distributed generation feasibility
DESCRIPTION
Presenter: Jon Fortune, CCSETRANSCRIPT
CCSE Solar Conference:
Distributed Generation Feasibility
September 29th, 2009
Presented by Jon Fortune, P.E.
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Overview• Introduction
• Terms
• Feasibility Studies
• Example: Photovoltaics
• Site Specifics
• Utility Tariffs
• Critical Economic Components
• Results
• Fundamental Questions
862 kW Solar - Santee Lakes Covered RV Storage
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California Center for Sustainable EnergyGreening Your World!
• An independent voice on energy issues and a trusted, unbiased resource for businesses, consumers, public agencies and local governments offering balanced, objective information throughout the San Diego community and California
• The California Center for Sustainable Energy is a nonprofit corporation that helps San Diegans and others adopt greener practices and save energy and money through rebates, technical assistance and education.
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CCSE’s Energy Advisory ServiceEmpowering clients with objective information and sound
analysis to green your bottom line
Service Offerings• IDENTIFYING ENERGY EFFICIENCY OPPORTUNITIES
• Determining how much energy you are consuming and evaluating what measures will save you money
• DEVELOPING RENEWABLE ENERGY SOLUTIONS• Evaluating and designing integrated, practical alternative energy systems for maximum efficiency and minimum
costs
• QUANTIFYING YOUR CARBON FOOTPRINT• Developing carbon reduction strategies and greenhouse gas accounting that meet regulatory requirements
• CREATING INCENTIVE AND OUTREACH PROGRAMS• Identifying potential financial assistance through incentives and rebates and developing training, outreach and
partnerships
• ESTABLISHING MANAGEMENT AND GREEN BUILDING SOLUTIONS• Applying systematic principles and approaches to energy efficiency and environmental considerations in all phases
of building development
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Terms• kW: kilowatt = Unit of instantaneous power. (speedometer)
• kWh: kilowatt-hour = Unit of energy used over time. (odometer)
• Tariff: utility rate schedule.
• DG: Distributed Generation. Name for on-site power usually less than 20 MW.
• PV: Photovoltaics. Technological term for direct solar electricity. Different than electricity generation from thermal generation (aka solar thermal trough, dish, or power tower)
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Why Feasibility Assessments?• Most organizations have their core competencies and do not
have time to become experts• Energy costs are just one component of providing the main services your
organization delivers. New technologies and policy changes can quickly and dramatically change the cost-benefit analysis.
• Value of systems is unique per application• No “one size fits all” answers
• Value differs by site, load, tariff, utility provider, etc.
• Same terminology does not mean the same performance/value• 100 kW of Wind ≠ 100 kW of PV ≠ 100 kW Fuel Cell
• kW may be Alternating Current (AC) or Direct Current (DC)
• Feasibility reports direct action by defining constraints and objectives
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Is it worth the added cost?• Client X desired additional solar power to reduce utility costs and
prepare for future expansion of water treatment
• Already had solar installed onsite with positive outcome
• Prepared an RFP and received bids from reputable developers for desired installation of 500-1500kW of new solar
• CCSE was hired during the RFP process, conducted a thorough analysis of proposed meters and system sizes
• Results:• Determined that switching to a new tariff for one meter would yield ~$16k
in savings without solar
• Only 140kW of solar on second meter (with a change in tariff) would yield maximum savings
• Identified true cost of proposed system sizes, maximizing avoided cost and minimizing operational cost
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Example: PV
• When some materials are exposed to sunlight, they release small amounts of electricity giving off what is known as the "photovoltaic effect.“
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Is PV a good fit?• Advantages
• Easily deployable and scalable
• More predictable than wind
• Produces energy during Peak times (most expensive/most valuable times)
• Minimal required maintenance (cleaning) produces excellent returns
• Disadvantages• May not cover peak times completely
• Will not reduce site demand translating into no demand cost savings
• Cost per kWh can appear higher than other technologies such as wind and IC engines
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Collect Data to Identify Constraints• How does your site use energy per
day/month/year?• Collect at least 12 months of discrete load data from utility for kW
and kWh during On, Semi, and Off-Peak periods of each month
• Net-metering savings work when your load can be met by a PV system 1MW or smaller
• How will your site use energy in the future?• Identify future energy plans, potential for shutdowns, expansion of
loads
• How much square footage is available for PV?• Are there dual benefit opportunities such as covered parking or LEED
certifications?
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Consumption/Production Profile
0
50
100
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200
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Kilo
wat
ts
Hours
kWh Used/Produced per Hour
Site Load PV Production
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Net Consumption
-100
-50
0
50
100
150
200
250
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Kilo
wat
ts
Hours
Net kWh Used per Hour
Site Load PV Production Net Consumption
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Tariffs, Tariffs, Tariffs
• Unique opportunities for Water Agencies
• Some new – Critical Peak Pricing, limited size feed-in tariff
• Some closed – Non-time of use
• Most common – Large Commercial, Agricultural
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Tariff Lowdown• All tariffs are NOT created equal
• One tariff does NOT fit all customers
• Consumption and production during time-of-use are key to savings
• Net-metering works because you charge the utility at practically the same rate they charge you at the time you produce it:
(Utility energy rate)*(kWh Meter Load) = Utility Bill
(Utility energy rate)*(DG kWh Production) = Utility Bill Offset
• In general, net-metering is economically better than full sale of generation through the currently available feed-in tariffs
• Offset your bill costs, not your energy use
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Available Incentives• Federal Tax Credits
• 30% first year with MACRS depreciation
• ~45% of project costs during first year
• Creates value for power purchase agreements
• California Solar Initiative• http://www.gosolarcalifornia.org
• Performance based incentives over 5 years
• ~20% of project costs
• Renewable Energy Credits• Earned by any system owner who does not
directly sell their renewable energy to the utility.
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Critical Economic Components• Self-Ownership
• Up-front financing required
• Knowledge of tax-credits (commercial only)
• Specialized management on-staff
• Power Purchase Agreements• No up-front capital costs
• Ideal for tax-exempt customers who have no tax appetite
• Customer value based on immediate potential for savings
• $/kWh is the magic number
• Long term risk due to long term contract
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The Feasibility Assessment
Energy Produced
• Quantity
• Time of delivery
Consumption
• Quantity
• Time of Consumption
Utility Rates
• Demand Charges (kW)
• Energy charges (kWh)
The Report
• Utility savings
• System sizing
• Payback
Ownership Model
• System management
• Project Economics
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Fundamental Questions• What technology will work best for me?
• Are there energy efficiency measures I should explore before examining distributed generation?
• What tariff am I on now?
• What tariff will provide me with the most savings when the project is complete?
• Where will the equipment be installed?
• How will that impact future facility maintenance?
• How much energy in kWh do I use?
• Do I expect to use more/less in the future?
• What is my peak kW demand?
• Do I expect to use more in the future?
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Fundamental Questions• How will I finance this project?
• What incentives are available and for how long?
• Can I lease to own?
• What are the maintenance requirements of this equipment?
• What is the life-cycle of this equipment?
• Will the performance degrade and by how much?
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Bottom Line
• A independently validated feasibility assessment answers the fundamental business question about the dollar value of energy generated from solar.
