Power House

Distributed generation (DG) is the process of generating electricity at or near the point of use. Examples include solar energy and wind-powered systems as well as natural gas fueled technologies. It involves small amounts of generation located on a utility's distribution system (could be the house or business building) for the purpose of meeting local (substation level) peak loads and displacing the need to build additional (or upgrade) local distribution lines. It encompasses on-site generation, self-generation, cogeneration and any small-scale power generation that is not provided by a central power plant.

This is a concept that allows customers to continuously generate their own electricity, with or without grid (referring to an electricity transmission and distribution system) backup. Costs to consider are the competing grid price, the installation cost of the unit and fuel costs. Other considerations are the maintenance costs, power quality and the reliability of grid power.


Because the power is not delivered by a transmission and distribution service, on-site generation is more reliable during a power outage. DG systems also take less time and money to build than a large central power plant.

Waste heat from electric generation can be captured and used for heating, water heating or cooling through thermal absorption, where efficiencies can reach 70 to 80 percent. Most coal plants are only 33 percent efficient, and the best gas plants are about 60 percent efficient.

Those undertaking DG projects are end-user customers, utility companies and power marketers. The technologies are applicable to almost any situation. Systems can operate interconnected or independent of the grid with today's interconnection technologies.

The ways that distributed power can improve the reliability of the nationwide electric power system is by adding power to the grid, reducing the load on the grid and providing very reliable premium power to businesses that require that level of service.

It used to be said DG was only economical for the large industrial customer-now, system costs make DG a more attractive option for 15 to 25 percent of customer energy used in commercial and industrial sectors.

Technologies used

The technologies used for DG range from reciprocating engines (small portable units), turbines, microturbines, combustion gas turbines, fuel cells, solar electric, wind and storage (e.g., battery, hydrogen, thermal, mechanical, air, pump-water, etc.).

Reciprocating engines have applications ranging from fractional horsepower units that power small tools to enormous 60-megawatt (MW) base load electric power plants. Smaller engines are primarily designed for transportation and can usually be converted to power generation with little modification. They can be fueled by diesel or natural gas, with varying emission outputs and are typically used for either continuous power or backup emergency power.

Microturbines are an emerging class of small-scale distributed power generators. The basic technology is derived from aircraft auxiliary power systems, diesel engine turbochargers and automotive designs. They are usually designed for continuous-duty operation and are recuperated to obtain higher electric efficiencies.

Combustion gas turbines are in the 1 to 15 MW range and referred to as industrial turbines, which differentiates them from larger utility grade turbines and smaller microturbines. They are available from different manufacturers and originally were developed from engines used for jet propulsion.

Some, however, are designed specifically for stationary power generation or compression applications in the oil and gas industries. They have relatively low installation costs, low emissions and infrequent maintenance requirements. Cogeneration DG installations are particularly advantageous when a continuous supply of steam or hot water is desired.

Fuel cells are used to generate electricity and differ in their electrolytic (a type of capacitor that has a liquid or paste between the plates to increase capacitance) material, but they all use the same basic principle-two electrodes separated by an electrolyte. Power conversion is an electrochemical process taking place in the “stack,” which is a major contributor to the total cost of the system.

Photovoltaic systems or solar systems (solid-state semiconductors that convert sunlight into direct-current electricity) produce no emissions, are reliable and require minimal maintenance to operate.

Solar thermal systems use heat-pipe technology to heat water as an energy saver. A house can be designed to use the natural behavior of the air to capture and distribute the energy of the sun, thus reducing heating and cooling bills. Coupled with this is the need to properly insulate and weather-proof a home.

Wind turbines harness wind energy for mechanical work such as pumping water. Wind turbines produce electricity and are an environmentally sound and convenient alternative. New transmission lines are not required for the infrastructure and they can be used for remote power applications. As the wind blows through the blades, the air exerts aerodynamic forces that cause the blades to turn the rotor. As it turns, its speed is altered to match the operating speed of the generator. The output of the generator is processed by an inverter that changes the electricity from DC to AC so it can be used.

Why would a customer want to use DG?

There are many reasons to use DG-some say because it is cheaper than what they currently have or provides them with a service they want. Other customers want to continuously generate their own electricity, with or without grid (the electricity transmission and distribution system that links power plants to customers through high-power transmission line service) backup; some want to generate a portion of electricity on-site to reduce the amount of electricity purchased during peak price periods.

Still, other customers want to sell excess generation back onto the grid when their own demand is low (especially during peak pricing periods), while others use standby or emergency power to back up grid-based power. More want to improve their power quality and reliability, while others want to be able to meet the needs of the residential market with continuous power, premium power or cogeneration.

A customer could also want to change from their current state of energy supply-for either a new less-expensive system-or one that provides them with a service they want. If the initial investment for DG is financed as part of a home loan, the interest payments for that loan have the potential to be tax deductible-or that state may have incentives-or the real estate value could be increased if the house produced some or all of its own electricity. Residents could also be isolated from electricity price fluctuations that are possible in deregulated markets.

Generating the electricity close to the point of use also provides the opportunity to use not only the electricity, but also the heat that is generated by some technologies. That heat can be used to heat the home or water or even to cool the house, which means the total amount of energy consumed is reduced.

How would a customer use DG?

A customer could have a natural gas engine brought to their site to reduce energy budget costs, to outsource its maintenance and operation, and to have predictable operating costs and one monthly energy bill. The responsibility for its operation would be monitored by one organization and there would be only one contact to deal with. The customer could outsource its maintenance and issuance of permits, yet they would have improved reliability and greater flexibility when facing changing facility needs.

A major difference in how a DG system is used in a house is whether the system is connected to the grid or is a stand-alone system that supplies all of its own power. A grid-connected system can use the grid for “storage,” as it can put energy onto the grid at times of excess generation and draw from the grid during times of insufficient generation.

Most systems require an inverter that converts the electricity into a form usable by appliances. For systems connected to the grid, the inverter has to include a transmission line that links two or more regional electric power systems to the grid. This puts power back onto the grid and has safety features to guarantee that power is not fed back to the grid while grid repairs are performed.

Then, the equipment needed is the power source, the inverter (intertie), the wire/cable to connect them and the mounting hardware. If you are going to be independent of the grid, then the equipment needed is the power source, some storage, a charge controller, an inverter, wiring/cabling and mounting hardware.

Some products available that manage peak loads are digital, programmable thermostats (wireless) that can be used in commercial or residential applications. If there is a severe peak load period, the utility can remotely contact the thermostat and direct it to efficiently cycle the home or building air conditioners, which avoids potential brownouts with no disruption to human comfort.

Energy management systems are also designed to generate savings. Those products serve markets that include manufacturing, food processing, wood products, petroleum products, foundries and commercial buildings.

Then there are fuel cells that can be used for portable power for cell phones, laptops and cellular telecommunications towers to larger-megawatt fuel cell power plants that can keep an entire community running seamlessly.

The builders or building owners need to understand the technology's economic benefits. That understanding coupled with any tax credits, tax breaks or rebates available add to making energy efficiencies through DG viable for today's building markets. EC

MICHELSON, president of Jackson, Calif.-based Business Communication Services and publisher of the BCS Reports, is an expert in TIA/EIA performance standards. Contact her at www.bcsreports.com or randm@volcano.net.


About the Author

Marilyn Michelson

Freelance Writer
Marilyn Michelson, president of Jackson, Calif.-based Business Communication Services and publisher of the BCS Reports, is an expert in TIA/EIA performance standards.

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