Distributed/Onsite GenerationOptions Identification and

Consultation Services

Tom Rooney, Scott AlbertGDS Associates, Inc.

1181 Elm Street, Suite 205    Manchester, New Hampshire 03101

(603) 656-0336www.gdsassociates.com

Distributed Generation – An Overview

Distributed Generation (DG) is not a new concept but is receiving increased attention as the electric power industry begins to consider fundamental changes to its business practices to meet the new era of competition. What is now considered distributed generation has taken on many names in the past, including back-up or stand-by generation, cogeneration, combined heat and power, renewable generation, and remote power.

Distributed Generation – An Overview – cont’d

A broader definition of Distributed Generation is referred to as Distributed Energy Resources (DER) and encompasses not only generation but also tools for reducing energy usage on the customer’s side of the meter such as storage technologies, end-use technologies and Demand Side Management (DSM) concepts.

Distributed Energy Resources, unlike traditional large-scale central generation sources, are small, modular, and are typically located on-site or near large energy end users. There are a number of technologies, both renewable and fossil fueled, that make up the current, and near future, portfolio of distributed generation plants.

Distributed Generation – An Overview – cont’d

What Can GDS Associates, Inc. Do For You?

• Provide Identification and Assessment of Distributed Generation Technologies

• Characterization of Clientele's Customer Spectrum

• Spreadsheet Modeling to Visualize the Systematic Analysis of Data

• Calculation of Market Potential for Clients

Identification and Assessment

• Provide Client With Distributed Generation Possibilities to Satisfy Their Business Needs

• Researching to Establish a Comprehensive List of Potential Customers• Researching and Providing Up to Date Technological and Advancement Information for Application of DG Technology

Characterization

• Create Distributed Generation Technology Profiles for Review

• Provide Detailed Factual Information to Distinguish Customer Types• Characterization of Costs Associated With Each Customer Type

Potential Geothermal Heat Pump Installation Candidates

CustomerClass Building Type

Facility SquareFootage

Residential• Residential Home – Electric Heat• Residential Home – Gas Heat

• 2,500• 2,500

Commercial• Hotel• Fast Food (3 Meals)• Grocery

• 100,000• 1,950• 32,000

Industrial• Non – Refrigerated Warehouse• Refrigerated Warehouse

• 15,000• 25,000

Agricultural• Dairy Farm – Large (Elec DHW)• Dairy Farm – Medium (Gas DHW)

• N/A• N/A

This table identifies the customer categories and building types that were considered for potential geothermal heat pump installation candidates. For modeling purposes, each building type was broken into sub-groups and facility square footages were identified.

Mock Technology Availability and Target Customer Sectors Chart

Technology Commercially

Available* Target Customer Sectors

(for mature technologies)

Reciprocating Engines Yes Small and Large Commercial, Industrial, Agricultural

Microturbines Yes Small and Large Commercial, Agricultural

Fuel Cells Yes Small and Large Commercial, Industrial

Wind Turbines Yes Residential, Small and Large Commercial, Industrial, Agricultural

Photovoltaic Modules Yes Residential, Small and Large Commercial, Agricultural This table identifies the different technologies available and matches

them to their targeted customer sectors.

Modeling

• Evaluate Each Possibility Through Feasibility, Cost Comparisons, Reliability, and Efficiency Studies

• Prioritized Ranking of Separate Scenarios to Assess All Unique Combinations of Customer/Technology Type Applications• Generate Customer/Technology-Specific Simple Payback Charts

Mock Simple-Payback Chart

Customer Type/Sub-Group Technology

SimplePaybac

k(yrs)

C/I Wholesale Trade – Medium

Recip/D – 68 kw, 90%CF/50%WH 3

C/I Wholesale Trade – Medium

Recip/D – 11 kw, 90%CF/50%WH 5

C/I Warehouse – Large

Wind Turbines – 660 kw, 20% CF 14

Restaurant (1 Meal) *Ground Source – Horizontal Closed Loop 4

*Using Geothermal Heat Pump Technology

Calculation of Market Potential

• Market Potential Derived From Calculated Payback Period and Estimated Market Participation Rates

• Financial Analysis, Forecasting, and Marketing Costs Calculations

Mock Geothermal Heat Pump Technology Market Potential

Chart

Company X Service Territory

Estimated Market Potential @ 10%

Participation

Territory 1• Commercial/Agricultural• Residential

200 GHP Systems42,500 GHP Systems

Territory 2• Commercial/Agricultural• Residential

20 GHP Systems

4,000 GHP Systems

Outstanding DG-Related Issues for Utilities

• Design of Innovative Electric Utility Pricing and Rate Structures

• Interconnection Regulations, Including a Full Assessment of Associated Costs and Risks

• Opportunities for Utilities as DG Owners/Operators

• Rate Base Erosion Impacts and Compensation for Stranded Costs Associated with DG Installation

Outstanding DG-Related Issues for Customers

• Accurate/Unbiased Equipment Selection and Determination of the Economic Viability of the DG Investment

• Is the Technology Capable of Providing the Required Service?

• Risk Associated With Substantial Initial Investment• Lack of Standardized Interconnection

Requirements• Equipment Certification Requirements• Status of Net Metering – Not Necessarily Paying

Market Price• Siting and Permitting of Equipment• Who Should Own and Operate the DG Plant (Not

Part of Customer’s Core Business)?

Methodology of Recent Geothermal Heat Pump Project

1. Secondary Research

2. Customer Group and Technology Screening/Prioritization

3. Market Potential Assessment

Secondary Research

• Research Was Done to Identify Various Applicable Geothermal Heat Pump (GHP) Technologies and Key Performance/Cost Input Information for Use in the Screening/Prioritization Task.

Customer Group and Technology

Screening/Prioritization• Determining Which Geothermal Heat Pump

Technologies Had Potential for Application Within Various Customer Groups.

• Using Spreadsheet Models to Calculate a Simple Payback for Each Technology Selected for Installation at Specific Customer Type Locations.

• Ranking, Prioritizing, and Summarizing Each Technology Modeled to Show Those Most Likely to be Viable Within Specific Customer Categories.

Market Potential Assessment

• The Estimation of Market Potential for Geothermal Heat Pumps Individually Within Each Service Territory

Who are We?

“GDS Associates, Inc. is dedicated to providing comprehensive, expert utility services, enhanced by state-of-the-art resources. In the evolving utility industry, GDS provides a solid foundation in its commitment to clients and employees, its dedication to value, and its professional approach.”

GDS’s Engineers, Statisticians, Analysts, and Management are Fully Capable of Matching the Right Distributed Generation Technology With Your Business Needs.

For More Information:

• Visit http://www.gdsassociates.comOR

• Contact us at:

1850 Parkway Place, Suite 800 15 Constitution Drive Marietta, Georgia 30067 Bedford, NH 03110Voice 770-425-8100 Voice 603-471-0336Fax 770-426-0303 Fax 603-471-0376