The various established GreenBuilding standards and guidelines while different (examples: LEED, Green Globe, Energy Star, ASHRAE 90.1, etc.) in details and scope are all similar in the fact that they reward the energy efficiency of a buildings design and operation. From a purely philosophical perspective there is something noble or “higher order” in a building that utilizes the energy in the form of electricity and fuel that goes into it with the smallest amount of waste possible. Savvy Engineers have known for a long-time that there are certain activities that are energy intensive where making electricity and heat on-site within a building is where you can achieve the highest efficiency or overall energy use of a fuel.
Before going further, it should be noted that there are numerous terms being used in the industry today – each having a slightly different connotation, but all of which describe a concept that is in contrast to conventional large-scale central station power generation. Distributed generation (DG), distributed resources (DR), distributed energy (DE), distributed energy resources (DER), dispersed power (DP), or combined heat and power (CHP – formerly cogeneration) are the use of small-scale power generation technologies located close to the load being served. For this report, the authors will use the term DG. It is a more general term that includes stand-alone power generators – with or without heat recovery. The stakeholders include energy companies, equip ment manufacturers and suppliers, regulators, energy users and financial and supporting institutions. DG can help end-users reduce energy costs, improve reliability, reduce emissions, or expand their energy options.
Distributed generation technologies have received much attention, principally due to the potential energy savings and the increased reliability that may be achieved as a result of the deployment at end-user facilities. DG technologies include reciprocating engines, gas turbines, micro-turbines and fuel cells. A detailed discussion is included in Appendix 1. On a local level in Connecticut, several additional factors are fueling interest and removing barriers to market development:
FERC has identified the electric transmission constraints in Southwest Connecticut as “the nation’s number one priority area of electric reliability concern.”
In the summer of 2005, the Connecticut Legislature passed the “Connecticut Energy Independence Act (PA 05-07)” providing widespread incentives to promote the installation of new Distributed Generation facilities in the State with the motive that new capacity of this type would provide considerable benefit.
The importance of new Connecticut legislation is that it is the first in the nation to offer lost electric distribution system revenue relief to the electric utilities; in fact, the final decisions include incentives for the State’s electric utilities and allow for their sharing of the profit based upon project development.
In April 2006, The DPUC finalized eight months of ongoing regulatory activities targeting the implementation of a capital incentive plan, a discounted natural gas rate and guaranteed third party financing for new Distributed Generation Projects.
The DPUC decision orders that customers will be eligible to receive:
monetary grants in proportion to the amount of electric load they will remove from the grid
gas rebates that will result in the waiver of gas distribution charges for natural gas used by these facilities (paid for by electric customers),
lower back-up charges for these customers in the event that they need to take power from the electric company if their own system isn't operational, and renewable energy credits that can be generated by customers which they can sell into the market to assist in offsetting a project's costs.
In addition, the DPUC has also contracted with Bank of America (BOA) to provide low interest loans to customers that seek to finance these investments over a number of years. Under the terms of the current agreement, BOA will offer financing through the end of this year, or until $150 million worth of projects has be financed through the program. As required under the new law, the interest rate charged to customers will be guaranteed to be no greater than the prime rate. Any buy-down of interest charges to get to the prime rate level will be paid by electric ratepayers.
Over the last ten years, the growth of DG market sector in Connecticut has been significant however the State and Federal Government are interested in increasing the market growth. New technologies (fuel cells, micro turbines) and the current focus on removing barriers to DG development are expected to drive the continued growth of the small project market. This small-project market sector is the one that is truly emerging.
Natural Gas Cooling
Natural gas cooling technology is increasing in use as an alternative to more traditional electric alternatives due to increased electric capacity constraints, transmission and distribution, and delivery issues.
It offers users several benefits. First, it offers users’ flexibility as it can be used as a facility’s only cooling source or may be used in combination with electric systems or other thermally activated CHP systems to reduce electric peak-use and capitalize on differences in energy prices. It offers savings from reductions in critical summer electric-peak loads as well as greater energy reliability. Also, it reduces the impact on the environment by lowering electric power needs thereby reducing power plant air emissions, and less reliance on electric power reduces the need to build new central station power plants and the associated transmission facilities. Also, certain natural cooling technologies do not use CFCs favoring their use in green buildings.
Natural Gas cooling has a broad range of uses. These include space cooling, process cooling, refrigeration as well as dehumidification and other specialized applications. It is used in office buildings, residential complexes, manufacturing facilities, ice rinks and in supermarkets among others.
Major equipment manufacturers’ provide absorption, engine and desiccant equipment ranging in size from 3 tons to over 3,000 tons
Special Gas Cooling Incentives in CL&P’s Service Area
Also, Connecticut Light & Power (CL&P), the electricity provider in a portion of Connecticut, has offered limited incentives for natural gas cooling when used to reduce electric-peak consumption.
Appendix 1: Distributed Generation Technologies
May 22, 2006
For more information about distributed generation and natural gas cooling in Connecticut, please contact: Mike Smalec, Manager—C&I and Key Accounts, Connecticut Natural Gas and Southern Connecticut Gas. He can be reached at (203) 795-7748 or at msmalec@soconngas.com.