 |
The most visible application of DER involves locating electricity generators close to the point at which the electricity is consumed. Traditionally, utility companies have generated electricity at large, central power plants, then transmitted that electricity to end users through a transmission and distribution (T&D) network. This centralized model of power delivery is beginning to give way to a new model in which generators are distributed throughout the grid. Less visible, though just as significant, is the energy-saving (load-limiting) aspect of DER. See DER technologies for examples of both types of technology.
DER technologies are typically installed for one or more of the following purposes:
- Overall load reduction — using energy efficiency and other energy-saving measures to reduce total consumption of electricity, sometimes with supplemental power generation (see below).
- Energy independence — using on-site power generation to meet all energy needs, usually to ensure power reliability and/or power quality, in one of two configurations:
- Grid-connected — using grid power as a backup electricity source during failure or maintenance of the on-site generator.
- Off-grid — stand-alone power generation for the purpose of self-sufficiency, usually including energy-saving approaches and an energy storage device for backup power. This includes most village power applications in developing countries.
- Supplemental power — augmenting grid electricity with distributed generation for one of two reasons:
- Standby power — using a generator as a backup electricity source to ensure power availability during grid outages.
- Peak shaving — reducing demands for grid electricity during peak periods, usually to avoid the higher rates ("peak demand charges") imposed on big electricity users at these times.
- Net energy sales — homeowners and entrepreneurs generating more electricity than they need and selling the surplus to the grid.
- Combined heat and power — capturing waste heat from a power generator and using it in manufacturing processes, for space heating, or for water heating, thereby significantly improving the efficiency of fuel utilization.
- Grid support — installed by power companies for a wide variety of reasons, including meeting higher peak loads without having to invest in infrastructure (line and substation) upgrades.
The variety of energy consumers that are already using distributed power is large and growing fast. For example:
- A police station in New York's Central Park has bought a fuel cell to run its electronic crime-fighting equipment, saving $200,000 over the cost of a line upgrade.
- A McDonald's restaurant in Chicago, Illinois, gets most of its electricity from a natural-gas-powered microturbine, cutting $1,500 off its total monthly power bill.
- The First National Bank of Omaha, Nebraska, uses fuel cells to run its credit-card processing center, saving about $6 million per hour of power outages.
- The Shop 'n' Save supermarket chain has installed baseload generators at almost a dozen of its grocery stores, avoiding $40,000 in losses per day in the event of a power outage.
- A textile mill in Lawrence, Massachusetts, ensures continuous operation by getting its power from microturbines.
Most of these early adopters of distributed power want to stay connected to the electricity grid, using it as a backup and selling surplus power back to the power companies.
A 1999 DOE report, Distributed Utility Perspectives, examined 275 DER projects in the United States, managed by 121 different companies, to find out why the distributed resource was being used (see graph). The report found that DER is most often used for (in order of importance):
- Electricity supply
- Deferral of transmission and/or distribution system upgrades
- Power quality and reliability
 A study of 275 DER installations found that electricity supply and deferral of T&D system upgrades were the two biggest reasons for using DER. In some cases, there was more than one reason for using the distributed resource — there is a total of 407 occurrences for 275 projects. (Source: Distributed Utility Associates) |
|
