Case Study - Distributed Embedded Power Generation

Existing standby gensets can be turned into revenue generators! Utilities are faced with many challenges when it comes to adding generation. Starting with the obvious construction costs, add the NIMBY (Not In My Back Yard) factor, transmission costs, maintenance costs, and environmental compliance and you can imagine the headache. Cole Cacciavillani with GenSet Resource Management within CF Industrial Group, has developed a program to solve many of these challenges at one time. He has worked with Ontario Hydro under the auspices of the Independent Electricity System Operator (IESO) program to pay owners of existing generators for their units just to be dispatchable by the utility. And they get even more money when they provide power into the grid!

“Utilities can’t get power to where they need it,” Cole says, “our [generators] export power in times of constraint” to the local grid, “keeping the power local. These are embedded and distributed generation.” To the utility, embedded in the system means reduced transmission losses and the connection is not dependent upon the main breaker or other components in the user’s switchgear: they have their own breaker to tie the generator directly into the grid ahead of the meter, not inside the user’s system like most distributed generation. Another breaker is there for standby generation, just like a typical standby system. Several smaller generators around the system make it easier and more efficient to add power where it is needed, not many miles away with all the transmission losses. Starting at about 500KW and now targeting 1 Meg generators, Cole says, “owners typically get about $40,000 a year” just to have them available to be dispatched by the utility. More income is possible as run times increase. Return on investment times are typically 2.5-3.5 years, less if factored into a new installation. GenSet Resource Management does all the paperwork and bundles 6 or 8 or 10 or more generators into a block large enough that the utility can count them into their available KW numbers, eliminating the need to build new power plants. The owners get the advantage of having the maintenance and fuel costs included in the contract and have generators run under full load several times a month on fresh fuel, so they know their emergency power systems will work when they are needed. In addition, when it comes time to periodically test the generator as required under regulations, the power can be returned to the grid instead of being dumped into load banks with the associated environmental benefits.

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