Distributed Energy Resources (DER)  

Increased demands on the nation's electrical power systems and incidences of electricity shortages, power quality problems, rolling blackouts, and electricity price spikes have caused many utility customers to seek other sources of high-quality, reliable electricity. Distributed Energy Resources (DER), small-scale power generation sources located close to where electricity is used (e.g., a home or business), provide an alternative to or an enhancement of the traditional electric power grid.

DER is a faster, less expensive option to the construction of large, central power plants and high-voltage transmission lines. They offer consumers the potential for lower cost, higher service reliability, high power quality, increased energy efficiency, and energy independence. The use of renewable distributed energy generation technologies and "green power" such as wind, photovoltaic, geothermal, biomass, or hydroelectric power can also provide a significant environmental benefit.

 

Fig. 1: Types of distributed energy resources and technologies
Image courtesy of the California Energy Commission

 

 

 

 

Self-Cooling-EN-215 Outdoor Distributed Energy Storage Cabinet - Power Type

DESCRIPTION

A. DER Taxonomy

Distributed energy resources (DER) are electric generation units (typically in the range of 3 kW to 50 MW) located within the electric distribution system at or near the end user. They are parallel to the electric utility or stand-alone units. DER have been available for many years, and are known by different names such as generators, back-up generators, or on-site power systems. Within the electric industry the terms that have been used include distributed generation (DG), distributed power (DP), and DER. Note that the use of "DER" in this Resource Page refers to the broadest range of technologies that can provide power to the user outside of the grid, and includes demand-side measures.

Distributed Generation—Any technology that produces power outside of the utility grid (e.g., fuel cells, microturbines, and photovoltaics)

Distributed Power—Any technology that produces power or stores power (e.g., batteries and flywheels)

Distributed Energy Resources—Any technology that is included in DG and DP as well as demand-side measures. Under this configuration, power can be sold back to the grid where permitted by regulation.

B. Types Of DER Technologies

DER technologies consist primarily of energy generation and storage systems placed at or near the point of use. Distributed energy encompasses a range of technologies including fuel cells, microturbines, reciprocating engines, load reduction, and other energy management technologies. DER also involves power electronic interfaces, as well as communications and control devices for efficient dispatch and operation of single generating units, multiple system packages, and aggregated blocks of power.

The primary fuel for many distributed generation systems is natural gas, but hydrogen may well play an important role in the future. Renewable energy technologies—such as solar electricity, biomass power, and wind turbines—are also popular.

The following table from the California Distributed Energy Resources Guide provides information regarding DER technologies that are commercially available as well as those still undergoing development. Some of the technologies are listed in both categories because they are currently commercially available but are also undergoing a significant level of further research and development.

C. Characteristics Of DER

Some of the primary applications for DER include:

• Premium power—reduced frequency variations, voltage transients, surges, dips, or other disruptions
• Back-up power—used in the event of an outage, as a back-up to the electric grid
• Peak shaving—the use of DER during times when electric use and demand charges are high
• Low-cost energy—the use of DER as base load or primary power that is less expensive to produce locally than it is to purchase from the electric utility
• Combined heat and power (cogeneration)—increases the efficiency of on-site power generation by using the waste heat for existing thermal process

Generally, DER provides the consumer with greater reliability, adequate power quality, and the possibility to participate in competitive electric power markets. DER also have the potential to mitigate overloaded transmission lines, control price fluctuations, strengthen energy security, and provide greater stability to the electricity grid.

ACCESSIBLE: N/A

AESTHETICS

• Improves sightlines and views with off-the-grid systems, which eliminate the need for overhead power lines
• Gives more choice in energy supply options; allows customers to choose the best solution for an individual location

COST-EFFECTIVE

• Enables cost savings by reducing the peak demand at a facility, therefore lowering demand charges
• Provides greater predictability of energy costs (lower financial risk) with renewable energy systems
• (See Section F: Economics of DER)

FUNCTIONAL

• Provides better power reliability and quality, especially for those in areas where brownouts, surges, etc. are common or utility power is less dependable
• Facilitates DER equipment efficiency improvements when used in combination with combined heat and power equipment for heating, cooling, and dehumidification applications
• Provides power to remote applications where traditional transmission and distribution lines are not an option. Locations such as cellular towers, small remote towns, or drilling platforms in the ocean are outside the electric grid and benefit from DER as a primary power source
• Possesses combined heat and power capabilities
• Reduces upstream overload of transmission lines
• Optimizes utilization of existing grid assets—including potential to free up transmission assets for increased wheeling capacity
• Improves grid reliability
• Facilitates faster permitting than transmission line upgrades
• Provides ancillary benefits—including voltage support and stability, contingency reserves, and black start capability (ability of a generating unit during a system restoration to go from a shutdown condition to an operating condition and start delivering power without assistance from the electric system)

Fig. 2: This photovoltaic installation, located in a showcase eco-industrial park, will prevent more than 6,000 tons of pollutants from being released into the air over its lifetime. Cape Charles Sustainable Technology Park—Cape Charles, Virginia
Image courtesy of PowerLight Corp.

PRODUCTIVE

• Some DER equipment provides high quality power for sensitive applications
• Responds faster to new power demands—as capacity additions can be made more quickly
• Facilitates less capital tied up in unproductive assets—as the modular nature of distributed generators means capacity additions and reductions can be made in small increments, closely matched with demand, instead of constructing central power plants sized to meet estimated future (rather than current) demand
• Back-up power decreases downtime, enabling employees to resume working

SECURE/SAFE

• Strengthens energy security
• Back-up power provides quick recovery after an event

SUSTAINABLE

• Provides cleaner, quieter operation, and reduces emissions for some technologies (e.g., solar, wind, fuel cells)
• Reduces or defers infrastructure (line and substation) upgrades
• Possesses higher energy conversion efficiencies than central generation
• Enables more effective energy and load management

D. Characteristics Of DER Technologies

Source: Andersen, Reprinted from Public Utility Reports, Inc., from the Summer 2001 issue of Fortnightly's Energy Customer Management

E. Getting Started With DER

It is important to thoroughly understand the relevant issues related to DER before installing any DER technology/equipment. The following general steps will help one get started with DER:

• Clarify the reasons for wanting DER
• Identify the current and future technology options
• Evaluate the cost and savings
• Understand the regulations and project development process
• Understand the risks and uncertainties.

The following table from the California Distributed Energy Resources Guide summarizes the types of questions that need to be answered when purchasing DER equipment that will meet the energy requirements at an acceptable cost.

F. Economics Of DER

Cost is an important factor when considering the purchase of any product, including a DER technology. However, determining the cost of a DER technology is often more complex than simply purchasing a piece of hardware at a published price. In addition to equipment (or capital) cost, there are labor and other expenses related to installing the equipment. The cost of electricity produced by the DER technology can also be estimated and compared to the price currently being paid for electricity from the power grid.

APPLICATION

Fig 3. Fuel cells installed at a police station in NYC's Central Park.
Image courtesy of UTC Fuel Cells

Users of DER have different power needs. Hospitals need high reliability (back-up power) and power quality (premium power) due to the sensitivity of equipment. Industrial plants typically have high energy bills, long production hours, and thermal processes, and would therefore seek DER applications that include low-cost energy and combined heat and power. Computer data centers require steady, high-quality, uninterrupted power (premium power). DER technologies are available now and are being developed to meet these needs.

DER projects include:

• A police station in New York's Central Park bought a fuel cell to run its electronic crime-fighting equipment, saving $200,000 over the cost of a line upgrade. More... 

• The Shop 'n' Save supermarket chain has installed base load generators at almost a dozen of its grocery stores, avoiding $40,000 in losses per day in the event of a power outage.

• The Santa Rita Jail in Dublin, California has an on-site photovoltaic system that produces 1.18 megawatts, giving $15 million in net savings over the 25–year life of the project. More...

• A natural gas distribution company serving over 240 communities in Minnesota installed a natural gas powered microturbine in a cogeneration project to power the plant's liquefaction section and supply heat in the winter and cooling in the summer. More...