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Erwinna, PA  18920-9251

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Engineers & Consultants


Distributed Generation

Distributed generation (DG) is the on-site generation of energy, often with the added production of heat for either process or heating/refrigeration applications.  On-site production of energy can make the facility less dependent on the local electric distribution grid or remove the facility entirely from reliance on the grid.  In many cases the site may qualify as a non-utility generator and sell excess production into the energy distribution network.

Often, the motivation for implementing distributed generation is cost saving and/or enhanced reliability.  Distributed generation can make economic sense in those situations where the facility can use both the generated electric energy and the process heat.  Such an on-site plant can achieve upwards of 85% thermodynamic efficiency, whereas purchasing energy from the grid may only represent a 35% efficiency level.  However, cost saving is not the only motivation: reliability of energy supply can be the primary driver.  If a manufacturing or health facility cannot tolerate any period of energy loss, then a stand-by energy source is mandatory to protect against power loss from such occurrences as storms, general power grid failure, and brown outs.

The economic evaluation of distributed generation depends in large measure on the rate (tariff) structure of the incumbent utility.  Interruptible rates from the utility allow a facility to be denied service during period of high demand, and for that allowance, energy is provided at a reduced rate.  A back-up energy source, for those operations that cannot tolerate an indefinite shut-down, would be provided by on-site generation.  Alternatively, many utilities access a ratchet factor during non-peak months (typically the winter season), the magnitude of which is determined by the facility's demand level during peaking months (the summer period).  The result of such a ratchet factor is that the facility will pay for unutilized demand.  On-site generation can be applied in the peaking months to run in parallel with the grid's energy supply to the facility for peak shaving and ratchet cost avoidance. 

Distributed generation equipment is available in a wide capacity range, from about 20kW to over 200MW.  Generator fuel sources can be steam, natural gas or gas liquids, fuel oil, diesel fuel and biodiesel.  Many prime movers can operate on dual fuels and thereby capitalize on fuel sources that are most economical.  Additionally, generation systems can be configured to schedule operation when the overall cost to the facility is at a minimum.

Economic evaluation of distributed generation is complex.  A large number of factors need to be considered; current and projected electric rates, the need for process heat, reliability of operations, fuel availability and cost, siting and environmental issues and costs, opportunity for energy resale to the grid, and others.  Brice Associates, LLC can perform distributed generation feasibility studies and examine the economics from a variety of potential operational scenarios.  As an independent engineering consulting organization, Brice Associates, LLC can provide an honest appraisal of the most economically advantageous approach to distributed generation for our clients.  If it is determined that the economics are favorable, Brice Associates, LLC can manage the entire process of specification, procurement, installation, start-up and training.



2004 Brice Associates, LLC                                                                                                                                                                           Updated: April 2009