The report begins with an examination of five distributed resource (DR) technologies—natural gas–fired reciprocating engine-generators, natural gas–fired turbine-generators, solar photovoltaic (PV) panels, wind turbines, and natural gas fuel cells. For each technology, capital cost and performance data from an actual utility-owned plant are provided, as are the characteristics and applications of the technology. The growth of installed capacities, price trends since the late 1990s for wind and solar PV, and the effects of government incentives (including tax benefits, summarized in Appendix A) and environmental regulations are considered.
Next, the report explores the incorporation of demand-side management options in many utilities’ strategic plans—specifically, how DRs are generated, the demand response, and energy efficiency. The integration of delivery systems is covered, including interconnection. Distributed generators must enter into agreements with their local distribution utilities in order to connect to and be allowed to interface their generation with the grid.
One challenge that DRs present to the electric grid is maintaining system balance in the face of voltage variations. This report looks at the problem in detail, along with the standards that exist now and the need for revised standards. Hawaii Electric Company, which is beginning to encounter challenges because of high levels of penetration in that state, is included as an example.
The report addresses DR-related safety concerns, including islanding, where the DR unit continues to provide power into a feeder that the electric utility is no longer supplying because of an outage or other cause. The report concludes with an overview of business models and legal and regulatory considerations. The experiences of Germany, the leader among industrialized nations in promoting distributed generation, are of particular interest.