APEC Workshop on Distributed Generation, Distribution, and Efficiency

1. APEC Workshop on Distributed Generation, Distribution, and Efficiency Mexico City, Mexico8-10 April 2002 Cary Bloyd Review for Expert Group on New and Renewable Energy Technologies Seoul, Korea November 4-6, 2002 Expert Group on New and Renewable Energy Technologies (EGNRET)

2. The workshop drew from experts across the APEC region • There were 10 speakers from 5 APEC economies • There were 60 participants from 8 APEC economies Expert Group on New and Renewable Energy Technologies (EGNRET)

3. Opening Comments Welcome and Introductions by Mexican Hosts Odón de Buen Rodríguez, Director General, CONAE, Mexico City, Mexico Background and Objectives of the Workshop Larry Hill, Oak Ridge National Laboratory, Oak Ridge, Tennessee, USA Expert Group on New and Renewable Energy Technologies (EGNRET)

4. Introduction Issues in the Deployment of Distributed Energy Resources Larry Hill, Oak Ridge National Laboratory, Oak Ridge, Tennessee, USA Expert Group on New and Renewable Energy Technologies (EGNRET)

5. Distributed Generation Technologies Technology Status and Market Readiness of Hydrogen Fuel Cells Jonathan Hurwitch, Sentech, Inc., Bethesda, Maryland, USA Solar PV and Wind Technologies for Rural Distributed Generation: Applications and Cost-effectiveness Luis Vega, Pacific International Center for High Technology Research, Honolulu, Hawaii, USA Supplementing Renewable DG with Energy Storage, Demand-Management, Grid-Interconnection, and DG Hybrid Integration Strategies: A Risk Assessment Iain Sanders, Industrial Research, Ltd., Christchurch, New Zealand Expert Group on New and Renewable Energy Technologies (EGNRET)

6. Barriers to Deployment of Distributed Technologies New Energy Technologies: Market Opportunities vs. Institutional Barriers Brent Alderfer, Community Energy, Inc., Wayne, Pennsylvania Development of DG in Texas: The Regulatory Perspective Terri Eaton, Public Utility Commission of Texas, Austin, Texas Barriers for Renewable Energy Projects in Distributed Generation Francisco Marquez Mendoza, CONAE, Mexico City, Mexico Expert Group on New and Renewable Energy Technologies (EGNRET)

7. Applications of Distributed Technologies in APEC Economies Adopting DG: The Case for New Zealand Ian Bywater, Centre for Advanced Engineering, Christchurch, New Zealand The Canadian Experience with Distributed Generation Bryan Halliday, CANMET Energy Technology Centre, Ottawa, Canada Distributed Generation Technologies for Energizing Rural Areas of Peru Alfredo Alcides Oliveros Donohue, EDEVI, Lima, Peru Expert Group on New and Renewable Energy Technologies (EGNRET)

8. Conclusion Synthesis of the Workshop Larry Hill, Oak Ridge National Laboratory, Oak Ridge, Tennessee, USA Next Steps: A Proposed DG Collaborative Larry Hill, Oak Ridge National Laboratory, Oak Ridge, Tennessee, USA Iain Sanders, Industrial Research, Ltd., Christchurch, New Zealand Expert Group on New and Renewable Energy Technologies (EGNRET)

9. DER technologies share common characteristics • They are located at or close to the load • They are small (1 kw-50 mw) • They have short installation times Expert Group on New and Renewable Energy Technologies (EGNRET)

10. DER technologies are also diverse • Renewable and fossil fuels • Commercial and experimental • Utility and private ownership • On-grid and off-grid Expert Group on New and Renewable Energy Technologies (EGNRET)

11. DER Activities 1.Research and Development 2. DER Technologies 3. DER Applications 4. Evaluation Tools 5. Project Development 6. Financing DER Projects 7. Potential Barriers to Deployment Expert Group on New and Renewable Energy Technologies (EGNRET)

12. Research and Development Develop a catalog of R&D programs that represents: • government facilities • private/corporate programs • private inventors Expert Group on New and Renewable Energy Technologies (EGNRET)

13. DER Supply Technologies • Fuel cells • Internal combustion engines • Small combustion turbines (1-50 mw) • Microturbines (~30 kw) • Wind turbines • Photovoltaics • Solar thermal • Geothermal heat pumps • Mini (100 kw- 30 mw /micro (<100 kw) hydro • Hybrid systems Expert Group on New and Renewable Energy Technologies (EGNRET)

14. DER Storage Technologies • Batteries • Capacitors • Flywheels • Superconducting Magnetic Energy Storage • Compressed air energy storage Expert Group on New and Renewable Energy Technologies (EGNRET)

15. DER Applications Customer Applications • Emergency power • Continuous base-load operations • Peak shaving • Green power • Critical process power Expert Group on New and Renewable Energy Technologies (EGNRET)

16. DER Applications Utility Applications • Ancillary services (e.g., reactive supply) • Transmission and distribution “investment” • Peak Demand Off-grid application • Lessons from Fiji, Kahua Ranch Expert Group on New and Renewable Energy Technologies (EGNRET)

17. Evaluation Tools • RETScreen International (Canada) • VIPOR • HOMER • Hybrid2 • D-Gen Pro • Industrial Research Limited DG Models (New Zealand) Expert Group on New and Renewable Energy Technologies (EGNRET)

18. Project Development • Project evaluation, feasibility, and profitability • Project management and budgeting; • Equipment purchases, delivery and installation • Systems design, assembly, integration and manufacturing • Systems operation and maintenance • Backup specialist technical and commercial support services Expert Group on New and Renewable Energy Technologies (EGNRET)

19. Financing DER Projects This activity represents private investment institutions, venture capitalists, and government funding sources. Services provided, include: (a) investor-linked project finance; (b) project tenders-linked finance; (c) project procurement-linked finance; and (d) project finance services Expert Group on New and Renewable Energy Technologies (EGNRET)

20. Project Barriers to Deployment Technical barriers • Interconnection standards (necessary if >300 kw) Technical standards can help • Texas pre-certifies DG technologies Regulatory Barriers Standby charges Exit fees Net metering Uplift charges Environmental regulations Information Expert Group on New and Renewable Energy Technologies (EGNRET)

21. Recommendations • Develop the business case for DER • Demonstrate DER technologies • Exchange information supporting DER • Study DER standards • Explore innovative financing mechanisms for DER Expert Group on New and Renewable Energy Technologies (EGNRET)

22. Develop the business case for DER Include all factors in defining “cost effectiveness” · Potential applications for DER · Appropriate technologies. · Financing opportunities. · Overcoming barriers. Expert Group on New and Renewable Energy Technologies (EGNRET)

23. Demonstrate DER technologies Some Not all DER technologies are commercially mature, others need demonstration • Example: A partnership between the State of Hawaii, U.S. Department of Energy, and the private sector will demonstrate the feasibility of manufacturing hydrogen using renewable electric sources Expert Group on New and Renewable Energy Technologies (EGNRET)

24. Exchange information supporting DER • Other suggested 2-3 day workshops on more focused topics related to DER such as: • Specific distributed generation technologies such as the fuel cell; • Electricity storage technologies; and • Regulations for interconnection of DER on existing electric grids • Examine virtual conferencing • Include DER information on APEC website Expert Group on New and Renewable Energy Technologies (EGNRET)

25. Study DER standards Technology and interconnection standards would alleviate grid connection barriers • Reliability; • Power quality; • Voltage regulation; • Safety; and • System efficiency Expert Group on New and Renewable Energy Technologies (EGNRET)

26. Explore innovative financing mechanisms Applications of DER by electric utilities are typically financed by ratepayers of the utilities. Financing for customer and off-grid applications can be obtained from one or more sources: • · Governments from tax revenues; • · Private firms; • · Commercial banks; • · Bilateral aid institutions; • · Multilateral aid institutions; and • · Private foundations. Expert Group on New and Renewable Energy Technologies (EGNRET)

27. Postscript: Why DER • There has been a fundamental change in the relationship between electrical generation plant size and plant efficiency. One on longer has to build large facilities to obtain high generation efficiencies. Expert Group on New and Renewable Energy Technologies (EGNRET)

28. Postscript: Why DG • When linked with combined heat and power (CHP), distributed generation can cost effectively reduce GHG emissions 50% or more on an application basis. Expert Group on New and Renewable Energy Technologies (EGNRET)

29. Linked DG/CHP cost effectively reduces GHG emissions • Conventional: • Electric power: 60% loss at point of electric power generation, 10% transmission lost • Thermal: 20% loss at production stage • DG/CHP • Thermal load is provided by electric generation waste heat, eliminating thermal circuit Expert Group on New and Renewable Energy Technologies (EGNRET)