and human waste will also be government-imposed waste disposal tariffs or fees and limitations on landfill space. Major signposts for advanced biomass will be demonstrated capital cost reductions and efficiency gains. $ 1500/kw capital cost and 35% efficiency might be reasonable benchmarks for this technology for 2005. Microturbines: Microturbines are also at the stage of commercialization. Major questions surrounding capital costs, O&M costs and efficiency remain. Capital costs of $500/kw should be demonstrated by 2005. Signposts for commercialization could include the $500/kw target and annual sales of over 1 GW installed capacity by 2004. Signposts representing progress on performance would include efficiency (HHV) above 30% by 2004, and above 35% by 2008. As with fuel cells, microturbine adoption will require improved grid interconnection standards, and demonstrated commercial and residential interest in reliability and CHP applications. Government support will alsa be helpful and many regions are considering supporting microturbines for environmental reasons. Since microturbines are less than new gas turbines and hence have higher carbon dioxide emissions, government support may be based on the premise that microturbines will replace the relatively dirty diesel engines and steam turbines often used today for backup power and CHP applications. in our view, microturbines will be particularly attractive in urban situations where space is a consideration. Although levelized power costs are the main indicator of progress with power technologies, these technologies, these technologies (wind expected) will reach market via niche markets. in particular, distributed generation and combined heat and power applications offer a more favorable economic situation for alternatie power. These markets are complicated, but any evaluation of alternative power would be incomplete without some insight to the role of trends related to CHP and DG. C DISTRIBUTED GENERATION: ) Achief advantage of distributed generation (DG) is that it offers the potential to install new generation without commensurate additions to major transmission lines. Though adding new generation capacity has been relatively easy during times of shortages and rising power prices, transmission line additions have not been keeping pace, meaning that having new centralized generation capacity does not necessarily lead to lower retail prices. This is particularly the case in large load centers such as New Yrk City. Since public opposition to new power line projects is growing, distributed generation appears to offer an attractive solution to the problem. The potential impact of distributed generation is much more complicated than the story suggests. First, two factors contributing to stagnant transmission line investments in the US market- uncertainity over control of transmission assets and low regulated returns on transmission- appear to be headed toward solution. Although regional transmission organizations will not alleviate public concern about new transmission or reduce the lead-times for such projects, they could stimulate a rise in transmission investment. A second issue relates to distributed generation itself. DG proponents often cite net metering as a help to on-site generation, which can produce power for the grid even when it is not needed by the customer. Today's grid is designed predictable, radical power flows, but distributed generation offers the possibility of 'loads' that at times send power into the grid, while at other times drawing on the grid for peak energy needs. Thus, if DG comes to supply a significant fraction of power in certain areas, net metering may require grid additions and improvements at the distribution and transmission levels. A third issue is that distributed generation's contribution would be difficult to predict, complicating the work of grid planners and grid operators. These problems are technically surmountable, but it remains to be seen what costs DG will impose on the grid. Tests with fuel cells connected to Detroit Edison's grid are now helping to clarify what improvements will be needed in a DG-heavy world. ■ Although CHP has been around fora while, it provides its beneficiaries with two needed services at low cost, and also results in higher energy efficiency. ■ Another point about distributed generation is often lost in discussion of alternative power: DG is already here. Highefficiency natural gas combined-cycle plants can be sited near to urban areas without compromising air quality or waking the neighbours. lndeed, this may help explain how utilities and power producers have been able to postpone transmission investments are planned and funded in the future; DG could continue to be dominated by small gas plants and other conventional technologies. Although some planners define DG in terms of plant size, in fact DG is not another term for small plants, for customer-sited generation, or for alternative power in general. C COMBINED HEAT AND POWER: ) CHP is not exactly a glamorous topic in the energy world, conjuring the smell of mildly sulphuruous steam rising from manhole covers outside university steam heating plants. CHP also includes industrial applications (especially in the chemical and paper industries) and small diesel or natural gas engines at ECOGENERATlotl WORLD Lii..
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