The Future of Distributed Power Generation: New technologies, changing economics and the impact of fuel cells

The Future of Distributed Power Generation: New technologies, changing economics and the impact of fuel cells

Distributed power generation undergoing significant change as disparate pools of capacity give way to the establishment of integrated local generation. While distributed generation can reduce network losses and improve network stability, there are still a number of barriers including network connection costs, the operation of net metering and in some cases the application of market liberalisation. Resolution of these issues and efficiency gains in conventional, advanced fuel cell and renewable technologies will eventually lead to easier and faster integration of distributed generation and significant growth in distributed generating capacity. ‘The Future of Distributed Power Generation’ is a new report published by Business Insights that examines key environmental and legislative issues and analyses the technologies, efficiency and economics of conventional fossil fuel and advanced distributed generation. This new report analyses how demand for distributed generation capacity is likely to change as concern over energy security and network stability grows.

Table of Contents
The Future of Distributed Power Generation
Executive Summary 10
Introduction 10
Network issues 10
Conventional fossil-fuel based distributed generation 11
Advanced fossil-fuel based distributed generation 11
Renewable technologies for distributed generation 12
Environmental and legislative issues 13
The economics of distributed generation 13
The outlook for distributed generation 14
Chapter 1 Introduction 16
Introduction 16
The history of distributed generation 18
Definition of distributed generation 20
Advantages of distributed generation 22
Types of distributed generation 23
Rural power 23
The structure of the report 24
Chapter 2 Network issues 26
Introduction 26
Distribution network requirements 27
Effects of market liberalization 28
Distributed generation and the distribution network 29
DG behind the meter 30
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Active distribution systems 31
Efficiency and losses 32
Virtual power plants 33
System stability 34
The future 35
Chapter 3 Conventional fossil-fuel based
technologies for distributed
generation 37
Introduction 37
Reciprocating engines 38
Engine cycles 38
Engine types 39
Engine speeds 41
Cogeneration with reciprocating engines 42
Engine emissions 43
Engine developments 44
Engine costs 44
Gas turbines 45
Turbine types and sizes 46
Gas turbines for cogeneration 48
Advanced gas turbine cycles 49
Gas turbine emissions 49
Gas turbine costs 50
Microturbines 51
Stirling engines 53
Chapter 4 Advanced fossil fuel-based
technologies for distributed
generation: Fuel cells 56
Introduction 56
The fuel cell principle 57
Phosphoric acid fuel cell 59
Proton exchange membrane fuel cell 61
Molten carbonate fuel cell 63
Solid oxide fuel cell 65
The fuel cell market 67
v
Chapter 5 Renewable technologies for
distributed generation 71
Introduction 71
Solar power 73
Solar thermal power generation 73
Solar photovoltaic power generation 76
Wind power 79
Small hydropower 83
Small hydro technology 84
Small hydro costs 85
Marine technologies 86
Tidal energy 86
Wave energy 87
Ocean (tidal) stream generation 89
Comparison of distributed generation technologies 89
Chapter 6 Environmental and legislative
issues 92
Introduction 92
Distributed generation based on fossil fuel combustion 93
Distributed generation based on renewable technologies 97
The environmental impact of distributed generation 98
Legislative issues 99
Conflict of interest 101
Capacity planning 102
Chapter 7 The economics of distributed
power generation 104
Introduction 104
The cost of electricity 105
Distributed generation installation costs 108
Cost of electricity 111
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Chapter 8 The outlook for distributed
power generation 117
Introduction 117
The effect of market liberalization and policy initiatives 117
Policy drivers 120
Prospects 121
List of Figures
Figure 4.1: Annual fuel cell power plant sales (units sold), 1996-2007 68
Figure 5.2: Annual solar cell production and cumulative capacity (MW), 1999-2006 77
Figure 5.3: Cost comparison of solar technologies ($/kW) 79
Figure 5.4: Global wind capacity additions (MW) 80
Figure 5.5: Renewable distributed generation technology cost comparison ($/kW) 90
Figure 6.6: Efficiencies of fossil fuel generating technologies (%) 94
Figure 6.7: Nitrogen oxides emissions from fossil fuel units (g/MWh) 96
Figure 7.8: The value of electricity in the UK market (£/kWh) 106
Figure 7.9: Cost of electricity from distributed generation technologies ($/kWh) 113
Figure 8.10: Distributed generation market drivers and inhibitors 122
Figure 8.11: Forecast distributed generation capacity on the UK distribution network (MW) 124
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List of Tables
Table 1.1: Installed Distributed Generation Units in US 17
Table 1.2: Definition of Distributed Generation 20
Table 2.3: Passive and active distribution networks 31
Table 3.4: Engines types 40
Table 3.5: Gas turbine types 47
Table 3.6: Technology comparison 54
Table 4.7: Phosphoric acid fuel cell 59
Table 4.8: Proton exchange membrane fuel cell 62
Table 4.9: Molten carbonate fuel cell 64
Table 4.10: Solid oxide fuel cell 66
Table 4.11: Annual fuel cell power plant sales (units sold), 1996-2007 67
Table 4.12: Technology comparison 69
Table 5.13: Annual solar cell production and cumulative capacity (MW), 1999-2006 77
Table 5.14: Comparison of solar technologies by size (MW) and cost ($/kW) 79
Table 5.15: Global wind capacity additions (MW) 80
Table 5.16: Small hydropower categories 84
Table 5.17: Renewable distributed generation technology comparison, capacity (kW/MW) and
cost ($/kW) 89
Table 6.18: Efficiencies of fossil fuel generating technologies (%) 93
Table 6.19: Nitrogen oxides emissions from fossil fuel units (g/MWh) 95
Table 7.20: The value of electricity in the UK market (£/kWh) 106
Table 7.21: Distributed generation installation costs 110
Table 7.22: Cost of electricity from distributed generation technologies ($/kWh) 112
Table 7.23: Further costs of electricity from distributed generation technologies ($/kWh) 114
Table 8.24: Forecast distributed generation capacity on the UK distribution network (MW) 123