Abstract
The practicality of any particular distributed generation (DG) installation depends upon its ability to reduce overall energy costs. A parametric study summarizing DG performance capabilities is developed using an economic dispatch strategy that minimizes building energy costs. Various electric rate structures are considered and applied to simulate meeting various measured building demand dynamics for heat and power. A determination of whether investment in DG makes economic sense is developed using a real-time dynamic dispatch and control strategy to meet real building demand dynamics. Under the economic dispatch strategy, capacity factor is influenced by DG electrical efficiency, operations and maintenance cost, and fuel price. Under a declining block natural gas rate structure, a large local thermal demand improves DG economics. Increasing capacity for DG that produces low cost electricity increases savings, but installing further capacity beyond the average building electrical demand reduces savings. For DG that produces high cost electricity, reducing demand charges can produce savings. Heat recovery improves capacity factor and DG economics only if thermal and electrical demand is coincident and DG heat is utilized. Potential DG economic value can be improved or impaired depending upon how the utility electricity cost is determined.
Highlights
Distributed generation involves the use of small-scale electrical generators to provide power at the point of use
The results presented in this paper are specific to the building and distributed generation (DG) combinations examined under the specific utility rate structures assessed
DG would perform at other buildings if the building energy profile falls within the span of the building energy profiles used in this study and the utility rate structures are similar in magnitude and structure
Summary
Distributed generation involves the use of small-scale electrical generators to provide power at the point of use. Shifting from centralized generation to distributed generation provides numerous benefits to individual customers, utilities, and society as a whole, including the potential for increased system efficiency, reliability, and power quality, as well as reduced grid demand, delivery losses, central generation investment, maintenance, expansion, and emissions [1]. Despite these benefits, it is estimated that distributed generation accounts for less than three percent of all installed generation capacity in the United States, with distributed generation smaller than 1 MW accounting for less than 1% [2]. The effect of switching to the parent rate structure from the standby rate structure is discussed
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