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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 Reductions in electric bills (RedElecBillsi) are the sum of reductions in energy charges (RedEnChgi) and reductions in demand charges (RedDemChgi). Note that these reductions are net of any charges associated with the use of DG, like standby charges and departing load charges, if any. RedElecBillsi = RedEnChgi+RedDemChgi Each of these elements of bill impacts is computed as a present value of the associated streams of bill effects: T Re dEnChgit RedEnChgi =t∑=1 (1+d)t−1 T Re dDemChgit RedDemChgi=t∑=1 (1+d)t−1 Annual reductions in energy and demand charges are computed as: P 8760 RedEnChgit = p∑=1h∑=1∆kWhOnSiteiphtEnergyRatepht and P RedDemChgit = p∑=1∆kWOnSiteiptDemChgpt where ∆kWhOnSiteipht and ∆kWOnSiteipt indicate reductions in on-site energy use and billing demand, respectively, and EnergyRatepht and DemChgpt reflect the prevailing energy and demand charges for customers on rate p. The value of displaced fuels for CHP applications is the present value of the stream of future cash flows: ValDispFuelsi =t∑=1 V alDispFuelsit (1+d)t−1 T Itron, Inc. 3-27 Critical Inputs and Assumptions

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