Roll over photos for details of energy recycling projects.
Frequency Regulation Compensation in the Organized Wholesale Power Markets
Docket Nos. RM11-7-000, AD10-11-000
Recycled Energy Development appreciates the opportunity to comment on the Federal Energy Regulatory Commission’s efforts to ensure organized wholesale markets provide proper compensation for resources providing frequency regulation. RED encourages FERC to think broadly regarding the approaches that can correct a system’s frequency deviations. We believe FERC can simultaneously enhance frequency regulation and encourage industrial efficiency by supplying compensation for the benefits provided by distributed combined heat and power (CHP) and waste heat recovery (WHR) projects. T&D system models, for instance, show increased local generation – offering active power factor support controlled by the grid operator – would cut U.S. average annual line losses in half.
Grid operators typically rely on passive power factor controls (such as capacitance and inductance banks) and inefficient spinning reserves, and they fail to recognize the benefits of local active power factor support. If they were, however, to offer long-term contracts for active, local power factor support from existing and new local generation plants, grid operator would gain control over the excitation voltage of generators at or near load users. With such leading or lagging excitation, the grid operators would be able to actively and dynamically balance reactive power in each branch of the T&D system. By offering long-term contracts for power factor support, they would spur local generation to be built where needed to support frequency regulation.
New local generation also can cut line losses in two broad ways. First, such power tends to flow directly to users, avoiding the average 6.5% line losses from electricity generated centrally. At the same time, distributed generation’s reduction of current flows, all things being equal, reduces line losses on the remaining centrally generated power by roughly a like amount, making one megawatt-hour of local generation displace about 1.13 MWh of central generation. Second, studies at Carnegie Mellon University and MIT have shown that by adding grid operator control of the local generation power factor, one MWh of local generation can displace up to 1.47 MWh of central generation, thereby providing a more efficient approach to frequency regulation. At this time, we are unaware of any grid operator paying the local generator for the value of such displaced MWh’s.
Distributed projects offer another advantage. While passive VARS from capacitance banks decrease as voltage drops, increasing the possibility of a cascading system voltage failure, active VARS from local generation are voltage invariant and produced near the source of much of the reactive power imbalance.
A second novel approach to voltage support involves inducing industrial CHP plants that utilize modern gas turbines in order to meet this host’s thermal needs as well as supply spinning reserves. The current utility practice is to deploy electricity-only simple-cycle gas turbines at part load during most weekday daylight hours; such turbines typically operate at an inefficient heat rate of over 13,000 Btu/kWh. The more economical alternative is to utilize one of the new aero-derivative gas turbines (such as the GE LMS 100) in CHP mode. As an example, this 100 MW machine would usually operate at the 30 to 40 MW of electric generation needed to match the industrial facility’s thermal load, but it would be available to instantaneously offer the additional 60 to 70 MW as spinning reserve. These aero-derivative gas turbines feature separate compressor and power shafts, thus offering much better part-load efficiency. But the real gain of this CHP/Spinning Reserve approach is in heat recovery, since most of the gas energy that does not produce power emerges as useful thermal energy and displaces the host’s boiler fuel. Then, on grid operator command, this installation can ramp up generation to full load at an efficient 7,200 Btu incremental heat rate.
Grid operators can induce such CHP/Spinning Reserve installations by offering long-term contracts for the spinning reserve capacity and paying for the incremental costs of added generation on a pass through basis. Such contracts will induce private investment in such plants, where the value of frequency regulation is enhanced by the efficient CHP generation and by eliminating the many hours of highly inefficient generation of typical spinning reserve turbines.
Inducing either local generation supplying active power factor support or CHP/Spinning Reserve generation will require long-term contracts. These projects are major capital investments with only one buyer of the voltage support/spinning reserve services. Without long-term contracts, private-sector investment will be retarded for fear the grid operator could slash prices after the facility has been built.
Recycled Energy Development commends FERC for examining the un-level playing field that discourages innovative means to provide frequency control. The suggested long-term contracts for local active power factor support provided by distributed CHP and WHR will enhance frequency control, grid reliability, as well as industrial efficiency and productivity.
Dick Munson
Recycled Energy Development
640 Quail Ridge Drive
Westmont, IL 60559
630-590-6030
http://www.recycled-energy.com
Contact us to discuss how energy recycling can help your organization.
We believe FERC can simultaneously enhance frequency regulation and encourage industrial efficiency by supplying compensation for CHP and WHR projects.