54 MAKALE / ARTICLE regulations and on-site staffing requirements. However, some regulatory barriers stili remain. Selling excess DG to another electricity customer is generally not allowed. The costs of electrical protection equipment can be quite substantial: about 1 0% of the total cost of the facility. TheUS DG in the US is limited by relatively low electricity prices and affected by the widely varied pace of retail electricity market liberalization in the 50 states. CHP accounts for 50.4 GW, or about 6%, of total US electrical generating capacity, nearly all of it in large industrial plants. Emergency power generators have been identified as a potential source of emergency grid capacity. A detailed survey of standby generators in California, by the California Energy Commission, found 3.2 GW of such capacity, equivalent to over 6% of peak electricity demand, in the stale. There are several challenges to DG in the US beyond the question of economic competitiveness. Permitting processes make it difficult and expensive, on a per kilowatt basis, to get siting approval. The lack of a national standard for interconnection further increases transaction costs for DG companies, although such a standard is now under development. lncomplete regulatory reform has lef! distribution utilities competing with DG. Environmental standards have been toughened in some states, with the same standard applying regardless of the size of the generator. This approach effectively rules out fossil-fired DG in these states. The Netherlands e Netherlands has an advanced liberalized market where DG is well established principally because government policies have favored CHP and renewable energy sources. However, the general policy thrust of the Dutch government is to avoid using favorable grid policies or tariffs to subsidize the development of these technologies, relying instead on other methods. The substantial Dutch experience with DG has had some important advantages. Unlike the situation in the US, interconnection rules in the Netherlands are not a problem. Market rules were adjusted soon after they were introduced, so that CHP producers could more accurately predict how much electricity they would supply to the grid. Power parks have been established where the main power producer is the only customer with a direct connection to the grid. But CHP producers have faced difficulties because of rising gas prices and falling electricity prices. To help them cope, the Dutch Government has increased direct subsidies to producers and has encouraged distribution companies to ensure that the network value of DG is appropriately reflected in tariffs. TheUK The UK, which alsa has an advanced liberalized market, has policies that favor the development of CHP and renewable sources of energy and considers the development of DG in general as an important way to increase competition among electricity producers. Nevertheless, the introduction of new electricity trading rules, known as the New Electricity Trading ENERJİ & KOJENERASYON DÜNYASI Arrangements (NETA), have nonetheless proved disadvantageous to small distributed generators because of higher transaction costs, requirements for balancing output against forecast, and, most importantly, because of the fail in power prices. As a consequence, NETA has led to greatly reduced power output to the grid by distributed generators. in anticipation of these problems, the UK Government commissioned an 'Embedded Generation Working Group' to examine the role of DG in the liberalized market. The group's report, issued in January 2001, identified a number of practical measures to ensure that DG is integrated into the power system in an economically efficient way. A 'Distributed Generation Co-ordinating Group' has been established to follow up on the Working Group's recommendations. POLICY ISSUES Market liberalization and economic efficiency Liberalization of the electricity market itself has had an impact, increasing the complexity and transaction costs for all market players but particularly affecting smaller producers. in Western Europe, electricity prices have largely fallen at the same time that natura! gas prices rose, resulting in great financial pressure on most distributed generators. in certain markets where they can avoid charges on transmission, distributed generators may have an advantage over central generation. Elsewhere, in wholesale markets that are designed with large central generation in mind, smaller distributed generators may be at a disadvantage because of the additional costs and complexities of dealing with the market. Difficulties in the NETA market in the UK and in the new Dutch market suggest that further market measures are needed to make the system fair to smaller generators. Furthermore, treatment of connection charges for DG needs to be consistent with treatment of larger generators. in fact, liberalization of the electricity market is not broad enough to take advantage of the flexibility of many types of DG. Retail pricing, by time and by location, would encourage the development of DG in locations where it can reduce network congestion and operate at times when system prices are high. Environmental protection DG embraces a wide range of technologies with a wide range of both NOx and greenhouse gas emissions. Emissions. per kWh of NOx from DG (excepting diesel generators) tend to be lower than emissions from a coal-fired power plant or a typical utility system with a large proportion of coal. At the same time, the emissions rate from existing DG (excepting fuel cells and PV) tends to be higher than the 'best available' central generation: a combined cycle gas turbine with advanced emissions control. Tins puts a serious limitation on distributed generation in areas where NOx emissions are rigorously controlled, even where DG could effect a substantial reduction in emissions compared to the generation which would be displaced. For example, new regulations coming into force in East Texas in 2005 will make it unfeasible to use fossil-fired DG, except when powered by fuel cells -see Figure 3.
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