The energy landscape is changing. Coal generation is decreasing and natural gas generation increasing. The US is now the world’s leading supplier of liquified natural gas and across the country, energy demand is higher than ever. Meanwhile, transmission infrastructure is in need of costly updates. Increasing costs are changing the energy landscape, and RECs are seeking new solutions. From our point of view, distributed generation is the missing piece for many of America’s rural cooperatives and industries.
It often happens that when distributed generation is mentioned, the first thing that comes to many minds is solar. Solar is indeed an important distributed energy resource (DER), but it’s certainly not the only one. As America’s rural electric cooperatives (RECs) look toward new solutions to adapt to the changing energy landscape, we at Perceptive Power Infrastructure see a combination of distributed generation energy solutions available to increase relability and resiliency.
What is distributed generation?
The process of producing electricity from a variety of energy resources located close to the point of consumption is known as distributed generation. This is typically done to complement energy produced and supplied from the grid. While DERs can include renewable technologies like photovoltaic (PV) solar, battery storage, and wind turbines, fossil-fueled sources like natural gas-powered reciprocating engines can also be used to optimize value for the REC or industrial client.
From the perspective of rural electric cooperatives, distributed generation offers the following benefits:
- Cost savings: DERs can help reduce the
costs associated with transmission and distribution. Depending on the
technology, it can also create huge savings in other areas, like demand management,
market pricing and coincidental peak (CP)-related costs.
- Reliability: The quick start
capabilities of certain distributed generation solutions translate to improved
reliability during peak demand events or when backup power is needed.
- Environmental benefits: DERs that use renewable energy sources such as PV solar can help reduce greenhouse gas emissions and other environmental impacts associated with traditional power generation. Funding available through the Inflation Reduction Act makes implementing these renewable sources even more attainable.
Connecting the dots of generation
Depending on the grid and the solutions needed, distributed generation and centralized generation systems can be connected in a few different ways.
Behind the meter
Distributed generation systems which are installed at the customer’s location are known as behind the meter (BTM) systems. One way of connecting BTM systems to the centralized grid is through a process called net metering. Net metering allows customers with BTM systems, such as rooftop solar panels, to generate electricity and feed it back into the grid. The excess electricity generated by the distributed generation system can be credited to the customer’s account, reducing their monthly bills.
For commercial and industrial (C&I) entities, BTM solutions are logical and very beneficial. On the other hand, BTM solutions are a bit trickier at the REC level. A growing number of REC members are requesting lower costs and renewable technologies, which is driving them to install BTM solutions. This in turn is creating a variety of new financial, legal and logistical challenges for RECs. For that reason and more, the solutions that we provide to RECs are installed in front of the meter (FTM).
In front of the meter - microgrids and hybrid systems
FTM solutions can be implemented in a couple of different ways. In one, microgrids can be created using distributed energy resources. These small-scale, localized grids can be connected to the central grid, but they can also operate independently of it when necessary. The microgrid can provide power to local customers, especially during peak load events and times when the central grid is challenged.
Some RECs own and maintain their own microgrids, while others make use of third-party microgrids and DERs through power purchase agreements (PPAs).
In some cases, centralized power plants may also be integrated with DERs to create a hybrid power system. For example, a large wind farm or solar farm can be interconnected to the centralized grid, while also incorporating small-scale, distributed generation systems such as rooftop solar panels. The combination of centralized and distributed generation systems can help to balance the variability of renewable energy sources, and provide a more reliable and cost-effective energy supply.
Solutions with infinite options
The resources that we work with most are PV solar, battery storage and thermal in the form of natural gas-powered reciprocating internal combustion engine (RICE) units. We can’t say now what combination of technologies works best because that’s a highly subjective answer. While all RECs and C&Is have certain basic factors in common, they’re all different enough that there is no such thing as a one-size-fits-all distributed solution.
A lot has to be considered when deciding how to implement distributed generation into a power supply portfolio. These factors include overnight costs, O&M costs, current peak loads, available resources and current agreements with power supply partners and grid operators. RECs also have their communities and members to consider.
The way Perceptive Power Infrastructure creates solutions is simple. Once we take a look at a partner’s energy bill and available assets and learn about what their organization and community needs, we set to work. Using our highly specific financial model, we create a proposal with the core goal of eliminating high costs that don’t equate to high value. With all of this in mind, we create tailored distributed generation energy solutions based on various combinations of distributed energy resources.
As a proven developer of distributed generation assets, our team has seen what works and what doesn’t within the energy sector. For that reason and many others, we listen first and make suggestions later. In fact, we follow a special process which we call The Perceptive Way. Our goal is to build a long-term working relationship which has trust at its foundation.
Which distributed generation energy solution is right for you?
Costs associated with generating, transmitting and distributing electricity are on the rise. As energy bills continue to climb and as new technologies emerge, it’s only logical that energy retailers are turning their attention toward distributed generation.
The exact combination of DERs will depend on each co-op’s specific needs. As experienced professionals from across the energy industry, we want to see RECs succeed. If you’re looking for a distributed generation solution, we want to hear from you. Let’s sit down, get to know each other and find out if Perceptive Power Infrastructure has the right technology for your community.