Ensuring Reliable Electricity Supplies Using Distributed Generation Gregory Tress Carnegie Mellon University

Overview Introduction The Power Grid Power Disruptions Infrastructure Issues Distributed Generation Solutions

Introduction What is distributed generation? – EPA definition: “Small, modular, decentralized, grid-connected or off- grid energy systems located in or near the place where energy is used.” Goals for electricity generation and delivery – Reliable – Affordable – Efficient – Environmentally friendly

What is the problem? – We are addicted to electricity Introduction – We can consume any amount of power at any time – In most cases, this is not a problem – Under the right circumstances, it can be a big problem

Introduction What is the problem? – Northeast Blackout, 14 Aug 2003 – 50 million people affected Before During

The Power Grid GenerationTransmissionDistribution substation

The Power Grid substation Electricity High power flow in transmission lines The classic model

The Power Grid substation Electricity “Distributed” Generators What can distributed generation do?

Power Disruptions Classification – Power shortages Blackout: complete loss of power Rolling blackout: intentional, temporary shutoff Brownout: voltage reduction, may be intentional – Power quality issues Voltage and frequency fluctuations

Power Disruptions Commercial and Industrial Impact – U.S. economy is losing over $100 billion / year

Power Disruptions Commercial and Industrial Impact – Critical economic sectors are at risk Data storage, retrieval, processing Research and development operations Telecommunications Financial operations Precision and general manufacturing Transportation Utilities (e.g. water, natural gas)

Power Disruptions Residential consumer impact – Power-sensitive high-tech devices Possible equipment damage Expensive to replace or repair Possible irreversible data loss – Essential devices Refrigeration Heating and cooling Medical

Infrastructure Issues Why isn’t the system reliable now? – High peak demand – Delivery bottlenecks – Grid fragility – Power Loss

Infrastructure Issues The demand pattern – Higher during the day, lower at night – Higher in the summer, lower in the winter – Result: highest during the day in the summer Why does this matter? – We don’t know how much higher it will be

Infrastructure Issues The demand pattern – Sample residential area: winter vs. summer day Maximum transmission capacity

Infrastructure Issues The bottleneck – “Inadequate investment in transmission infrastructure... costs consumers tens of billions of dollars a year in higher energy costs and lost productivity” -- National Commission on Energy Policy

Infrastructure Issues The bottleneck – Transmission loading relief events (TLRs) recorded when lines reach full capacity – Quantitative indicator of transmission congestion

Infrastructure Issues The fragile grid – Equipment limitations Safety systems (e.g. circuit breakers) are designed to prevent dangerously high power flow Customers don’t know how high total demand is – Cascading failure A single equipment failure can cause a chain reaction Lack of redundancy increases risk and severity

Infrastructure Issues Power loss – Transmission loss 6-8% during peak demand – Heat released into atmosphere

Distributed Generation Classification – Dispatchable Turned on and off when necessary Fossil fuel, biofuel powered – Intermittent Not precisely controllable or predictable Solar, wind

Distributed Generation Clean power … but at what cost?

Distributed Generation The impact of intermittent generation – Reliability decrease Maximum generation doesn’t necessarily match up with maximum demand – Transmission increase Wind and solar have specific geographic requirements. Delivering this power to other areas will add to existing transmission congestion.

Distributed Generation Dispatchable generators: the solution? – Can satisfy peak demand – Not susceptible to transmission bottlenecks – Increase grid stability and redundancy – Reduce atmospheric power losses

Distributed Generation Dispatchable generators: the solution? – High efficiency Up to 90% for combined heat and power generation – Works well with intermittent generation Operates when wind and solar can’t – Flexible local fuel sources Can use existing natural gas lines or locally-produced biomass/biofuels. – National energy security

Distributed Generation Dispatchable generators: the downside – Environmental impact – Public opposition – Additional points of failure – Capital cost $500-$1000 per kW to install typical generator unit Average residence uses 1-2kW; more during peak $500-$4000 or more per household over lifetime of the generator, plus land, upkeep, etc

Solutions Combination of factors is at fault – Each problem can be fixed independently – Distributed generation can solve most at once Reliability is limited – Impossible to reach 100%

Solutions Standards already exist – FERC Order 888 & 889 (1996) Opens transmission lines to competition – FERC Order 2006 Small generator interconnection agreements and procedures – IEEE Standard 1547 Standard for interconnecting distributed resources with electric power systems

Solutions Government has spoken – Energy Policy Act 2005 $800 million for distributed projects and research Includes focus on reliability, efficiency, emergency supply, effect on rates, advanced metering, residential grid connectivity, grid design and planning – Environmental Regulations EPA Clean Air rules in effect National preference for clean, “green” power

Solutions A question of value – High cost for non-obvious increase in reliability – Desire for cheap power vs. desire for reliability – Some customers are already installing their own systems (or backup supplies) – Should we force all customers to pay for distributed generation?

Solutions Do we need distributed generation? Other options: – Add transmission capacity – Reduce consumption – Implement variable-rate billing – Deploy electricity storage units – Sell smart appliances – Do nothing

Conclusion There’s no clear winner – Distributed generation (both intermittent and dispatchable) is already being adopted without much government intervention – Many consumers may not want distributed resources or care about reliability (this must be assessed before making policy decisions) – Environmental impact can still be significant, even with high efficiency and limited operating time

Conclusion Incentives can still be helpful – Potential market in individuals, groups, or businesses for whom distributed resources would be cost-effective – Directed incentives or financial assistance would enable adoption for specific economic sectors – It may not be for everyone.

Thank you