Avoided Cost Comparison Levelized Cost of Energy ($/MWh)

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in the telecom industry and for back-up power and portable power needs in the construction industry. This market has been dominated historically by the diesel engine. However, recent adoption of stringent air quality regulations globally have shifted demand to other gas based engines, bringing the global share of annual demand for generators to 69 percent in 2010. 30 The installed capacity of distributed resources in emergency / standby applications accounts for 79 percent of the total capacity, while providing merely 2 percent of the total power produced. 31 figure 3: insTalled caPaciTy of dPs by aPPlicaTion (mW) and share of PoWer generaTed by dPs aPPlicaTion (mWh) Installed Capacity of DPS by Application (MW) Emergency/ Standby 2% Emergency/Standby 79% Baseload 34% CHP 16% CHP 64% Baseload 5% Share of Power Generated by DPS by Application (MWh) 30 “Diesel and Gas Generator Market – Global Market Size, Equipment Market Share and Competitive Landscape Analysis to 2020,” GlobalData Report, December 2010. 31 “Backup Generators (BUGS): The Next Smart Grid Peak Resource,” National Energy Technology Laboratory, April 2010. aSSESSIng THE ROlE OF dISTRIBuTEd POwER SySTEmS In THE u.S. POwER SECTOR 12 Microturbines Microturbines are electricity generators that burn gaseous and liquid fuels in a turbine to create high-speed rotation that drives an electrical generator, typically ranging between 30 to 250 kW. Microturbines can operate on two principles: (i) Brayton cycle and (ii) Rankine Cycle. The most popular form of microturbine technology operates on the principle of the Brayton cycle, where air is compressed, heated and expanded to produce power. This is the same thermodynamic cycle as that in centralized turbine power plants, only on a much reduced scale. Microturbines are able to run on a variety of fuels, including natural gas, sour gases (those with high sulfur content), and liquid fuels such as gasoline, kerosene and diesel fuel/distillate heating oil. The electrical conversion efficiency of microturbines using the Brayton cycle ranges from 20-35 percent. This is often higher than the combustion engine counterpart, but not high enough to provide sufficient economic returns on a power generation basis and is typically used where the thermal output of the turbine can be used locally (as in Combined Heat and Power: see below for more details). Microturbines are also used in resource recovery applications where byproduct and waste gases that would otherwise be flared or released into the atmosphere from landfills or coal mines are used to generate power. Microturbines that use the same thermodynamic principle as the steam engine are based on a process known as the Rankine cycle. In these systems, a working fluid, typically water, is boiled in an evaporator into a vapor phase that expands to drive a turbine/generator. A turbine technology known as the Organic Rankine Cycle (ORC) that
uses an organic, low boiling point working fluid in place of water is used where lower temperature heat sources are available, such as in waste heat recovery systems. Since low embedded thermal energy or low quality fuel resources that would have otherwise been wasted are used in such microturbine applications, conversion efficiencies range between 10-20 percent. Low grade waste heat can be found in many industrial processes and exhausts from internal combustion engines, while low quality fuel resources can be found in landfills, agricultural wastes and other industrial byproducts. Combined Heat and Power (CHP) Combined Heat and Power (CHP) does not represent a specific technology but an integrated energy system that provides the simultaneous figure 4: elecTrical efficiency and ouTPuT of Various microTurbine Technologies Electrical efficiency (%) 40 38 36 34 32 30 28 26 24 22 20 Capstone C200 Capstone C1000 aSSESSIng THE ROlE OF dISTRIBuTEd POwER SySTEmS In THE u.S. POwER SECTOR 13 production of both electricity and heat from a single fuel source. CHP accounts for nearly 8 percent of the power generated in the U.S. and represents the largest deployment of distributed generation technologies. 32 These combined benefits save U.S. building and industry operators an estimated $5B annually. 33 The untapped potential for CHP is vast: according to Oak Ridge National Laboratory, CHP could save the United States 5.3 quadrillion British Thermal Units (BTUs) of energy by 2030— equivalent to half of the energy consumed by U.S. households—and could reduce carbon dioxide emissions by 800 million metric tons per year. 34 CHP systems are typically found in one of two configurations: power generation (turbine or Solar Turbines Mercury 50 Elliott TA 100R General Electric GE5-1 (DLN) Siemens SGT-100 Ingersol Rand MT 250 Solar Turbines Centaur 50 Rolls Royce 501-KB7S Opra Turbines OP16-3B (DLE) Solar Turbines Saturn 20 Solar Turbines Centaur 40 Rolls Royce 501-KB5S Kawasaki GP8600 Kawasaki GPB15D Kawasaki GPB30D 18 16 Dresser-Rand KG2-3E Dresser-Rand KG2-3C 14 0 1 2 3 Power output (MW) 4 5 6 Source: Stephen Gillette, “Microturbine Technology Matures,” Power Magazine, November 1, 2010 32 “Clean Heat & Power Basics,” United States Clean Heat & Power Association. (http://www.uschpa.org/i4a/pages/index.cfm?pageid=3283). 33 Ibid. 35 Anna Shipley et al “COMBINED HEAT AND POWER: Effective Energy Solutions for a Sustainable Future, Oak Ridge National Laboratory, 2008
Page 1 and 2: Energy Security Initiative at BROOK
Page 3 and 4: About The Brookings Energy Security
Page 5 and 6: Acknowledgements The authors would
Page 7 and 8: tAble oF contents LIST OF ACRONYMS.
Page 9 and 10: list oF Acronyms ACEEE American Cou
Page 11 and 12: executive summAry The U.S. power sy
Page 13 and 14: introduction The U.S. power sector
Page 15 and 16: • Chapters 2 and 3 assess the eco
Page 17 and 18: were accorded the right to sell ene
Page 19 and 20: on-site generation. 11 There is far
Page 21 and 22: 1.3 Overview of DPS technology Dist
Page 23: figure 2: disTribuTion of The Purch
Page 27 and 28: can be used as energy storage, and
Page 29 and 30: Similar to battery technologies, a
Page 31 and 32: solar project. Known as “Project
Page 33 and 34: CHAPTER 2 economic And environmentA
Page 35 and 36: Table 2: lcoe financing assumPTions
Page 37 and 38: figure 8: e3 analysis of economics
Page 39 and 40: CHAPTER 3 security-relAted beneFits
Page 41 and 42: scale sources of renewable generati
Page 43 and 44: total square footage occupied by th
Page 45 and 46: The integration of DPS into militar
Page 47 and 48: CHAPTER 4 current dPs Policy lAndsc
Page 49 and 50: also avoid, reduce, or sequester ai
Page 51 and 52: pendent System Operator 115 —and
Page 53 and 54: • Microgrid, defined as “an int
Page 55 and 56: In addition, states are potentially
Page 57 and 58: Rules and Regulations Renewable Por
Page 59 and 60: figure 10: groWing number of neT me
Page 61 and 62: energy outputs of CHP will not be a
Page 63 and 64: Permit Act, which will “limit sol
Page 65 and 66: nancial markets like corporate stoc
Page 67 and 68: are state renewable portfolio stand
Page 69 and 70: Many respondents (mostly developers
Page 71 and 72: Several IOUs pointed out the challe
Page 73 and 74: more DPS-related information and kn
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dent noted that the leveling of dem
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to “pull” innovative and early
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Net Metering and Interconnection Ad
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Advocates of dynamic pricing saw it
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ally—is the categorization and qu
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CHAPTER 6 conclusions And recommend
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DPS may have a positive impact on r
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ing new energy technologies into th
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The Solyndra Effect Many DPS projec
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at home and abroad; and provide adv
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quotas or upper limits to discrimin
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of 2006, also required the Californ
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anneX 1 figure 1: dg assumPTions in
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anneX 2: sTaTe Policies CATEGORY: F
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through additions to their property
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ments are below value of energy sav
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Oregon: The Oregon Energy Trust Sma
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program. There is a choice for comm
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nies in the market and tracked elec
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Net excess generation (NEG) - this
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for example to 25 kW in New York. 2
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State Rate Case Direct Cost Recover
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STATE POLICIES CATEGORY: Policies a
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STATE POLICIES CATEGORY: Policies a
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State Regulatory Update: Smart Grid
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CATEGORY: Financial Incentives summ
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jobs.” 285 The Program received 3
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FEDERAL POLICIES CATEGORY: Strategi
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ANNEX 4: STAKEHOLDER SURVEY Definit
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) National Renewable Portfolio Stan
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9. Aside from the policy measures o
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