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The case for natural-gas-fueled '''
<br /> Po.c Grid • sot
<br /> distributed power generation . ___..
<br /> 3
<br /> i>v� i
<br /> Michael A Devine, gas product/marketing manager, Electrical Power />. .
<br /> Group, Caterpillar Inc, analyses how the changes in power markets and /^
<br /> advances in generating technology have converged to place gas gen-sets on - _
<br /> the forefront of an emerging industry
<br /> End User
<br /> en years ago, small-scale
<br /> Tdistributed generation (DG)was
<br /> government-regulated utilities.
<br /> Opportunities have opened for private, Ostr6otedGener�6acTryialSchemtuc
<br /> mainly an idea, at best a niche smaller-scale generators and, in some Figure 1
<br /> technology. A few utilities were areas, to market-based pricing
<br /> beginning to see shortfalls in generating programmes for power users. fluctuations can seriously damage or
<br /> capacity, but only for short periods, Third, environmental concerns and air- disrupt computer systems and reduce
<br /> highly seasonal, at the height of the quality regulations have begun to shift the performance and service life of
<br /> cooling or heating season. the mix of fuels used to produce industrial machinery.
<br /> Fast-forward to today. DG has moved electricity, in general away from coal This makes DG all the more attractive
<br /> squarely into the mainstream of energy and fuel oil and toward natural gas and as a contributor to immediate and
<br /> planning. It is the subject of news renewable sources. long-term power supplies. DG systems
<br /> articles, white papers and forecasts Fourth, new small-scale generating are typically small, relatively
<br /> from leading financial and marketing technologies have emerged and existing inexpensive, easy to site and permit,
<br /> consultants, and reports from national technologies have improved, making DG and quick to install. Placed at strategic
<br /> government agencies. Private and more cost-competitive. Furthermore, locations on the grid, they can bolster
<br /> publicly funded research projects aim to because these systems are flexible and capacity while supporting distribution
<br /> develop cleaner, more efficient, lower- can be permitted and installed quickly, system voltage(see Figure 1). DG also
<br /> cost generation sources specifically for they are attractive to utilities facing helps utilities defer investments in
<br /> the distributed power market. short-term capacity needs. central power plants and transmission
<br /> All this happened because political, Fifth, many utilities are interested in and distribution infrastructure, while
<br /> economic and market forces coalesced local power sources for security against reducing transmission and distribution
<br /> to change the dynamics of how electric natural and man-made disasters that losses.
<br /> power is produced, sold and delivered can target vulnerable power plants and DG can appeal to end users,as well,
<br /> to end users. Today, DG, defined transmission lines,thus crippling especially where power markets are
<br /> broadly as the production of electricity infrastructure. opening to competition and to concepts
<br /> near the point of use, is widely seen as such as time-of-use or real-time pricing.
<br /> a viable and permanent part of the Constraints on supply In such cases, the ability to produce
<br /> energy-supply picture. The power industry increasingly power can give a business a valuable
<br /> The DG market is rapidly evolving, and recognises the potential of distributed hedge against market price volatility, or
<br /> so are the technologies that produce the power to relieve regional and seasonal enable the profitable sale of energy on
<br /> power.Today and in the foreseeable power shortages and to meet other power exchanges. Further, as small-
<br /> future, DG demands clean, reliable significant needs of utilities and power scale power technologies become more
<br /> power for relatively long annual hours of consumers. Supply shortages efficient and their electric output more
<br /> operation, in intermittent duty, at the developed in the mid-to late 1990s cost competitive, end users have more
<br /> lowest cost per kW hour. More than any because market and political forces reasons to consider on-site generation.
<br /> other technology, natural-gas-fueled prevented capacity additions from keep- Applications can include:
<br /> gen-sets are positioned to meet those ing pace with growth in demand.
<br /> requirements. Specifically, utilities facing deregulated • Prime power systems for complete
<br /> markets became hesitant to invest in control over reliability and power
<br /> . Evolution in the market capital intensive and financially quality.
<br /> Since the early 1990s, five forces have challenging central power stations and • Standby power sized to sustain
<br /> fundamentally changed the electric major transmission lines that are difficult critical production loads (not just
<br /> power business. First, demand for to permit. bare-minimum emergency needs).
<br /> power has risen rapidly with economic Power supply and transmission • Peak shaving systems to minimise
<br /> expansion and growth in computer and constraints cause concerns beyond demand charges or spikes in usage.
<br /> data systems and household blackouts and price swings. In fact, a • Cogeneration systems to reduce fuel
<br /> appliances. more common problem is a temporary costs by supplying heat and/or
<br /> Second. restructuring of power decline or fluctuation in voltage affecting cooling and electricity from one
<br /> markets has modified the traditional a sector of a utility's distribution grid source.
<br /> industry model in which electricity during times of high demand. Today's
<br /> comes from large, centralised power high-value business equipment requires Turning to gas
<br /> plants owned and operated by consistent power quality. Voltage Growth in these applications has
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