Prospective Evaluation of Applied Energy Research and Development at DOE (Phase Two) (2007) / Chapter Skim
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Appendix K Report of the Panel on DOE's Distributed Energy Resources Program
Appendix K Report of the Panel on DOE's Distributed Energy Resources Program
Pages 171-186
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From page 171... ...
Unpresents its observations about the program and suggestions derstanding the value that customers assign to selected CHP for improvement as well.1 attributes and the trade-offs they are willing to make and In summary, the CHP component of the DER program is assigning a dollar value to those attributes would go a long designed to demonstrate four integrated CHP applications, way toward positioning the CHP program in the marketplace. each having greater than 70 percent combined electric and Monetizing the value of attributes would add to the positive thermal efficiency, that could be manufactured and installed net economic benefit figures reported above in item 2.
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From page 172... ...
the total benefits of the DER program by the CHP proportion The panel applauds DOE's program focus on demonstrating of the total DER budget. Following this, benefits were further CHP applications in the broader, more challenging markets adjusted to reflect CHP penetration in the commercial sectargeted and, in particular, on demonstrating applications tor only and to account for the CHP program focus in office that the panel believes are unlikely to be developed without buildings, hospitals, college buildings, and supermarkets.
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From page 173... ...
The critical power shortage can be mitigated by and market success in the DOE CHP program goal -- meeting the 70 percent taking several actions, including reducing voltage; imposing efficiency and 4-year payback goals. The two goals, although very different, represent a single program goal.
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From page 174... ...
High market adoption four global scenarios by using its probabilities for technical was defined by the panel as implementing CHP systems in and market success and DOE's estimate of incremental CHP 50 percent of new buildings and 5 percent of existing build- capacity installed under conditions of high technical and ings; moderate market adoption was defined as 25 percent market success to develop an estimate of incremental CHP of new and 2.5 percent of existing; and low was defined as capacity attributable to the DOE program. That value was 10 percent of new and 1 percent of existing buildings.
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From page 175... ...
APPENDIX K Technical Success: Years to customer payback for 70+% efficient Market Market Success: system based on Segment/ DOE Funding? Market adoption rate Type R&D completed in 2008 High: 50% new/5% existing 4 or less Moderate: 25% new/2.5% existing Low: 10% new/1% existing High Locally high elec prices 5 to 7 Moderate Low High 8 or more Moderate Low Yes High 4 or less Moderate Low High Locally low elec prices 5 to 7 Moderate Low High 8 or more Moderate Low High 4 or less Moderate Low High Locally high elec prices 5 to 7 Moderate Low High 8 or more Moderate Low No High 4 or less Moderate Low High Locally low elec prices 5 to 7 Moderate Low High 8 or more Moderate Low FIGURE K-1 Decision tree for combined heat and power program.
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From page 176... ...
1 Probability of achieving specified payback or better 0.9 0.8 K-2.eps 0.7 0.6 0.5 With DOE; locally high elec 0.4 With DOE; locally low elec 0.3 W/O DOE; locally high elec W/O DOE; locally low elec 0.2 0.1 0 0 2 4 6 8 10 12 Years to customer payback FIGURE K-3 Assessment of technical success for the AEO Reference Case scenario.
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From page 177... ...
APPENDIX K 1 0.9 Probability of acheiving specified payback or better 0.8 0.7 0.6 With DOE; locally high elec 0.5 With DOE; locally low elec W/O DOE; locally high elec 0.4 W/O DOE; locally low elec 0.3 0.2 0.1 0 0 2 4 6 8 10 12 Years to customer payback FIGURE K-4 Assessment of technical success for the High Oil and Gas Prices scenario. 1 Probability of achieving specified payback or better .9 .8 k-4.eps .7 With DOE; locally high elec .6 With DOE; locally low elec .5 W/O DOE; locally high elec W/O DOE; locally low elec .4 .3 .2 .1 0 0 2 4 6 8 10 12 Years to customer payback FIGURE K-5 Assessment of technical success for the Carbon Constrained scenario.
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From page 178... ...
This uncertainty is derived that the technology is expected to improve and the economics directly from the estimated incremental CHP associated with of CHP, given current and expected future energy costs, are each of the technical and market success end points from the also expected to improve. This assumption translates into decision tree and the panel's estimates of the probability of a net economic benefit of approximately $230 per kilowatt each of those technical and market outcomes.
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From page 179... ...
If the displaced heat was four global scenarios. Net economic benefits range from a previously produced by burning natural gas or if the thermal low of $46 million in the High Oil and Gas Prices scenario to output of the CHP system is used to displace electric space a high of $83 million in the Electricity Constrained scenario.
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From page 180... ...
0 3 DOE program estimate of CHP added 2.5 2 Locally low Locally high electricity prices electricity prices prices prices Locally low prices prices prices electricity prices 1.5 Locally high electricity Locally low electricity Locally high electricity Locally low electricity Locally high electricity 1 CHP added by 2025 (GW) 0.5 CHP added assuming panel's definition of low technical and market success 0 Electricity AEO Reference High O&G Prices Carbon Constrained With DOE program Constrained Without DOE program Global Scenario FIGURE K-8 Panel's estimate of the amount of CHP added with and without the DOE program for each scenario.
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From page 181... ...
To get the benefit 1 0.9 0.8 0.7 Cumulative probability 0.6 Expected value without 0.5 DOE program = 1.05 0.4 Expected value with DOE 0.3 program = 1.54 0.2 With DOE program 0.1 Without DOE program 0 0 0.5 1 1.5 2 2.5 3 CHP capacity added by 2025 (GW) FIGURE K-9 Uncertainty around estimated CHP additions for the Electricity Constrained scenario.
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From page 182... ...
Estimated likelihood of high market penetration ranged from a low of 15% (without the DOE program in the High Oil and Gas Prices scenario) to a high of 55% (with the DOE program in the Electricity Constrained scenario)
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From page 183... ...
If the utility sions, the panel suggests that DOE consider addressing the owns and/or operates the CHP systems, it can dispatch them following items as it selects CHP projects for funding that as needed to maximize overall efficiency and minimize polcould improve both program payback and ultimate program lutant emissions. It can also use them as peaking units when success: necessary.
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From page 184... ...
Also, because CHP penetration will risks: vary depending on the relative costs of electricity and natural gas, as well as on electricity system constraints, probabilities • The best results of the DOE program will be realized were not easily assigned across the national market. The where CHP exhaust heat is used for drying and baking food panel suggests that DOE consider setting a system cost goal products, preheating combustion air for large conventional (cost per kilowatt or per million Btu)
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From page 185... ...
He Marija Ili´ holds a joint appointment at Carnegie Mellon c was responsible for the sale of several hundred gas turbine as professor of electrical and computer engineering and generator sets into cogeneration applications, as well as engineering and public policy, where she has been a tenured booking research contracts for advanced concepts such as faculty member since October 2002. Her principal fields of microturbines, gas-turbine-driven air conditioners, closedinterest include electric power systems modeling; design cycle gas turbines, subatmospheric gas turbines, and gas of monitoring, control, and pricing algorithms for electric turbines mounted on air bearings.
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From page 186... ...
In 2003 Mr. Walmet won Gunnar Walmet has been with the New York State Energy national recognition from the American Council for an EnResearch and Development Authority (NYSERDA)
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