig says: "They account for the majority of breakdowns in aircraft sys- tems that use them." How low does the microturbine's produc- tion cost need to go'? Wensley says it starts to make sense in some utility operations at a capital cost of $500 per kilowatt, somewhat higher than that of the bigger gas turbines in widespread use. That works out to $12,000 for a 24-kilowatt machine. If the micro- turbine were produced for hybrid cars in vol- umes of more than 100,000 a year, Wensley says, the price would drop to less than $2,000. Long before it reached this figure, the elec- tric companies' interest might become down- right ardent. "Little turbogenerators have got our attention," says a manager at a major U.S. utility, who for competitive reasons asks for anonymity. "Hundreds of thousands of them could be sold to utilities, particularly if manufacturing efficiency can get the in- stalled price down to around $6,000." At some point, of course, you or I could af- ford to buy a microturbine. Are they the per- fect revenge weapon for homeowners and businesses that have always hated the local power company? Maybe, but it seems un- likely that homeowners, aside from extreme mavericks or those with bucolic hunting lodges, would want to make their own juice. Chances are, they would prefer the conven- ience and reliability of power delivered by the electric company. Still, utilities are aghast at the prospect of losing customers out "at the end of the grid," where existing transmis- sion lines are often burdened to their limit and demand continues to grow. Adding more towers, transformers, and overhead wires to serve new customers is hugely expensive. In a metropolitan region a new 220-kilovolt transmission line can cost several hundred thousand dollars per mile, not counting the cost of permits to run it over people's prop- erty. That assumes that the utility gets its way Are' micro- over neighbors who hate and even fear high-ten- sion lines, even though there's no proof that they cause cancer. The power companies have another reason to lose sleep. Under dereg- ulation, competitors could try to cherry-pick customers at the edge of the grid by setting up a few pint-size turbines near them in a vacant lot. To beat interlopers to the punch, many utilities are basing their strategy on what they call "dis- tributed generation"--installing small power plants close to users and hooking the equip- ment to the grid by short, low-voltage lines of the type that already run along many streets. That would assuage another worry: losing business customers who might be intrigued by do-it-yourself power even if homeowners aren't. "Rising rates can make self-genera- tion look attractive to a large user," reflects George Preston, a vice president at the Elec- tric Power Research Institute. "A smart util- ity is going to figure out how to keep that customer." Not surprisingly, AlliedSignal's Weinstein thinks that utility-installed micro- turbines might be just the answer. HESE LITTLE generators might also help utilities over- come a perennial challenge: meeting peak demand with minimal investment. Peak de- mand typically occurs on a hot afternoon when perspiring millions switch on their air conditioners. Even when transmis- sion capacity imposes no constraints, the electric company hates to fire up a large gas- turbine generator at such times, only to run it inefficiently for a few hours at part-throttle. Instead, it could let microturbines at local substations and at customers' factories kick in temporarily to supply the extra power. If efficient manufacturing succeeds in driving the microturbine's production cost downward and the little machines prove re- liable--two big ifs, of course--utilities could be placing substantial orders within a few years. Prabhu at Southern California Edison is optimistic. "The long-term dependability of microturbines still needs to be proven in turbines the perfect revenge weapon for homeowners and businesses that have always hated the local power company? field tests," he says, "but I think this should be achievable." Once that's done, mi- croturbine makers will be able to trumpet their other advantage: fuel flexibility. Most micro- turbines are likely to use natural gas, but if fuel prices dictate, their for- giving nature lets them run happily on liquid fuels following a simple change of fuel injectors, which takes less than an hour. Turbines are also inherently cleaner- burning than piston engines. Catalytic com- bustors, which both Capstone and Allied- Signal can build into their machines, further cut pollution. These devices combine fuel and air in a flameless reaction at tempera- tures too low for the formation of smog- spawning oxides of nitrogen. One company, Catalytica Combustion Sys- tems of Mountain View, California, is already adding catalytic combustors to mobile, bigger-than-micro-size turbogenerators. They offer another preview of how microtur- bines could be used. AGC Project Develop- ment of Tulsa has built a rolling cogeneration unit that consists of two Kawasaki gas- turbine industrial generators mounted on a 60-foot semitrailer. The generators churn out 1,500 kilowatts each and already meet some of Los Angeles' strict emission standards, with further improvements expected. AGC will sell the equipment outright, or operate and maintain it as a contract supplier of elec- tricity to a commercial user. The developing world could turn out to be another hot market for microturbines. Several of AGC's systems are supplying plants in Mexico, and a number of experts think that the simplicity and fuel flexibility of microturbines will win them many cus- tomers in remote places where the spider- webs of power grids may never be strung. Muses Prabhu at Southern California Edi- son: "One day all those villages in the Phi- lippines with diesel generators could have little turbines." Fletcher Challenge has joined the Capstone venture primarily be- cause it's impressed by the microturbine's potential as a primary power source in cap- ital-poor countries. [] Reprinted through the courtesy of the Editors of FORTUNE ©1996 Time Inc.