Distributed Generation Workgroup

Status Report

June 30, 1998 - Sioux Falls, South Dakota

Overall Project Objectives

Primary

• Develop information that serves as a common foundation of knowledge for the NWCC and others to understand and discuss issues associated with furthering the adoption of distributed wind power;

• Develop a description of the benefits, costs, and technical requirements associated with developing wind projects in a distributed model;

• Describe past and current European utility and government policy drivers, and market, industrial, and social characteristics that encouraged and are encouraging European distributed wind models and contrast these to the current U.S. market and policy climate;

• Describe where distributed wind is constrained or encouraged by market, institutional, or regulatory factors;

Overall Project Objectives

 Secondary

• Identify attractive generic combinations of economic, technical, and social characteristics for distributed wind applications in the U.S.;

• Develop information required to identify specific opportunities for distributed wind systems on a preliminary feasibility level; and

• Identify technical options that can enhance distributed value of wind projects.

Broad Themes and Approaches To Keep In Mind

• Consider benefits under new utility structures

• New market paradigm implies new opportunities -- hard to predict

• Point to other current work (e.g., transmission, green power)

• Interpret lessons from Europe for potential opportunities in U.S.

• Identify best practices for establishing distributed projects

Draft Report Outline

• Executive Summary

• Introduction

• Chapter 1. Interconnection and Power Quality Requirements (Wind)

• Chapter 2. Distributed Benefits (PTI, Wind)

• Chapter 3. Cost Data and Analysis (PERI, Wind)

• Chapter 4. Economic & Market Infrastructure and Policy Drivers (PERI)

• Chapter 5. Economic and Social Impacts (PERI)

Status of Effort

• U.S and European literature review - 98% completed

• U.S. interviews and project data collection - underway (50%)

• European interviews and data collection - 95% completed

• Case study of the integration potential for a specific mid-west region underway (Chapter 1)

• Drafts of Chapters 2, 3, and 4 underway.

• First internal draft of local economic benefits completed
  (Chapter 5)

Chapter 1. Interconnection and Power Quality Requirements

• Characterization of interconnection requirements and limitations

  • Lessons learned from Europe

  • Conditions unique to the U.S.

  • Standards

• Relating interconnection requirements to power quality requirements

• Power quality impacts on system from wind

• Affect of power quality on amount of wind potential

• Assessment of wind penetration on distribution system

• Assessment of wind's ability to meet requirements

• Case Study: Integration limits in a real Mid-West region

Chapter 2. Distributed Benefits

• Overall points:

  • Europeans have not needed to quantify benefits

  • Proper selection of potential benefits to evaluate is key in U.S.

• List of potential distributed benefits

• Technical/resource characteristics needed for benefits to occur

• Limitations and challenges, potential size range and recipient of benefits

• Impacts on system operating parameters

• Utility quantification of benefits: capacity value and other issues

• Checklist for identifying/screening potential benefits

• Wind technology opportunities for enhancing value

Chapter 3. Cost Data and Analysis

• Cost Data

  • Interpretation of European data

    • Capital, project cost breakdowns, O&M

  • Combining European and U.S. data

    • Sensitivities - understanding key drivers

    • Best practices for distributed projects

• Impact of project characteristics on project valuation

  • key drivers and best practices relative to project valuation

• Implications for policy needs - range of economic thresholds

  • Payback vs. wind speed, or other approach

Chapter 4. Economic and Market Infrastructure and Policy Drivers

• Review of European experience and current conditions

  • Industry infrastructure and market characteristics

  • Financial characteristics and conditions

  • Utility and government policy drivers

  • Institutional framework & context for resolving issues and forming policy

    • "Its wasn't just one thing"

• Review and analysis of U.S. market

  • Essential factors or precursors for distributed projects in U.S.

  • Required roles of U.S. market participants

  • Policy options to encourage the distributed model

    • Ways to build on "good things" that are happening

    • Examine European experiences for insights

    • Policy relative to potential future changes

Chapter 5. Economic Impacts and Social Implications

• Local Economic Benefits

  • Current literature

  • Overview of methodologies

    • Surveys

    • Modeling

  • Key issues associated with current estimates

  • Role of Wind Energy Development in Local Economies

• Social Implications

  • Local identity, perceptions, concerns, solutions

  • Relationship to infrastructure and policy

  • Public acceptance: relating European lessons to opportunities in the U.S.

  • Institutional context for development of markets