September-October 2004

After Brownouts, Motor City Sees the Light With DG Solutions

Detroit Edison is teaching other utilities how to put power on the road.

It's not your textbook model for launching a grid-wide distributed generation (DG) strategy, but in the summer of 2002, Detroit Edison "sort of stumbled into" onsite power, as engineer Richard Seguin recalls. Sweltering days and muggy nights were keeping air conditioners at full blast and stretching circuits beyond capacity. Outages began hitting on consecutive days. Seguin and his colleague in energy resource planning, Haukur "Hawk" Asgeirsson, and other Edison engineers realized they needed a major solution, quick. And so, in less than four days they rigged and applied a transportable backup generator, complete with hookups. At any sign of trouble, it could be dispatched instantly to restore power or prevent a shutdown. All in all, says Seguin, "It saved our bacon."

It also stimulated their thinking about DG's wider possibilities. Now, two years on, DG has evolved from its role as a one-shot "repair kit," into a permanent and indispensable specialty tool. It gives Edison's engineers much greater flexibility and improved grid reliability—all cost effectively.

Seguin and Asgeirsson had heard about and entertained various DG applications before, but, in weighing the possibilities, there were always the overriding negatives: first, concerns about DG's impact on grid security, and second, on the business side, the potential loss of revenues if customers should opt to buy their own systems.

Besides, these distributed energy resources (DER) would have to be deployed and perhaps serviced by old school "sticks-and-wires guys" who, although adept at cable-splicing, know next to nothing about generation.

Then there's maintenance: How often do generators need monitoring, inspection, and care? How reliable are they? What's the downside if that six-figure investment throws a bearing and locks up at 3:00 a.m.óboth as a safety hazard and as a material loss?

On the plus side, though, Edison's DER planners realized that having a couple of quick megawatts at their disposal would come in handy all over the place: "There's a lot of times we have generator needs," says Seguin, "but we just don't know when they're going to occur."

It wasn't a big leap to realize that the first transportable generator, originally slapped together in crisis, could also stay parked, if need be, for longer-term assignments. For example, if a substation needed a boost during extended peak hoursóand this solved a problem one seasonówhy not leave the equipment nearby for next year? In business terms, 1 to 3 megawatts of "booster" power could allow the postponing of expensive substation upgrades. Without the stopgap generator, Edison might easily be compelled to meet any yearly overload of, say, 50 or 100 hours on a circuit, first by broadcasting public requests that people turn off appliances (not very appealing, and it doesn't make utility planners look very bright) or, eventually, by investing $1 million-plus in new power lines, transformers, and substations. This works out to huge sums per kilowatt-hour. The utility is forced to build infrastructure that's used, initially, a tiny fraction of the year.

By comparison, deploying generators might easily meet the peak load "for a cost of $50,000 to install… and $32,000 in annual charges. That, "notes Seguin," is a big potential savings." Better still, it will keep paying off for years, until the nearby slowly growing baseload increases beyond the generator's output. Substation upgrades eventually become necessary, but if you can delay them three, five, or seven years, so much the better.

Also, as most utilities have discovered, people generally don't like new stations in their backyards; often they complain rather noisily to regulators and politicians. Besides which, notes Seguin, "You can't pick up a substation and move it very easily as the load migrates out to the suburbsóbut you can move a generator on wheels to follow it very easily."

Transportation and deployment is easily done with rented tractor-trailer rigs. All the necessary hardware is securely mounted on skids, including, as Asgeirsson explains, the transfer and switchgear, protective equipment, and so on. The size of a generator set for this mission is constrained only by the hauling rig. "The biggest thing we could fit" on a 40-foot trailer turns out to be 2 megawatts, notes Asgeirsson.

Once parked at its application site, the sturdy container serves as the generator's housing and sound baffle. Additional connection and switching gear follows along in a second flatbed trailer, but, Asgeirsson points out, crews are working on squeezing everything into one box.

Refueling and servicing haven't turned out to be significant chores either. The natural gas,fired units (1-megawatt Deutz Engine models) are served by the regular distribution pipes, and the 2-megawatt Cummins diesels are equipped with 6,000-gallon storage tanks. Late in the spring of 2004 another new Cummins was being installed for the upcoming hot season; it will run four to six hours a day for peak shaving, Asgeirsson notes, and it's equipped with a 2,100-gallon onboard tank, sufficient for about 18 hours of operation.

As of the spring of 2004, Edison already had deployed nine generators in this mobile fleet, seven of them fully portable and permanently truck-mounted. Each boxed unit might remain at any given location for as little as two days or as long as five years.

Permitting is required, of course, as well as compliance with the state's environmental and safety standards for such equipment, but these rules are straightforward and not unduly restrictive.

How do residential customers react to tractor-trailers rolling down their street with hefty generators, and parking them for the summer?

Curiously enough, although some complaints have been received, the overwhelming reception has been fairly positive. The fact that the system remains on a truck bed rather than on the ground is actually somewhat appealing, because it reminds residents that the installation is meant to be temporary. Local residentsóperhaps remembering the brownouts of 2002óknow that extra power is absolutely necessary for their year-round comfort. Also, because the container is solidly built, the sound level isn't onerous. In communities where Edison must secure permission to park the setup on common property, the utility first introduces the portable power concept, using a persuasive eight-minute video that shows examples and explains the necessity. Residentsógiven a choice between the relatively unobtrusive truck, and the prospect of rolling brownoutsófind that it's not a tough call.

Besides providing emergency power and helping defer upgrades, still more uses for portable sets have emerged. For example, whenever a section of the grid needs to be turned off to allow service on a distribution line, instead of putting people in the dark for a few hours, a DG truck can be dispatched, and distribution continues even while primary lines are deactivated.

Another example: In 2004, construction on a cable conduit serving a heavily loaded circuit was delayed due to problems obtaining rights of way. The circuit would surely be outted under the air-conditioning load, so Asgeirsson's department installed a generator "to get us over this summer," he says. "By the time next summer rolls around, we'll have additional circuits to take care of all the growth that's going on." Meanwhile, the Cummins can be picked up and re-deployed somewhere else.

The availability of a mobile fleet has dramatically affected emergency-response planning at Detroit Edison, allowing it "to sort of ëstandardize' or even ëpre-plan' " all its emergency responses, Seguin notes. Potential problems are anticipated by the usual means of examining load curves and historical outages. This provides an overall picture of "where emergency backup power may be needed next, how much, and at what voltage," Seguin says. "We know what we're going to do when the situation arisesóeven if we don't know where."

Discovering more and more applications has meant that there's relatively plenty of work for the generators to do. It's not likely to sit idle during the peak season. Outright purchasing of generators, rather than leasing, has turned out to be advantageous because the Michigan rate-setting commission tends to look more favorably on capital investments.

What happens if big electric customers see the utility company buying onsite power and decide they want to own some too? Edison isn't really averse to this, because it's often a win-win outcome. First, the customer wins by getting its peak shaving and saving money this way. Second, Edison usually wins by getting some deferral of its seven-figure expense for the big substation upgrade. In any case the utility gets to collect standby charges. Besides, as an alternative to having a customer buy DG from a third party, another Edison sister company may offer a deal on leasing an Edison-owned generator for five to seven years. This ëPremium Power' plan guarantees the customer standby power, while simultaneously helping Edison manage the wear and tear on heavily loaded circuits. If the customer still wishes to purchase a third-party generator after all, a nice deal may be worked out with another one of Edison's unregulated sister companies, DTE Technologies (see sidebar), which markets DER nationwide.

If mobile DG could blossom in the Motor City, it could probably do so in lots of places. So, starting in 2003, Edison's DER planners began helping other companies overcome the few basic hurdles to DG, and to learn from Edison's innovations, by inviting them attend a forum on DG implementation. This was held in September in Detroit. About two-dozen people representing 17 utilities attended; the turnout was marred, however, by an ill-timed hurricane on the Atlantic coast that forced attendees to scramble back to work.

A second, greatly expanded conference followed in May 2004, drawing 62 energy professionals. Presentations were given by other recognized experts as well as Edison's, and covered nearly two-dozen critical topics, such as DG's long-range prospects; regulatory perspectives; distribution planning; capital budgets for DG; project development, analysis, and site selection; environmental factors; interconnection issues; protective relay issues; DG for transmission and distribution relief; and several case studies, including both utility-owned and collaborative or customer-owned cases. Attendees toured the region to see generators in operation and observe an innovative wireless load-following, monitoring, and remote-control system for DG, which is completely integrated with other automated controls (see sidebar).

For those interested, conference proceedings are available for purchase at nominal cost. Asgeirsson is thinking about sponsoring a third conference in the spring of 2005; for attendance information or other inquiries, contact him at asgeirssonh@dteenergy.com.

Edison engineers also have been busy presenting DG success strategies at other industry conferences, and are currently gathering their studies, findings, and reports into a book of best practices.

Seguin points out that many utilities probably fit the profile for adopting DG, following Edison's model. In particular, those "whose load is growing slowly, which are strapped for capital, or constrained by reliability-based ratemaking could probably benefit greatly from learning how, when, and why to implement mobile generation. Asgeirsson adds: "One of the reasons we put on this second conference already is because we feel strongly that the utility industry has a large interest in adding distributed generation on a grid system. It is definitely one of the tools that we, as planning people, can use to help on distribution."

Now that the nation's seventh-largest utility is urging others to get onboard with DG, it's ironic to recall that, only two years ago, Detroit Edison itself was more or less forced into buying its first generator. Far more typically, a big utility must plot each change with extreme caution. In this case, however, Seguin proposes a radical departure. "Just go install one," he says. "Go through the experience of installing a generator, and do it."

Engineers and crews will find that the learning curve and break-in experience "isn't that bad," he avers.

As for discovering specific application, don't worry about that either: There'll be plenty. "Buy one the first time, and you will begin to see the reward of having it available," he says.

An Edison official who addressed the 2003 forum suggested that other utilities "set up a DG working group," Asgeirsson recalls. "And not just to handle the interconnection standards Ö but they should actually be charged with the responsibility of looking for applications." The key to launching DG "is to start encouraging it within your own organization" in a proactive wayóand not have it forced upon you by a public service commission, as happened this year in New York.

What about technical assistance? Reliable technical advice, persuasive business arguments, hand-holding, and other supportive grid-connection resources can be obtained from the Electric Power Research Institute (EPRI.com), the Electricity Innovation Institute (E2I.org), Gas Technology Institute (gastechnology.org), the US Department of Energy's Office of Energy Efficiency and Renewable Energy's Distributed Energy Program (eere.energy.gov/de/), and two Detroit Edison divisions (see sidebar)ónot to mention the rest of the DG industry, which, naturally, is eager to see barriers fall and cooperation grow.

Seguin's advice to DG providers who would prefer utilities as partners instead of competitors, is, "first and foremost," don't complain about long delays or standby charges; instead, try to appreciate "what they need, why they need it, and approach it in a partnership instead of from an adversarial standpoint." A supplier who approaches customers as if seeking to "steal" some utility business isn't exactly building bridges of cooperation, and resulting DG projects will likely go nowhere against a determined opposition.

A far better strategy is to find out what the utility's needs and problems are, which DG might solve, then look for specific project proposals in that context. As noted already, one of DG's most attractive selling points is its role in handling peak loads, thus allowing the utility to defer major upgrades until needed. DG will prove itself far more affordable and flexible there. Another role is in power reliability. For example, Seguin explains, "Where you're going to have a stranded 30-MVA [megavolt-ampere] substation out there and maybe you're better off putting in a 2-megawatt generator" as a backup for it. One or two megawatts "may be the right solution to get you out of sticky situations" and circumvent an outage.

Nor is it really all that difficult, he says, to find win-win-win scenarios in which third-party customers get to save on current electric bills and future rates; the utility wins by deferring the underutilized upgrade and by keeping regulators at bay; and a DG supplier gains a toehold on the grid, thanks to a few success cases. Seguin thinks that, based simply on this model, perhaps 1%,3% of many utilities' power should be coming from onsite generationówhich, though small, is in fact "a huge market" compared to nothing. Approached in this realistic range, a generator is no longer an invasive threat but an important, if specialized, tool to fix local problemsóanalogous to, say, certain digging equipment.

On a final note, Asgeirsson points out that DG must ultimately make sense, above all, from the customers' financial standpoint, because they're the ones paying the bills. "We're always looking for the most economic way to serve our customer," he says. And so, when it comes to designing circuits to handle a few peak days' load, "this [DG] is a tool that allows us to manage that peak well. That's been our approach. We believe in this concept, and it's working for us economically. It's solving utility problems. That's how we're doing it, and we are spreading the word."