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The Benefits of Distributed Resources to Local Governments

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Improve EnvironmentClean <strong>Distributed</strong> <strong>Resources</strong> Consumption


Guide Economic DevelopmentGoal: Attract Information Industries• Can <strong>to</strong>lerate expected outages <strong>of</strong> 15 min. per year• Electric grid has an expected 8 hours <strong>of</strong> outages per year (6hours from T&D problems, 2 hours from earthquakes)• Choose either fuel cell or PV/battery system• Fuel cell manufacturer gives 100% operation guarantee;natural gas supply has <strong>to</strong> be shut <strong>of</strong>f four out <strong>of</strong> every fivetimes that there is an earthquake for safety reasons• PV/battery system supplier gives 99.9% operationguarantee under normal conditions; during earthquakes, ithas a 10 percent chance <strong>of</strong> failure


Natural Gas Fired Fuel CellExpected Outage = 1 hour 45 minutes/yearPower OutageProbabilityGrid Down(0.001)Earthquake(0.25)Gas Unavailable(0.80)Gas Available(0.20)2.0 x 10 -4-No Earthquake(0.75)Gas Available(1.0)-


PV System With BatteriesExpected Outage = 14 minutes/yearPower OutageProbabilityGrid Down(0.001)Earthquake(0.25)No Earthquake(0.75)PV System Down(0.10)PV System Avail.(0.90)PV System Down(0.001)PV System Avail.(0.999)2.5 x 10 -5-7.5 x 10 -7-


Electrical System Reliability• Short-term outages• Sustained outages. Communities need <strong>to</strong> assesstheir vulnerability <strong>to</strong> a sustained power outage– Do they rely on a single source <strong>of</strong> power?– Is their power supplied by a long transmission line that,if damaged, would take a long time <strong>to</strong> repair?


Protect From High Electricity PricesExperience from San Diego, California• SDG&E cus<strong>to</strong>mers first <strong>to</strong> experience the fulleffect <strong>of</strong> deregulation• <strong>The</strong>oretically, electricity supply costs should nolonger be a concern <strong>to</strong> SDG&E• Assembly Bill 265 (passed legislature 8/30/00)– establishes a retroactive $0.065/kWh cap on the cost <strong>of</strong>energy for ratepayers, when market price is $0.20/kWh– SDG&E pays difference between the rate cap and themarket price and recoups shortfall later


Protect From High Electricity PricesSouth-Facing PV SystemsEnergy Prices ($/kWh)$0.75$0.60$0.45$0.30$0.15$0.00PV ElectricityOutput Prices12 AM 6 AM 12 PM 6 PM 12 AMTime <strong>of</strong> Day1.000.750.500.250.00PV Energy Production(kW/kWAC <strong>of</strong> PV)


Protect From High Electricity PricesWest-Facing PV SystemsEnergy Prices ($/kWh)$0.75$0.60$0.45$0.30$0.15$0.00PVOutputElectricityPrices12 AM 6 AM 12 PM 6 PM 12 AMTime <strong>of</strong> Day1.000.750.500.250.00PV Energy Production(kW/kWAC <strong>of</strong> PV)


Protect From High Electricity Prices• Widespread implementation <strong>of</strong> PV would benefitall electricity consumers in California because itwould increase supply during high price periodsand thus reduce prices for everyone (externalitybenefit)• Government may want <strong>to</strong> encourage west-facingPV systems even though they are not necessarilyoptimal for individual cus<strong>to</strong>mers


Disaster Relief Support• Hurricanes, <strong>to</strong>rnadoes, fires, floods, earthquakes, ices<strong>to</strong>rms, become disasters when they disrupt people’s livesand damage property• PV systems have proven <strong>to</strong> be very valuable duringdisasters; have powered refrigera<strong>to</strong>rs, microscopes,medical equipment, lighting, radios, fans, traffic controldevices, communications and other general electricalequipment (Florida Solar Energy Center)• Small amount <strong>of</strong> PV on every business and residence couldbe very valuable during disasters (part <strong>of</strong> disasterpreparedness kit)


Conclusions and Actions• Incorporate in<strong>to</strong> governmental buildings where feasible(obtain cost-savings and distributed benefits)• Eliminate biases in the tax system that favor traditionalelectricity supply over distributed resources (Californiaexample <strong>of</strong> tax <strong>of</strong> 0.02% on electricity purchasedcompared <strong>to</strong> 22% tax on PV system until laws werechanged)• Use distributed resources <strong>to</strong> accomplish goals (e.g.,disaster preparedness and economic development)

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