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Cost-Effectiveness of Distributed Generation Technologies

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Cost-Effectiveness of Distributed Generation Technologies ( cost-effectiveness-distributed-generation-technologies )

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Cost-Effectiveness of Distributed Generation Technologies The avoided purchase of energy commodities and resource adequacy costs are comprised of an 8,760 hours per year stream of avoided electricity purchases and monthly values for the avoided gas purchases. The avoided electricity and gas costs were obtained from the E3 electric and gas avoided cost model. Finally, avoided transmission and distribution (T&D) costs are the T&D costs that were avoided due to having local generation. These were also obtained from the E3 electric and gas avoided cost model. CHP Plant-Specific Benefits and CHP Gas and Electric Bill Savings These benefits are a result of waste heat captured from the DG electricity generation system which is then used on-site. While the heat may be used to replace electricity or natural gas consumption, the model and the inputs used in the evaluation assumed that the heat is used as a replacement for gas that would have been used for heating water for a boiler. The efficiency of the boiler for this calculation was assumed to be 80%. Table 3-2 is a listing of the different electrical efficiencies, waste heat utilization, and capacity factors used in the SGIPce model for the different DG technologies. These data were derived from metered SGIP facility data, the SGIP Impact Evaluation reports, equipment fact sheets, and other sources. The technology-specific capacity factors used in the Base Scenario are a combination of 8,760 hours per year load profiles from actual metered SGIP sites. The observed load profiles were then mathematically adjusted such that all technologies have an average annual capacity factor of approximately 80% but have a load shape that is representative of the DG technology. The 80% annual capacity factor was requested by the CPUC as being a minimum requirement for future DG technologies under the SGIP. It is important to note that the CPUC cost-effectiveness financial and greenhouse gas (GHG) models are based on a prescribed 80% capacity factor versus an observed capacity factor. Observed annual capacity factors for different DG technologies were often significantly lower than 80%. However, industry comments indicated that DG technologies should be operating at 80% or higher annual capacity factors. In addition, use of the lower observed capacity factors would lead to lower performance and commensurately lower cost-effectiveness of DG technologies. If required, the SGIPce model allows the user to chose to use the actual load profiles and capacity factors which vary from approximately 30% to 90% or to adjust the capacity factor while maintaining a given load profile shape. This functionality enables the CPUC or other interested parties to examine the sensitivity of the cost-effectiveness results to alternative assumptions concerning the DG technology capacity factors.2 2 model. Section 9 of Appendix B describes how to adjust input values, including the capacity factor, within the SGIPce Itron, Inc. 3-3 Critical Inputs and Assumptions

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