# Distributed Power

by Pkruse
Tags: distributed, power
 Mentor P: 22,286 Distributed Power "Payback is often as short as 2-4" is what you get when you grab a fistfull of darts and hurl them in the general direction of a dartboard. A payback under 5 years requires a highly specific application, such as a sewage treatment plant which both makes its own fuel as a waste product and requires massive amounts of both heat and power. Full-time local power generation and cogen as an actual money-maker are all but nonexistent beyond such special cases. However there is substantial benefit in load shedding and other related efforts for businesses that already have generators for emergency use. I don't want to hijack, but... Load shedding/peak shaving comes in a few flavors. First is through minimizing the peak demand charges that many power companies charge. Essentially, whatever your highest 15 minute usage for the month gets charged on a per-kW basis in addition to the monthly total. And it gets worse in summer, as in some cases a portion of the summer peak can be carried forward throughout the year. So if you can reduce that peak, you can save a lot of money. Running a generator for a few hours on the few hottest days of the summer can therefore save a lot of money. Next is emergency response load shedding. The power company will pay you a flat annual rate just for the availability of your generators to respond to up to perhaps 10 emergencies a year. Ie, if a storm last night knocked-out a transmission line and tomorrow's supposed to be a hot day, they may call you in the morning and instruct you to take some load off the grid as per your agreement. This is a valuable service for protecting the reliability of the grid, so they'll pay you a bunch of money for it. Third is peak load contribution. This is similar to peak demand reduction, but with a cooperative effort instead of an individual one. If everyone works hard to reduce their peak demands, it means fewer power plants will have to run at any one time, but peoples' individual peaks won't necessarily correspond with each other, so the effect is somewhat muted. But since the grid's peaks are highly predictable and highly weather dependent, if the power company can get a bunch of customers to reduce their demand for just a few hours on the few hottest days of the year, they may be able to skip building a few new power plants. So they are willing to pay companies a ton of money for perhaps 20 hours of demand reduction a year. The catch, of course, is figuring out ahead of time which days those are going to be. Now I will say though that the idea of a power company installing a generator for free doesn't sound right except under some very unusual circumstance. But $56k/month for 4MW (or$168,000 per megawatt per year) is in the ballpark of what I've seen.