Energy Commission Staff Distributed Energy Resources Training Seminar

Energy Commission Staff Distributed Energy Resources Training Seminar Deployment/Case Studies/Agency Efforts California Energy Commission, Sacramento Jairam Gopal, Judy Grau, Pramod Kulkarniand Ean O’Neill April 13, 1999 1 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DER Development and Implementation Issues u Economic u Technical u Permitting u Regulatory 2 u Planning/Policy u Air Quality DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Economic Issues u Installed costs ØEconomies of scale vs. Economies of production u Operations and maintenance (O&M) costs u Levelized cost -- busbar -vs- delivered u More to come in next presentation 3 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

General Technical Issues u Lack of proven performance by newer technologies u Lack of coordination with utility system operation u Lack of comprehensive list of DER environmental and safety characteristics u Impact of substantial DER on natural gas infrastructure 4 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Regulatory Issues u AB 1890 Competition Transition Charge (CTC) for stranded investment costs u Exit fees u Non-discriminatory charges for standby, back-up and other utility services u UDC planning, siting, and/or ownership of DER u Expansion of net metering concept 5 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Planning and Policy Issues u Lack of governmental policy support and coordination u Omission of distributed resources from: Øair attainment plans Øgeneral plans Ølong-range energy infrastructure plans u Some technologies are too small to trigger the “permit” threshold 6 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Permitting Issues u Slow review, or denial, of distributed energy projects due to a lack of: Øconsolidated, clear information on siting requirements Øuniversally accepted standards Øclearly defined impacts and benefits u Permit 7 overload? Maybe someday. . . DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Air Quality Issues u Some technologies do not trigger permit thresholds or are otherwise exempt (e. g. , emergency use only) u Amount and types of DER penetration not known u Cumulative impacts could be significant u Possible consideration of output-based emissions standards 8 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Lack of Simplified Interconnection Capability Presented by: Ean O’Neill Associate Electrical Engineer 9 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Number One Barrier to Distributed Resources Lack of Simplified, Low Cost Interconnection Capability 10 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Stakeholders u Utilities u Manufacturers u Independent Power Producers u End-users 11 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Background u Utilities - systems designed for large power plants and radial outflow of power u Manufacturers - power conversion has changed from synchronous to power electronic solid state devices u Independent Power Producers - large power plants have consistent set of products and standards u End-users - low cost power 12 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Changes Required u Utilities - one-way systems must change to accept two-way flow for distributed resources u Manufacturers - new products need to be standardized and certified u Independent Power Producers - need interconnection standard and lower interconnection cost for distributed resources u End-users - need lower costs passed on 13 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Concerns of Stakeholders u Utilities - safety and reliability issues u Manufacturers - produce simplified and cost -effective product u Independent Power Producers - develop uniform standard for California and other states u End-users - cost and reliability of distributed resources 14 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

General Requirements of Interconnection Standard u System stability / reliability u Protection u Switchgear u Metering u Communication u Safety standards u Power quality u Reverse power flow issues 15 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Groups Addressing Interconnection Standard Issue u CADER’s Interconnection Committee u IEEE (Institute of Electrical and Electronic Engineers) 16 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

CADER Interconnection Committee’s Goal Build a consensus among California utilities (including munis), manufacturers and Independent Power Producers (IPPs) on interconnection hardware, contracts and cost responsibility that is safe, cost effective and protects the grid in a one year timeframe. 17 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Benefits of California Consensus u Consensus will lead to a California standard u Maintain safety and system reliability u Simplified, lower manufacturing cost u Uniform standard throughout California u Lowest cost for interconnecting distributed resources in California u Influence IEEE’s national standard 18 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

National Issue Other states working towards simplified interconnection: u Texas u New York u Massachusetts u New Hampshire u New Mexico u North Carolina u Vermont 19 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Problem Manufacturers will have to customize their product according to each state’s requirements. Solution IEEE Interconnection Standard 20 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

IEEE Goal Develop a national interconnection standard for all distributed resources in a two year timeframe. 21 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Benefits of National Standard u Maintain safety and system reliability u Simplified, lower manufacturing costs u Uniform standard throughout the U. S. u Lowest cost for interconnecting distributed resources throughout the United States 22 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Conclusion A California consensus will lead to a national interconnection standard that will eliminate Distributed Resource’s Number One Barrier: Lack of Simplified, Low Cost Interconnection Capability 23 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Distributed Generation in California Cost Effectiveness of DER and Case Studies Jairam Gopal Fuel Resources Office California Energy Commission Sacramento California April 13, 1999 24 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Overview u DG in California u Cost u Case 25 Effectiveness of DG studies DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Distributed Generation in California • A variety of technologies are available. • Not all are commercial. • Some have been in existence for a long time. u DG installed and operational u Cogen-type or CHP units in operation u Strategic R&D projects funded by PIER 26 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG Installed and operational in California u In the current sense of the definition of DG, not many applications / demo sites have been installed in the state. u Combined heat and power units have been installed and tested in many sites in the state. u Some are from the days of PURPA and Utility purchase contracts, other are new. 27 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Combined Heat and Power units u CHP- Combined Heat & Power. u Much like existing cogen projects. u Up to 95% efficiency. u Reduce emissions / pollution. u CHP provides a solution in our energyconscious world. 28 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

CHP in California u Nearly 6000 MW power generated by nearly 260 CHP units, u majority of these units are: Ø in the industrial sector Ø fueled by natural gas. Ø are reciprocating or combustion turbine engines, Ø located in the Kern / LA region. Capacity of CHP Units installed in US is more than 44, 000 MW representing about 7% of national power generation. 29 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG related projects funded by PIER Provide Benefits to California Ratepayers u u u 30 Reduce cost, increase value Increase reliability Improve environment Provide market connection Enhance economy Advance science & technology not provided by competitive & regulated market DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG related projects funded by PIER From a narrow definition of DG: u Total of 29 projects have been awarded, total of $22. 4 million, u Generally, <20 MW, located near the grid, u Serve load and/or provide power to grid. From a Broader perspective, DG can include: u Storage applications, u System reliability activities, u Demand side management activities. 31 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG related projects funded by PIER Recap of technologies funded by PIER: u Fuel Cells and their hybrids, u Gas turbines and Micro-turbines, u Hydro (micro-Hydro applications) u Photovoltaic u Wind u Waste / Biomass u Reliability, Scheduling and Storage, 32 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Economics of DG u Capital cost u Fuel cost u Operation and maintenance costs u Efficiency u Operating mode (hours) / Energy profile support u Power quality u Siting / environmental and other costs 33 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Is there a single answer? Cost-effectiveness is site-specific and has to be judged in light of each site's options and values for availability, reliability, risk tolerance etc. 34 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Why is DG better? Is it cheaper? u Economics is not the only driver for DG u power quality and integrity are major drivers for DG - energy managers. u Emerging Technology DGs offer lower maintenance costs than conventional gen sets. u Improvement in environmental performance. u Operating hours - base load Vs. peak shaving / standby u Shelter from high volatility in electricity prices 35 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Market Potential for DER Overall DER costs are less expensive u Modular design - pre-built packages u Lower T&D investment u Build in stages as demand grows u Situational advantage, using various technologies u Gain from reduced T&D line losses 36 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Market Potential for DER Where is DER used? u On-site generation - at point-of-use Ø Residential, commercial, industrial or institutional endusers u Part of the electric grid to enhance reliability and power quality u As an alternative to T&D facility investment 37 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Applications of DG to realize cost-effectiveness u Isolated from the grid u Supported by the grid: continuous DG operation with grid standby u Support the grid: DG provides supplemental power for quality, peak shaving, back-up, standby, etc. u Combinations of above Customer profile defines the optimal method of DG use 38 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

39 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Comparison of retail economics Baseload Intermediate Peaking Source: Recreated from Onsite Sycom 40 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Case Studies 41 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG Facilities in California u Fuel Cell Demonstration, SDG&E (75 k. W stack) u National Fuel Cell Research Center, UC Irvine u Gas Turbine Demonstration, SDG&E u Microturbine Development and Testing, ETS (30 60 k. W) u Photovoltaics Testing , ETS and SMUD 42 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG Facilities u Thomason General Hospital, TX Ø Cogen plant and energy efficiency project u Temple University, PA Ø Onsite generation with grid as back-up power u CSU Fresno, CA Ø DSM opportunities to reduce electricity consumption u Hannaford Grocery Stores Ø on-site generators, for about 150 stores in Northeast U. S. 43 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG facilities u Williams Companies Ø DG Test Center to evaluate technology, operation, controls, and system integration u Central and Southwest Utility Ø Request for Proposal for 280 MW of distributed resources u Orchid growers in California Ø DG to improve reliability in Summer when flowers are vulnerable to increasing outages, and reduce overall energy cost 44 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Small Scale CHP Installations u Waverly High School, NY (375 k. W) u Clark University, Massachusetts (1. 8 MW) u Sioux Falls Waste Water Plant, SD (400 k. W) u District 45 Energy Utility, MN (860 k. W) DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Medium Scale CHP Units u MIT, MA (22 MW) u Madden Mills, MA (8. 6 MW) u Univ. of N. Carolina, NC (28 MW) u Mc. Cormick Conv. Center, IL u Nassau county Facility, NY (57 MW) u Tulsa Plant, OK u Grand Ave. Station, OK u Trenton District energy, NJ (12 MW) u St. Louis System, MO (15 MW) 46 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Large Scale CHP systems (>85 MW) u Morris u Black Cogen facility, IL (117 MW) Mountain Cogen Plant, NV (85 MW) u Gray’s Ferry, PA (118 MW) u Orlando u Cambria 47 Cogen Plant, FL (120 MW) Cogen plant, PA (98 MW) DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Pleasanton Power Park u. A fine example of DG installation…. . u 19 acre industrial real estate development in Pleasanton, CA. u Industries include technology types to heavy manufacturing. Developed by Intergy and Panattoni Development Source: Intergy Development LLC 48 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Two components to the development u Real Estate Component: Ø 300, 00 sq. . feet Industrial Park u Energy Component: Ø Distributed Generation station / District Utility System Source: Intergy Development LLC 49 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Energy Component u Tri-generation station u District Utility Infrastructure u Green Energy Values: u Good Demo Site Source: Intergy Development LLC 50 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Benefits of this system…. Real Estate component: Energy component: u u u Energy efficiency design, lower energy utilization cost, added values to occupants, lower maintenance costs, environmentally friendly, reliable high quality power, u u u An energy asset in an energy congested area, on-site generation, efficient, reliable, quality power, leadership values, test bed for energy technologies. Source: Intergy Development LLC 51 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Distributed Generation in California Agencies / Organizations Judy Grau & Jairam Gopal Fuel Resources Office California Energy Commission Sacramento California April 13, 1999 52 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

State / Federal Agencies 53 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DG Organizations 54 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Standards Developers 55 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Model Code Organizations 56 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

CEC Programs and Resources That Support DER Judy Grau DER Program Manager 57 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

CEC Programs and Resources that Support DER u Energy Technology Development u Local Energy Assistance u Electricity System Modeling and Mapping u Energy and Environmental Issues Program u Energy Efficiency u DER Program 58 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Energy Technology Development u Public Interest Energy Research (PIER) Program u Renewable Energy Programs u Commercialization of Advanced Energy Technologies and Renewables Program u Energy Technologies Export Program u Energy Technology Status Report 59 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

PIER Program u Awards from the Transition and Phase I (1 st and 2 nd general solicitations) programs have been made (covered in previous presentation) u Status of Phase II funding: $62. 5 million in six program areas Øwww. energy. ca. gov/research/PIER/index. html ØSee: (1) Environmentally-preferred advanced generation; (2) Renewables; and (3) Strategic 60 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Renewable Energy Programs u Created by AB 1890 u $540 million over four years Ø Existing technologies ($243 million) Ø New technologies ($162 million) Ø Emerging renewables buy-down program ($54 million) Ø Customer-side programs ($81 million) u www. energy. ca. gov/renewables/index. html 61 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Commercialization of Advanced Energy Technologies and Renewables Program u. Seeks to advance commercialization of promising technologies through collaborative and other means ØCalifornia PV Alliance ØUS Fuel Cell Council 62 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Energy Technologies Export Program u Supports business development for California firms in the international energy arena u Grid-connected and off-grid industrial cogen and efficiency improvements in Asia and Latin America u www. energy. ca. gov/export 63 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Energy Technology Status Report (ETSR) u Most recent version is 1996 ETSR Report Summary Øwww. energy. ca. gov/etsr ØDetailed appendices not published u No recent version, due to staff redirections to PIER Program, but… ØStaff expertise is being maintained, and ØETSR could be revived if needed 64 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Local Energy Assistance u PLACE 3 S Program - PLAnning for Community Energy, Economic, and Environmental Sustainability u Provides methodology for energy-based land-use planning u Studies performed for BC Hydro, Euclid Avenue (San Diego) u www. energy. ca. gov/places 65 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Energy Aware Planning Guide II: Energy Facilities u Purposes Ø Assist local agencies in siting energy projects Ø Encourage expeditious permit review Ø Encourage project developers to consider cost-effective, environmentally-superior alternatives u Appendix B includes detailed description of technologies and their major permitting issues u See Energy Commission Web site: Ø www. energy. ca. gov/reports/energy_aware_guide. html 66 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Electricity System Modeling u Considerable experience in bulk power system modeling u Analyzes demand information down to county level u Staff provides support to CADER modeling subcommittee 67 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Electricity System Analysis u “A Survey of the Implications to California of the August 10, 1996 Western States Power Outage” u Contract with CSU Chico Survey Research Center u Surveyed 200 residential, 200 commercial, and 200 industrial customers in CA u www. energy. ca. gov/reports/70097003. html 68 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Survey Themes u u u 69 Experience with short outages Experience with longer outages Experience with August 10, 1996 outage (duration, economic loss) Back-up power supplies Contact with utility company u u u Insurance claims Worst-case outage scenario Level of satisfaction Importance of reliable service Ever analyzed financial impact of outages before? DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Electricity System Mapping u Transmission System Maps (down to 34 k. V) Ø www. energy. ca. gov/maps/transmission_lines. html u Power Plant Maps Ø www. energy. ca. gov/maps/power_plants. html 70 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Other Programs u Energy and Environmental Issues Program ØAddresses air quality issues CEC/ARB coordination meetings t participation in California Air Pollution Control Officers Association (CAPCOA) t u Energy Efficiency Program Ø Provides loans and technical assistance to schools, hospitals, buildings, etc. Ø Provides grants, loans, etc. to agricultural and food processors, industry, and wastewater 71 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

DER Program u Formalized in Fall 1998 u Reports to Siting Committee (Commissioners Laurie and Rohy) u Integration of all CEC programs with DER component u Supports CADER functions Øwww. cader. org (soon!) 72 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999

Other Agencies’ DER Efforts/Interests u Air Resources Board u Public Utilities Commission u Electricity Oversight Board 73 DG Seminar on R. . 98 -12 -015 / 99 -DIST-GEN(1) / Sacramento, CA / April 13, 1999