2005 REGION 4 EPA/ DoD/STATES/ ENVIRONMENTAL CONFERENCE “Small is beautiful!” (and better!) June 29, 2005 Chuck Tremel, P.E. Principal Technical Manager.

2005 REGION 4 EPA/ DoD/STATES/

ENVIRONMENTAL CONFERENCE

“Small is beautiful!” (and better!)June 29, 2005Chuck Tremel, P.E.

Principal Technical ManagerAdvanced Energy Program

Topics

Drivers for Distributed and Renewable Energy

Distributed Energy and Combined Heat & Power

Renewable Portfolio Standards Renewable Energy Opportunities &

Examples Interconnection Issues Renewable Energy Prognosis

The Drivers of Distributed and Renewable Energy for Energy Security

Electric power sector returns to pursuing future resources, while confronting electric delivery system issues

Log-jam of liquified natural gas (LNG) terminal additions• Just how many will be built, and when?• Will it solve the supply/price problems?

Coal plant construction discussions growing (but what of carbon dioxide & mercury?)

Nuclear talk grows (100 new plants in 20 years?), but no orders yet

A tenuous balance between supply and demand• FERC worries PNW drought could push up prices short-

term, even lead to interruptions• Longer term, early hints of integrated resource planning

coming back

High Natural Gas Prices Will Continue

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Historic natural gas prices

Natural gas futures

Source: NYMEX, natural gas end-of-month closing price through 5/05, with futures price through 12/08

Fuel-driven DE Prime Mover Technologies

Reciprocating engines Gas turbines Microturbines Fuel cells Stirling engines

Electrical capacity

<1 kW - 80 MW 300 kW - 334 MW 30 kW - 250 kW <1 kW – 1.5 MW 1 kW - 55 kW

Applications Standby, peaking, prime power

Peaking& prime power

Peaking& prime power

Prime power Prime power

Fuel Liquidand/or gaseous

Liquidand/or gaseous

Liquid or gaseous Liquid or gaseous Any heat source

Emissions Medium to high(low with treatment)

Medium to low Medium to low Extremely low Potentially low (external combustion)

Maturity Very mature Very mature Maturing, 2nd & 3rd generation

Early market entry Early market entry

Annual shipments (2004)

~40,000 MW* <1,000 MW* 23 MW ~10 MW ~9 MW** (2005)

* For units less than 10 MW

** Stirling engines 2005 estimate

Payback for CHP Lengthened by High Gas Prices, Public Sector still Attractive

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6 mos. 1 yr. 2 yrs. 3 yrs. 4 yrs. 5 yrs. 6 to 10yrs.

11+ yrs.

Restaurants

Education

Manufacturing

Wholesale

Retail

Services

Government

Source: Primen’s 2003 Distributed Energy Market Survey

Microturbines Initiate a Turn-Around

Shipments rose for first time since 2001− Up 3.2 MW (three

projects)− But far below peak

year of 67 MW shipments

Inventory at distributors nearly gone

Fuel Cells Challenged; Progress Continues

Shipments of stationary fuel cells are flat, roughly 10 MW/year

PEM companies continue to face stack life issues, while sales of hydrogen products weak

Solid oxide companies remain challenged by technology, economics− Rolls-Royce, however, picks up $100 million

investment from Singapore consortium UTC abandons PEM stationary plans in favor of

modified Phosphoric Acid FC product− 400-kW stack to have 80K hour life, new power

electronics package Starwood Hotels proves to be repeat customer

with FuelCell Energy− Three projects operating; fourth signed, potential

for more

CTC 5 KW Fuel Cell Project - Ft Meade

3 kWe @ 208/120 VAC, 3 phase; 3 kWth

Combined Heat & Power

Natural gas input; electricity and heat output

Heat used to dehumidify locker room

The Upshot for Distributed Energy

Backup market growing again for critical loads

Peaking and CHP growth slow, primarily due to high gas prices

20 Renewable Portfolio Standards Now Approved, with More on the Way

RPS mandates in IL and VT are pending

Wind Boom Continues

Global wind capacity at 48 GW end of 2004, was 8.2 GW capacity on-line 2003– Forecast of 117 GW by

2009 U.S. capacity at 6.7 GW,

389 MW added in 2004– AWEA predicts 2-2.5

GW in 2005– RPS laws-on-the-books

could lead to as much as 40 GW in next 15 years

5 MW turbine commissioned by REPower (Germany); 94% availability

Wind: System Design Challenges?Western Denmark facing T&D issues from too much

wind, which now makes up 23% of power produced in the region

Similar problems cropping up in US (Texas, etc.) and solutions sought Inadequate load-following capability, and unlikely

that new firm capacity will be built Poor predictability of wind power, with wires

company purchasing costly regulating power Reactive power needs balancing, with increased

grid losses and expensive compensation Unpredictable local networks (distribution

systems), leading to an increased risk of serious system disturbances

Wind at Guantanamo Bay

Four NEG Micon 950 KW Turbines

275 feet tall; 177 ft. Blade rotor diameter

Augments 22.8 MW diesel fired stand-alone system

Cost: $12 Million Avg. Production – 8 Million

KWH/ Year Savings of $1.2 million

energy costs Environmental Benefits

– Reduce 26 tons SO2– Reduce 15 tons NOX– Reduce GHG 13 Million

pounds

USA Photovoltaics Market Installations

2003 – 66 MW; 574 MW World 2004 – 84 MW; 927 MW World 2010 – ????; 3200 MW World

Source: Solarbuzz Inc.

North American Solar Boom to Continue, but Without Coordination

Status of PV varies state-by-statean “archipelago”

State subsidies/programs expanding Nearly 1/3 of states with buy-down programs California’s Million Solar Roofs initiative moving in

state legislature Market potential for rooftop PV of nearly 3 GW/year

by 2010

State mandates expanding, too Renewable portfolio sub-requirements in

– Arizona– Colorado– Nevada– Pennsylvania

PV at 29 Palms USMC Air Ground Combat Center

BP Solar EnergyMax System

320 sunny days/year 1,291 KW (Peak) 2,530,000 KWH/ Year ~ 5% of annual

electricity needs 8000 solar modules

over 7 acres Peak output coincides

with summer demand

Biomass Opportunities Growing, Too, Though Less on a Single Industry

Catch-all term, includes alternative fuels– Land-fill & digester gases– Other “organics recycled

to energy” fuels (e.g. BioDiesel from Soybeans)

– “Healthy Forests” initiative slash/thinning

– Cofiring in coal fired plants (e.g., Switchgrass)

Significant environmental benefits

Distributed Energy Resources

Interconnection Technologies

Electric Power Systems

Fuel Cell PV

Microturbine Wind

Utility Grid Simulator

Generator

Inverter

Switchgear, Relays, & Controls

Functions

•Power Conversion

•Power Conditioning (PQ)

•Protection

•DER and Load Control

•Ancillary Services

•Communications

•Metering

Micro Grids

Energy Storage

LoadsLocal Loads

Load Simulators

Utility Grid

The Upshot for Renewable Energy

Renewable energy mandates expanding; though very uneven, inconsistent, government support

Wind having a record year, but challenges beginning to surface

Solar photovoltaic markets growing, with more to come

Green pricing still growing, despite RPS mandate proliferation

Expect more policy support