There are nine major customer DG applications:
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Allowing customers to continuously generate their own electricity, with or without grid backup, |
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Permitting customers to generate power while serving their thermal and/or cooling loads, |
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Generating a portion of electricity onsite to reduce the amount of electricity purchased during peak price periods, |
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Licensing customers to sell excess generation back onto the grid when their own demand is low, especially during peak pricing periods, |
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Using standby or emergency power to backup grid based power, |
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Improving customer power quality and reliability, |
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Serving niche applications, such as "green" power or remote power, |
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Meeting continuous power, premium power, or cogeneration needs of the
residential market. |
If you would like more detailed information about any of these applications or how they might benefit you, please contact us and describe your specific need.
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Continuous
customer generation applications produce power on a nearly continuous basis,
running at least 6,000 hours per year. When evaluating the usage of DG
technologies in this capacity, customers consider competing grid price, as well
as the installed cost of the unit and fuel costs. Maintenance costs, power
quality, and reliability of grid power are other critical components. In
non-attainment areas, emissions can provide a strong barrier to these
applications.
Cogeneration
Cogeneration, also known as Combined Heat and Power (CHP), utilizes otherwise wasted exhaust heat as useful thermal output, typically steam. The steam may be used either for space heating or space cooling. Again, CHP applications are driven by grid price and installed cost, but emissions can provide a strong barrier to implementation, especially in non-attainment areas. As with continuous power applications, these units will run on a nearly continuous basis, typically at least 6,000 hours per year.
Driven primarily by high utility demand charges, peak shaving applications (sometimes called peak clipping) are also affected by installed cost, perceived unit reliability, and fuel prices. These units operate much less frequently than do continuous power or CHP applications, often running as few as several hundred hours annually.
Selling Power to the Grid Under Net Metering
Depending on what state they live in, some customers may be eligible for net metering. If eligible, net metering effectively allows a customer to sell its excess generation back to the grid at the same retail price as the customer buys power from the grid during other periods. With this financial incentive, the market for small commercial and residential DG installations, especially those based on renewable energy technologies, should increase.
Applications providing standby or emergency power are typically driven by the reliability, perceived or real, of the grid and the cost to the customer of outage. Although the DG unit may only operate a few hours a year, it is used to power critical devices whose failure would result in property damage and/or threatened health and safety. Some customers like hospitals and airports may be required by code to install and maintain these units. For others, the high cost of outage drives the application. The choice of DG technologies for these emergency and standby applications is determined by installed cost, time required to start (i.e. black start response), fuel access/storage, and size/weight of the unit.
Onsite generation can improve both power quality and power reliability, especially when backed up with grid based power. This application requires a DG technology that can operate continuously. In an era of both increasing power outages and rising demand for premium power, many businesses may install DG units to protect against the risk and cost of power outages. These customers include banks, semiconductor manufacturers, grocery stores, hospitals and many other industrial and commercial market sites.
Many of the renewable technologies and fuel cells have very low emissions. With the addition of emission-reducing technologies, microturbines and miniturbines also emit low levels of regulated gases. Customers who are environmentally inclined may purchase these DG applications for this reason, even if they must pay a slight premium for green power compared with grid based power purchases.
Residences and small commercial establishments (such as ranches, dairy farms and flower growers) that are located well away from the transmission and distribution (T&D) system may opt to generate their power onsite. By doing so, they eliminate both the cost of connecting to the grid and any problems associated with their position at the end of a long T&D line. The elimination of these problems, which include power outages and lower quality power, can produce the compelling economics necessary to further the use of DG technologies in a remote power capacity.
Individual households may choose to install DG for many of the same applications noted above, and may find DG especially practical if they are located far off the grid. However, residential installations must be relatively small, and given today's technology, the market most likely to develop is that for 4 to 7 kW fuel cells. These may be installed both in new construction and in retrofits of the existing housing stock.
