Evolving industry structure, technology, regulations and economics are profoundly changing the way power is likely to be generated and delivered to consumers. Advocates of distributed generation (DG) often present it as a solution to rising wholesale market prices, price volatility and transmission system constraints. DG has the potential to lower costs for both energy providers and consumers, improve reliability, reduce emissions, and improve customer choice.
DG manufacturers, distributors and packagers need to know how to position and market DG equipment in this volatile marketplace. How big is the potential market? Which countries and which U.S. regions are attractive? What are the best early adoption niche market applications? Are the best prospects large industrial, small industrial, commercial, or residential customers? What other products and services might be bundled with DG? What would consumers be willing to pay, either for purchase or as a service? What key variables and external drivers will influence sales? What are the primary barriers to market adoption? What are the best ways to bring DG equipment to market, i.e. is there an optimal value-chain for this type of product?
The Resource Dynamics Corporation (RDC), with more than two decades of providing advice on small-scale power production, can provide you with the information and credible data required to answer these questions and formulate a DG marketing strategy, whether you are selling power gensets, storage systems, control systems, or software. This data can be prepared at varying levels of detail, providing perspective on the international, U.S. and regional markets. RDC offers three services to equipment suppliers seeking a detailed understanding of the marketplace and wishing to fine-tune their marketing strategy.
Estimates indicate that the worldwide market for DG applications will grow significantly during the next few years. In this service, forecasts for U.S. and worldwide DG use are made, including:
Estimates are by country with more detailed assessments in high potential regions. DG applications considered include on-site generation/cogeneration (with and without grid backup), peak shaving, premium power, and niche applications such as green power and remote power.
These assessments are prepared specifically for the products you offer or seek to offer. As the market dynamics vary considerably by customer application, genset output, efficiency, thermal utilization, fuel use, fuel price, emission level, noise level, capital cost, operating costs, utility interconnection requirements and backup power policy, it is necessary to consider product specifics when assessing the market opportunities.
Analyses are performed using our DIstributed Power Economic Rationale SElection (DISPERSE) model. DISPERSE is the leading tool used to forecast the potential for DG technologies. Using DISPERSE, the costs and benefits of DG to energy users and the impacts of policy alternatives on DG can be estimated, while considering multiple parameter changes. DISPERSE was extensively vetted and peer-reviewed for the critical role it played in estimating DG impacts for the Administrationís Clean Energy Futures Study (April 2000).
The bottom line is an estimate of the potential size of a DG business in regions of interest, with a disaggregration by customer type, technology, size, and application. Revenue estimates are prepared by examining possible DG equipment pricing strategies. Based on these market assessments, we perform a preliminary identification of marketing and business strategies you can use to implement profitable DG business ventures. Business strategy recommendations highlight issues such as partnering and go-to-market strategies.
Similar to the first service, here we assess the U.S. market at the state level and in more detail. Varying state regulations for environmental parameters, utility interconnection requirements, and access to the retail electric market greatly affect the market potential of specific DG products. DG economics, regulations, and the technical capabilities of your products are assessed simultaneously. Six DG applications considered include:
This service will help manufacturers assess market size for each application, together with ways to reach potential customers by:
EasyDG, a DG site-specific economic evaluation software tool is available for use via license. This model packages the economics engine of our DISPERSE model in a user-friendly, flexible form that can be tailored to your individual needs. Pull-down menus, automated data entry, and familiar spreadsheet operation all facilitate ease-of-use. Either specific and detailed information can be entered for the most accurate results, or the user can elect to use defaults for quick answers or when not all information is available. The model includes default data on unit price and performance parameters, utility rate structures, electric and thermal load profiles for commercial and industrial facilities, fuel costs, financial parameters, and potential to provide system benefits. Users are able to calculate the financial impacts of projects ranging from residential fuel cell baseload power, to office building peak shaving, to industrial cogeneration. Advanced versions of the model also have an optimization routine which allows the model to select the best DG unit type, application, and unit size; for given site characteristics, fuel and electricity prices. We license this software to you, and provide training in its use, so that you can assess the market potential for both your current and future DG product offerings.
The cost of these services depends on the exact scope of the effort. Typical costs range from $60-120,000 for a global or U.S. market assessment, varying by the number of DG products considered and the level of regional detail desired. Our software models may be licensed from $30-60,000 depending on what information you desire and the level of training anticipated.
For More Information, Please Contact
N. Richard Friedman
Resource Dynamics Corporation
8605 Westwood Center Drive
Vienna, VA 22182
703-356-1300, ext. 203 (p)
Distributed-generation.com was last updated March 16, 2005 © 2005, Resource Dynamics Corporation