Marketplace Need

"The reliability of America's power grid is increasingly threatened while the technologies needed are delayed in commercial deployment", reported EPRI in October 1999. Distributed generation (DG) technologies fill that need. DG offers smaller dispersed systems that can help ensure the reliability of America's power grid while successfully competing with central station generation. DG technology applications abound and are anticipated to play an increasing role for business to effectively manage their future energy needs; however, near term deployment of emerging technologies is crucial to broad based market acceptance.

Technology

Distributed generation is defined, for purposes of this Consortium, as onsite or near-site power generation of less than 25 MW. High energy efficiencies are possible for installations that supply both power and use the waste heat to meet the heating or cooling needs of a customer. The Consortium has joined DOE's Office of Power Technologies in a program that will encourage the deployment of smaller packaged or pre-engineered DG systems complete with heat recovery.

A wide range of power generation technologies are commercially available or are currently emerging that could meet the needs of industrial, institutional, and large commercial customers. The portfolio of technologies that will be supported in this program includes emerging technologies such as microturbines, fuel cells, and diesel conversions, as well as conventional natural gas engines and combustion turbines.

These technologies address applications such as primary power, peak-shaving, combined heat and power, premium power, and others.

Customer Benefits

Natural gas DG technologies offer customers: increased source energy efficiency, energy management cost reductions, lower environmental impact on a source basis, and increased power quality, reliability, and energy security benefits.

Market Segmentation

The industrial market for combined heat and power is currently in paper, chemicals, petroleum refineries, food, and metals, which is also accounts for most of the current steam usage. Non-traditional industries such as rubber and plastics, printing and publishing, pharmaceuticals, fabricated metals, metal plating, coatings, and electronics also offer a large potential for DG.

Commercial building cooling heating and power (BCHP) installations are mostly concentrated in universities, district energy utilities, government facilities, hospitals, health clubs, airports, commercial buildings, hotels, and laundry facilities. Peaking, power quality, and back up power applications are more site-specific markets and need to be explored locally.

Market Potential

The GRI 2000 Baseline Projection for DG capacity additions for equipment under 25 MW in size indicated that gas load potential is expected to grow from a baseline of 1,207 TBtu's to 1,878 TBtu's by the end of 2015 for an average growth rate of about 4% per year. The CHP applications are forecasted to grow about three times the average growth rate and currently make up almost 90% of existing installations. The top ten states by DG market potential include: CA, NY, NJ, MA, PA, IL, TX, CT, MI, and OH according to recent DOE study.

Program Goals

1. To equip consortia representatives with the information and tools needed to identify opportunities and work with manufacturers and local trade allies to increase awareness and market acceptance.
2. To conduct demonstrations in consortium service areas.
3. To achieve critical mass of DG technology acceptance within consortium service areas to ensure that implementation of DG technologies can be sustained over the long term.

Program Plan

Market Application Analysis: Optimum market applications will be identified for the leading DG technologies and ideal customer profiles will be extracted for targeted demonstration showcases and equipment configurations.

Installation Database: Existing DG project installations will be surveyed to assess issues encountered and verify economic and technical performance from the field. DOE, AGA, GTI, state agencies, and utility members have on-going work in this area that may be valuable in tracking demonstration and sales results.

Showcase Demonstrations: DG demonstrations will be pursued in cooperation with DOE, equipment manufacturers, and local trade allies. Leveraged funding for these sites will be sought in collaboration with strategic partnerships with DOE and state organizations for these demonstrations.

Sales Channel Management: Formal partnerships will be established with equipment distributors and strategic allies. Commercialization progress will be monitored within the DG industry to provide the consortium with the most up to date information. A website will be constructed and maintained to link members with national organizations and local trade allies and their commercialization activities to provide a platform for DG news, results, and program status.

Training and Guidebooks: An applications manual will form the basis for training and reference materials.

Screening Tools: Economic screening tools will be evaluated for their effectiveness in identifying and validating commercial opportunities.

To Learn more about Distributed Generation, go to the DG Consortium's web site.