Distributed Power: Benefits, Efficiency & Load Shedding Agreements

[Pkruse]

I attended a lecture on DP yesterday, and learned some new things that I thought I'd share. If anyone has something to add on this topic, then please post.

DR is when you install a generator at its point of use, like perhaps a 20 MW unit at a hospital or hotel.

Payback is often as short as 2-4 years.

They can sell vars back to the pwr company to decrease the reactive load on the grid. They do this by adjusting the differences between the phases.

You can save a whole lot of money by peak shaving.

Pwr bought thru the grid has a typical overall efficiency of 35%.

DR efficiency can be as high as 80% using combined cycle and heat recovery.

Some units installed in remote locations run unattended for as long as 9 months between maintenance visits.

In some cases the pwr company will give it to you and install it for free if you sign a load shedding agreement. I know of one business that is collecting 56K per month on a LS agreement on a 4MW unit. They installed a 10MW unit on my former employer's site for free in exchange for a LS agreement.

 

[Bobbywhy]

Pkruse, thanks for contributing the above information.

Unfortunately, I do not recognize some of your abbreviations. Will you please define DP,DR, and LS?

Thank you,
Bobbywhy

 

[Pkruse]

You caught me in a typo.

DP distributed power
DR typo. Should be DP
LS load shedding

Some use the term DG for distributed generation.

 

[russ_watters]

"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 anyone 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.

 

[Pkruse]

They installed the generators at our site about three miles from their site. They could not install them at their site because their permit was max'ed out. But we were not the only company that got such a deal.

Thanks for all the information you added.