Distributed Generation is the term used to describe power plants that generate small amounts of electricity. Often they can be located close to where the electricity is used. They are or can be "distributed" where electricity is needed (thus the name). Types of Distributed Generation include solar power, wind power, diesel or gas generators, fuel cells, microturbines and others.
Some co-op members have asked why their local cooperative is not more involved in distributed generation projects. This article is meant to provide a better understanding of some of the factors that are considered in the development of generation resources. First, a few terms need to be defined:
Distributed Generation means relatively small quantities of electric generation are located closer to the point of use.
Central Station Generation means large quantities of electric generation located where fuel can be efficiently delivered.
Demand is the electricity that is required at any time.
Peak demand is when the most electricity is required.
Baseload plants operate 24 hours a day, seven days a week, 52 weeks a year. Because fuel costs are lower, baseload plants are generally coal or nuclear plants.
Peaking plants operate only when electricity demand is high. Peaking plants can use more expensive fuel (natural gas, diesel fuel) because they do not run all the time.
Power plants vary. Not all generation plants are the same. Some are best suited to run at a constant level 24 hours a day, seven days a week. These are called baseload plants.
Other generation units are less expensive to build but require a more expensive fuel. They are better suited to run for shorter periods of time to meet peaking conditions. These are peaking plants.
Still other units are design to follow the constantly changing load pattern. Under some conditions, it is cost effective to reduce the load on a generation station and purchase power from another generation supplier.
Electrical energy is generated as it is used. The loading of generators and purchases to achieve the lowest possible average cost of power for the co-op members changes minute by minute.
Common DG sources:
wind, photovoltaic
Distributed Generation (DG) units are, in general, relatively small in size and located close to the point of utilization. They may supply power on an intermittent basis, for example, when the wind blows or when the sun shines. Even when intermittent DG units are operating, the electric utility must have generation available to supply the load when the wind stops blowing or the sun goes down. This is the reason that, when an individual looks at the rate a utility is willing to pay for DG, it is usually not very much compared to the cost of dependable power from the utility.
Although DG units are relatively small, they still require some maintenance and administrative services (such as meter reading and billing services). Skilled labor is costly, and the maintenance on some of these units is relatively high. They are particularly high when their costs are compared on a per-unit-energy basis with baseload plants.
These facts, coupled with the cooperative's desire to provide available, low-cost, electrical energy to the members, explain why co-ops have not aggressively pursued distributed generation.
Cooperatives try to respond to their membership. Members are requesting involvement in DG because of the non-monetary benefits. Members want a reliable source of electrical energy, but they do not want any more overhead power lines built. Most members understand that DG units do not offer monetary benefits in the traditional sense. Distributed generation is more expensive to use, for an electric cooperative, than central station generation.
DG: The right solution
Intermittent power can be a good fit for some applications. When power is needed in small amounts for a short period each day, DG sources are appropriate.
Small-volume water pumping applications that are a long distance from existing power lines are ideal applications. (The cost of installing an overhead power line for a small amount of electric energy makes this investment unattractive for both the member and the cooperative.)
When the cost comparison is between having a pump and not having a pump, distributed generation is not too expensive. It's a reasonable option for the co-op member.
Co-ops can help
Cooperative employees have knowledge that is useful in the development of these remote electrical islands. Co-op specialists are willing to work with members, providing information that can be used by the member to establish DG solutions.
When a member wants to install distributed generation, the local cooperative can become an information source for public safety, regulatory compliance, and metering. Regulations guide the connection and metering of these units when they are connected to the cooperative's electrical system.
State law requires that the co-op (or other electric utility) purchase any excess energy under 25 kilowatts that a member can produce beyond that required to serve their own needs.
Why savings are elusive
The most popular types of DG (wind and solar) are not able to respond as needed to electrical demand. Electricity from wind and solar is available as the wind or sun, respectively, is available. Because they cannot respond to electricity demand, these types of DG units do not mean the cooperative can have smaller or fewer installed facilities. Regardless of who owns them, DG units do not save the co-op plant-investment dollars. The co-op is able, however, to reduce its fuel cost thanks to the generation DG units provide.
Public safety and the safety of linemen is a high priority in the electric industry. Connecting DG units to cooperative power lines in various places across the co-op's service territory introduces a potential electrocution hazard. The DG unit may feed electricity onto a line otherwise considered dead. The introduction of DG units requires that the settings on devices that protect lineworkers need to be altered and in some cases the devices must be changed to accommodate potential dangers.
What's best for all
In summary, electric cooperatives have not aggressively pursued distributed generation sources because they are not economical for the membership as a whole. Electric cooperatives, however, are willing to assist any co-op member if he or she wishes to purchase and install one or more DG units.
Electric co-ops exist to provide the least expensive electrical service to their members. Co-ops are guided by their members. If members determine that "least expensive" includes a substantial investment in distributed generation, the co-op will so invest. There is no level of regulation stronger for a co-op than the voice of the membership.
Jim Kirsch is a former electric co-op manager and operations manager in Wyoming. This article first appeared in the February, 2006, issue of the WREN magazine. It is reprinted here with permission.
