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The Case for  Distributed Energy

The world’s central power plants waste over 70% of the fuel they use.

  • That is more energy than used for transportation worldwide

  • Transmission and distribution (T&D) losses alone account for 10% of all power generated.

  • T&D losses are growing because of transmission congestion.

  • The world's T&D energy waste exceeds the combined electricity consumed by Germany, the UK, Spain and France.

  • Distributed energy systems cost less than half as much to build as centralized electricity generation plants with T&D included.

  • Distributed energy plants waste less than 30% of the fuel energy used as compared with 70% for central power systems.

  • Switching to distributed energy reduced greenhouse gas emissions by more than 60%.

Central power systems are becoming less reliable.

  • Power failures due to T&D congestion are inevitable.

  • Existing T&D systems in many countries are now over loaded, but added networks are publicly opposed.

  • The central power model is vulnerable to system disruption, destruction and attack.

The central power system model is politically obsolete.

  • By definition, any public electric distribution utility is a monopoly. Without competition monopolies fail their customers.

  • Ultimately, public utility regulation systems inevitably side with the utilities they regulate.

  • They cooperate to stave off customer flight to retain the maximum rate base over which to amortize capital costs.

  • Over time, these capital investments become inflated relative to the amount of power distributed.

  • Interconnection between regulated distribution utilities lags due to lack of motivation and environmental opposition.

  • The whole system becomes moribund in bureaucracy and self-servingly opposes innovation to improve energy efficiency.

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According to the United Nations 57% of the world's population will live in urban areas by the year 2020. In 1950 only 30% were city dwellers. Only 80 of the world's cities then had populations exceeding one million. A dozen years from now there will be 410 such cities of which 53 will house more than 5 million people. Most or this urban growth will be in Asia and Latin America where the world's largest cities already exist.

In the developing world twenty years ago 29% of people were urban dwellers. Twenty years from now this figure is expected to rise to 52%. Urban settlements in developing countries are growing five times faster than their counterparts in the industrial world. China and India lead this high urban growth trend.

Only a quarter of their urban growth is caused by natural birth. Rural immigrants to the cities make up the rest. China's urban population in the next twenty years will expand by more than America's total existing population! 

As a group, developing countries will need an average of 21 million new family homes each year for the next ten years. During the following ten years the average will rise to 25 million homes per year.

There already is a desperate shortage of affordable housing in these countries which causes slums and squatter settlements to grow twice as fast as legitimate housing. To house these squatter populations properly, the annual rate of new household formations would have to increase to 35 million per year in this decade and 39 million in the next decade, respectively. That equates to a rate of over 100,000 new housing units every day!

Two thirds of these will be needed in Asia-Pacific.

According to the U.S. Department of Energy Information Administration, the use of natural gas for electricity generation will grow quickly to become the fuel of choice in the next twenty five years. On a world scale in 1995, coal was used to produce twice the amount of electricity generated by natural gas. By the year 2020 gas will be within 5 percentage points of overtaking coal as the leading fuel for power generation.

Existing central electric power systems have overall thermal efficiencies of less than 30%. This means that the power company consumes three calories for every calorie of energy delivered to the user. Given the rates of increasing demand described above and considering the growing realization of  global warming effects, the world will not tolerate reliance on systems with such low efficiencies.

CoCombined Heating & Power

By combining power and heat production into one system (CHP) produces two and a quarter useful calories for the same three calories burnt and reduces pollution by as much as 60%. Hence, it is becoming widely accepted that distributed CHP energy systems offer the best medium-term solution to conserving energy and the environment.

The economic benefit is that the cost of electricity is virtually eliminated by using the heat rejected from on-site generators for space and water heating, cooling and refrigeration, plus any other direct heating applications.

The environmental advantage is that with proper choices in power generator design, harmful emissions, including nitrous oxides can be drastically reduced and less carbon dioxide generated by virtue of better energy utilization.

Understandably, electric utilities have historically defended their rate bases by discouraging customers from generating their own power by charging high standby fees for backup power. Small commercial customers establishing their own distributed energy systems should, therefore, not depend on the utility grid for power backup.

Clearly, for distributed energy systems to take hold seriously, they need to be widely used as an alternative to centrally generated power infrastructures. Ultimately, they should provide an alternative method of electrify entire new communities without requiring expensive central power plant additions. This requires a solution that caters to the entire range of users.

In industrialized economies, industries consume about one third of the power generated. There are not very many industries and they can be easily encouraged to each use energy more efficiently and cause less pollution by co-generating power and heat on location.

Commercial businesses consume another third of the power generated, but there are 22 times more commercial customers than industrial ones, and most of them are small enterprises. They receive much less attention and don’t have many economically attractive solutions to generate heat and power on their much smaller premises.

The last third of the power generated is consumed by the remaining 87% of customers, who are residential users, each using about one tenth as much power as the commercial customers. There has been virtually no effort made to serve this market with combined heat and power (CHP) distributed energy systems.

To address the bulk of the electricity market which means the small commercial and residential users, a CHP solution has to have the abilities to:

  • use natural gas at standard distribution line pressure;

  • operate with high part-load efficiency;
  • be available in affordable clusters to ensure noninteruptible power;
  • offer the capacity to bear all heating and cooling loads with rejected heat;
  • ensure ultra-low emissions, very low noise, little or no scheduled maintenance, high reliability and long service life.

 Concept The System

CEC is responding to this breakthrough requirement with a system built around a unique turbo-generator concept. Typical CHP systems are configured around clusters of micro turbo generators to satisfy the complete energy needs of commercial businesses and of groups of residences in an efficient, economical, ultra-low pollution manner. The redundancy achieved through use of clusters of generators provides sufficient reliability to disconnect entirely from external electric sources. The exhaust heat from the generators provides all the heating and cooling required by the customer, which results in highly economical energy use, at much reduced levels of greenhouse gas emissions.

Heat from the turbo generators is directed through external heat exchangers to provide a full range of energy services including space heating, water heating, heat for cooking and other processes, plus cooling  through use of absorption chillers.

The Turbo Generator

The gas turbine generator employs a closed Brayton cycle approach to achieve a very broad, flat thermal efficiency curve capable of handling a wide range of fractional loads without loss of system efficiency.

The key attribute of the turbo-generator is its ability to be manufactured inexpensively in large quantities. The technology behind the design is well proven as are the choices of materials and manufacturing processes.

The specific design is executed with simplicity and minimal maintenance in mind. It makes extensive use of ceramics which offer low thermal coefficients of expansion in combination with high strength to weight ratios, incredible wear resistance, and very low reproduction costs in large quantities. The design avoids the use of lubricants or other features that require regular

Cool air from the utility heat exchanger enters the low pressure compressor which discharges the compressed air into an intercooler where it is cooled to near ambient temperature before being directed into the high pressure compressor which discharges the compressed air into a counter-flow recuperator where it is heated further by exhaust air from the turbo generator. Next, the high pressure air is ducted into the combustion heat exchanger to be heated by convection and then radiation to a temperature of approximately 1,800ºF before entering the high pressure turbine where it is expanded and ducted into low pressure turbine to be further expanded and ultimately used to drive the turbine of the turbo generator which discharges the air into the recuperator. Partially cooled air from the recuperator is then ducted to the utility heat exchanger where it is cooled to near ambient temperature and brought back to the low pressure compressor to repeat the cycle.

The output from the high-speed, wild frequency alternator is electronically rectified and then inverted to controlled frequency power at 50 or 60 Hertz.

The turbo generator has a nominal rating of 60 kilowatts and operates over a power range of 12 to 60 kilowatt output.

The external combustor is designed to use natural gas at a normal utility line pressure of 5 inches of water. A wide range of alternative fuels can also be accommodated.

servicing. It is constructed to run continuously without care over an extended life cycle of 30,000 hours or more.

The Importance of Peak Demand

Economics of central power stations is greatly influenced by peak system demand. Any shortfall in generating capacity below peak demand leads to service interruptions in parts of the system. In a open electricity market, the scramble for supplies to satisfy peak demand sets the spot market price for electricity. Hence, in short supply situations the opportunity to reduce peak electricity demand has a disproportionately high value.

According to its energy commission, the peak load in California is set largely by the commercial and residential sectors, each contributing 35% of the peak demand

 
Commercial and Residential Demand

Within California’s commercial sector, air conditioning and lighting, followed by ventilation, are the biggest contributors to peak demand. The state is pursuing more efficient alternatives to expensive electric air conditioners by offering price incentives to install gas-powered absorption chillers. The principal applications for CEC energy systems are in commercial establishments with intensive energy demands relative to floor space and power needs in the 50 to 180 kilowatt range. In the United States such businesses number well over one and a half million which presently have little choice but to accept high electricity rates, even if it leads to profit erosion. Alternative energy supplies for bigger enterprises is being addressed by many service providers. Few, if any are focused on the plight of smaller enterprises. CEC  is positioning itself to provide energy system solutions for this market.

 

In the residential sector, California’s peak demand is also most severely impacted by air conditioning loads, followed by refrigeration, cooking and clothes drying.

This is one of several reasons why CEC is motivated to address the energy needs of the residential market with smaller versions of its commercial energy system.

Another important reason is that family households create large and sudden swings in power demand when appliances and heaters are turned on and off. For example, the ubiquitous hair dryer draws 1.6 or more kilowatts of electricity.

American homes are being built at a rate of 1.6 million per year. There is also substantial residential need for energy conversion of existing homes, but the home improvement segment of the market is difficult and expensive to serve adequately.

In the U.S. alone, the commercial segment represents an aggregate peak demand for electricity of well over 150,000 megawatts. New residential construction adds prospective slots for 1.6 million new energy systems each year. Overall, these two market segments represent an available market for the Company's products of tens of $ billions annually.

WORLD MARKETS

While it makes sense for the Company to begin by addressing the California market because its future electric rates have been compromised and will remain high by national standards for years to come, which makes the case for commercial enterprises to migrate to distributed energy systems more compelling, by far the greatest opportunities for this technology lies in rapidly growing developing economies.

There is enormous need for electrification of homes and businesses in countries with poor electric distribution amenities, many of which have access to abundant natural gas resources.

Almost three quarters of the world's proven natural gas reserves are in Russia and the Middle East, although this picture is subject to change as more exploration occurs. The presence of abundant gas reserves around Asia speaks well for the use of gas-fired distributed energy systems in the world's region of fastest urban growth.

China and India could clearly benefit most from wide introduction of such systems in the next several decades.

 

  

China has the world’s second largest coal reserves and is both the world’s largest producer and consumer of coal. However, much of these reserves are in the interior region of the country, far away from coastal economic activity. China has promoted the building of mine-mouth power plants to avoid additional demand for rail transportation of coal to eastern regions. China’s reliance on coal for electricity generation is expected to continue at roughly three-fourths of the total even though it and the world would benefit greatly if China elected to use more natural gas rather than coal.

  

India is expected to increase its consumption of electricity at a 4.9% average annual rate from 1996 through 2020. India’s heavy reliance on coal for electricity generation is expected to lessen somewhat over the next 25 years. By 2020, coal’s share of the market is expected to decline to 62% from 79% in 1996. Natural gas will largely make up for coal’s lost share, accounting for 14% of the electricity fuels market in 2020, compared with 5% in 1996. India has set the goal in its new five year plan of providing “electricity for everyone” in its huge population. To facilitate such an expansion in energy capacity, gas pipelines from neighboring countries such as Bangladesh are being planned.

  

In general, world consumption of natural gas for the production of electricity is expected to double in the next 20 years to about 60 Quadrillion BTU’s by the year 2020 as shown in the bar graph. This fact implies a probable doubling of gas transportation infrastructure in the same period. Predictably, much of the expansion in gas pipelines will occur in Northeast Asia to serve rapidly increasing urban populations.

To access these markets the Company has begun to explore relationships for the manufacture and distribution of its energy systems in specific Asian countries. It also plans to work closely with the resource companies planning to build the pipelines and produce and market the natural gas transported by them.