Distributed Generation is to Electricity as PCs are to..._

By Mark P. Mills
Distributed generation (DG) is the latest "killer application" at energy conferences and seminars. Global apocalysts say DG is to electricity what the personal computer (PC) has been to the computer industry. Just as PCs supposedly took down mainframes and the likes of IBM, so too will DG erase central, fossil-fueled power plants and big utilities.

Even otherwise serious vendors of DG technology have found themselves seduced into playing the climate change card in the hopes of benefiting from imminent federal largess.

DG enthusiasts believe the day will soon come when consumers can head over to Home Depot and buy a little "appliance" to take home, plug in, and supply all the power needed, grid-free. Prototypes already exist for a refrigerator-size generator that works like the "auxiliary power units" airplanes use to make electricity while sitting at the gate (don’t they make life comfortable_). The trade press is filled with DG hype. Independence (from those "evil" utility giants who’ve provided us with cheap power for 75 years) looms near.

Eco-hype

Energy tech forecasters and global climate change scaremongers share an ally. The anti–fossil-fuel lobby has for 25 years been predicting the imminent demise of fossil fuels, the planet’s primary energy sources, and the imperative to shift to something else. The climate change threat only increases the urgency of making an ostensibly inevitable transition to a post–fossil-fuel world.

What’s more, DG kills two birds with one technology: Fossil fuels and utilities, both of which apocalysts reflexively dislike. DG, they believe, will set us free of central coal-fired power plants. After all, coal supplies 55 percent of what goes into the power grid. And that percentage is unlikely to diminish.

Exciting things are happening on the DG front. But they will not have the transformative effect their advocates would have you believe they will. In fact, DG will not replace coal plants, but will complement them and almost certainly increase the use of fossil fuels and likely pit oil (not favored by apocalysts) against natural gas (reluctantly favored by apocalysts).

PC-mania

The PC analogy, while seductive, completely fails. Regardless of the astronomical growth in PC use, the venerable mother of computing’s "heavy iron," IBM, is far from out of the picture as a major corporation, as its stellar stock performance this decade attests. IBM and its ilk are benefiting from, not being eviscerated by, the information revolution in all its forms.

The data traffic that PCs and the Internet create, and the data appetites expanding applications for computing create, are driving the market toward so-called "super servers"—the 21st-century version of "mainframes."

But those using the DG: PC analogy usually mean to imply that DG stands on the threshold of rapid cost reductions, emulating the collapsing price and rising performance of PCs over the past 10 years. You hear them warning utilities that central station power plants will follow the fate of slide rules.

The PC price/performance trend arose from advances in the technology used to fabricate integrated circuits. Declining scale and increasing speed equal lower costs. It’s "Moore’s Law." Still, though today’s desktop is more powerful than yesterday’s mainframe (and today’s mainframes are awesome), Moore’s Law just doesn’t apply to DG and electricity. Sorry.

Power plants have the distinct disadvantage of being constrained by a much longer-standing law, from the realm of physics—the Carnot limit for thermo-dynamic systems, which is the same for all power plants, big and small. Translation: The temperature of combustion sets the limit for the energy efficiency of burning a fuel. Size doesn’t matter; and small actually may be worse. Technologies to tweak efficiency are not only applicable to all sizes, but many of the tweaks are easier and more cost-effective for big iron. This basic tenet holds true for all of the DG technologies based on burning fuels, which are the most likely near-term DG systems.

PCs Ain’t PVs

But what of solar, wind, and fuel cells, the apocalysts’ true DG darlings_ After all photovoltaics (PVs) are made from the same basic stuff as microprocessors. Sorry, the analogy still fails.

Sure, PVs are made from silicon (or similar materials) just like microprocessors. Here the similarity ends. To gain greater PC power, engineers make ever-smaller components of increasing density, thus expanding the total number of microscopic electronic devices per square inch.

But you just can’t make a smaller, more efficient PV. Rather, you need more (lots more) square inches—nay, square acres—of silicon devices to gather the fuel, which is in this case the sun’s energy. True the sun is limitless, but it’s just too darn far away to produce high-density power, hence the need for lots of acreage to gather the dilute power. (Not so of course on Mercury, where ponds would be molten metal, not water).

Wind power suffers from the same problem. Greater economy and power don’t come by making windmills smaller—you need bigger ones and more of them, lots more, to power a nation.

Then what of fuel cells, those intriguing devices that use electrochemical magic to make electricity without combustion_ In brief: Too expensive and they still need fuel. The materials that make the electrochemical magic happen are expensive. Lower costs face basic, almost intractable (but probably eventually solvable) materials issues.

Fuel cells run on fuel, ideally hydrogen. Virtually all of the solar system’s hydrogen is in the sun: inconvenient. So we can make hydrogen here (expensive and energy-intensive) or use the hydrogen inherent in conventional fuels such as methanol and even gasoline, also a costly exercise. We will, to be sure, eventually see real advances in fuel cells, but they’re no threat today to the gigawatts of conventional generation.

Oil-fired DG

Which brings us to the last category for DG: microturbines and diesel engines. Most of the current market hype surrounds microturbines, which are really just very small jet engines tied to an electric generator. They do work, but they need fuel—usually natural gas, but oil works too. They still cost too much, and despite the hype, you still can’t buy one. Worse yet for efficiency mavens, they are less thermally efficient than central power plants.

That said, it is clear that practical and useful microturbines will emerge soon, and almost certainly in advance of any other new form of DG. The most likely near-term applications for microturbines will be in three areas: where reliability supercedes cost; where power is very expensive, capital scarce, and incremental power needs modest (Costa Rica, for example); and in meeting costly peak demands.

Remember last summer’s astronomical price spike for peak power during the heat wave_ Just a few of those go a long way toward covering the higher costs for DG peaking. In all likelihood, the folks installing microturbines to shave peaks will be the same as those operating or selling coal-fired baseload power to create a seamless, blended reliable and economical power source.

Ironically, the only immediately cost-effective DG technology is the venerable diesel engine. So-called diesel-gen sets already exist by the tens of thousands, powering oil fields, small villages, and military bases. Recent advances in materials and controls have made diesels even cheaper and more efficient (better than microturbines), and exceptionally reliable. And you can buy them right now.

Power experts are already forecasting that deregulation will generate a boom in use. They can burn either oil or natural gas, and in most applications use the former. This is clearly not what apocalysts intend deregulation of utilities to effect.

Off-peak coal: a real "killer app"

Perhaps the worst nightmare for coal-haters is the potential of new technologies to achieve cheap off-peak kWh storage—distributed storage. Small, high-tech flywheels look promising (just park them outside beside your central AC unit). You spin them up at night with an electric motor powered by otherwise "wasted" and ultra-economical (maybe 1.5¢/kWh) off-peak power. The motor works as a generator in the daytime, drawing the kinetic energy off the flywheel. Easy, reliable, no new fuels, one moving part. Slick. Uses the cheapest off-peak power too; hydro (and nuclear) in a few places, coal everywhere else.

The capital costs for diesel gen-sets are already a lot lower than for central power plants. Given that, and the low cost of fuel, why isn’t every business making its own power already_ Few end-users want the operational and maintenance hassles. Electricity coming off the grid is awfully low-maintenance. The collective cost of tending to millions of distributed (quirky) products remains the showstopper.

We’re all winners

Nonetheless, significant and viable niche markets for DG are inevitable, probably up to 10 percent of total U.S. demand. Once momentum starts building, and reliability grows, emerging technologies can make a noticeable dent in new supply. A critical leap for fuel-based DG will be cost-effective, network-based remote maintenance and monitoring of distributed equipment through advanced sensors, information technology, and neural networks.

Bottom line: DG is coming. The computer analogy does work in one way. Just as PCs are driving demand for mainframes, so too will DG drive demand for larger, more efficient and low-cost central power sources.

Physicist Mark P. Mills is a technology strategist and energy consultant and president of the research-consulting firm Mills•McCarthy & Associates Inc.