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United States

A look at the competition

The American utility industry is gradually moving away from large central station plants in favour of smaller plants. This comes partly from restructuring and the risk of making large investments when the future structure of the industry is up in the air. But it also comes from a perception that the advances in economy of scale for increasingly large thermal power plants have ended, and been supplanted by highly efficient, modular gas turbines. Smarter computer aided dispatch control centres have made it possible to include more and smaller units in a grid. The low cost of natural gas makes it all possible.

A utility moving towards smaller units, however, is not necessarily moving toward renewables. There are many competitors on the distributed generation market and it is possible that renewable systems will play only a supporting role. As small scale, modular units the new renewables lend themselves to being scattered about on and in buildings, in the countryside and in factories. But two key technologies promise more value for the distributed utility concept: fuel cells and micro turbines. Both would run on natural gas, and both would cogenerate heat and electricity. Small to medium sized gas turbines are already a popular choice, but must compete with a still sprightly king coal.

Fuel cells are currently expensive, though costs are declining. The cheapest is $3000/ kW for a 200 kW phosphoric acid system, though a $1000/kW rebate is available from the US federal government. All major automobile manufacturers have plans to introduce fuel cell powered vehicles within ten years. This enormous market -- millions of cars, trucks and buses -- can offer the manufacturing economies of scale that could bring prices down quickly.

Although fuel cells can range up to 2-3 MW, some fuel cell makers in the US are developing small 3 kW solid oxide units that would be fed by existing natural gas lines into homes and would supply space heating, water heating and electricity for the home. Such a unit could be dispatchable according to needs of the local grid, when it had excess power available.

Micro turbines are expected to hit the market this year, with models in the 20-60 kW range selling for under $1000/kW. About the size of a refrigerator, they will run in businesses and factories, also supplying heat or hot water. It remains to be seen if they can be quiet enough to be put into buildings and whether their maintenance needs will be low enough to justify installing thousands around a utility service territory. Manufacturers point to the fact that they have but one moving part, the turbine, floating on an air bearing.

Triple cycle gas

The major movement among American power companies now is toward gas turbines that are a bit more than micro, in the 150-400 MW range. The natural gas turbine can be either single cycle or combined cycle, and can also be used for cogeneration. In a "triple cycle" the combustion gas first drives a combustion turbine, then waste heat is used to boil water for a steam turbine, and leftover heat is used provide steam or hot water for an industrial process or district heating.

The main competition for the future of the distributed generation market is between coal thermal plants and smaller gas turbine plants. Gas turbines are cheap to install, but will depend on continuing low natural gas costs to maintain their cost advantage. With a "rush to gas" in the electric industry competing with home heating, industrial fuel use and potentially natural gas vehicles, supplies could get tight, driving up costs.

Coal supplies are plentiful and cheap in the US, and the sulphur dioxide emission problem is looking increasingly solvable. On the other hand, new ozone and particulate regulations proposed by the Environmental Protection Agency, increasing interest in toxic emissions such as mercury, and potential action on climate change within the year all hinder coal development. Also, coal gasification does not seem to be progressing as quickly as some thought, making large coal boilers the conversion technology of choice for coal.

A mark in favour of the distributed generation concept is reliability. Given the large number of power outages in North America in the past year, California last summer, and in Ontario during the winter, a system with plenty of distributed generation sited between the consumer and high voltage lines may be more robust and reliable than one that relies on enormous and overtaxed transmission lines. The cost of outages has been tremendous.

The vulnerability of transmission lines to trees (California) and ice (Ontario) is evidence, too, that a system of pipelines feeding a future hydrogen energy system may be more secure. Natural gas pipelines are not fail-safe, but they are more reliable than hot, sagging copper wires on poles.

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