Research Project Summary Information
Market Potential for DG Using Opportunity Fuels in New York State(ST8605-1)
Resource Dynamics Corp
A number of opportunity fuels exist that may be used in distributed generation (DG) units, including fuels such as landfill gas, anaerobic digester gas from wastewater treatment plants, and biomass gas. These fuels have been tested with microturbines and other DG technologies. What is not well known is how opportunity fuel economics may impact DG use, how reliably they can produce energy, and the potential total market impact of their use.
The Resource Dynamics Corporation (RDC - the Contractor) is currently undertaking a national DG opportunity fuel study for the Oak Ridge National Laboratory (ORNL) and the U.S. Department of Energy (DOE); this project will leverage the methodology and efforts of the ORNL/DOE project and provide a detailed look at the potential market for opportunity fuels in New York State. This effort will summarize what has been learned about the use of these alternative fuels used in DG applications, and, importantly, quantify how key opportunity fuels might boost the market potential for DG in New York.
Policy makers and DG stakeholders may use the market potential estimates to be developed in this project to better focus their resources on the alternative fuel sources and the associated DG and combined heat and power (CHP) technologies that have the greatest impact; thereby increasing DG penetration and the societal benefits associated with DG applications. One possible way to enhance and expand the use of DG is to reduce the cost of operation through cheaper fuel sources. This is seldom being done today, yet there are many alternative fuels being tested or even being used commercially in niche markets today. Many of these opportunity fuels are available at low prices – in many cases they are waste products.
Of the many opportunity fuels that can be used, key questions that arise concern their cost, availability, reliability, and transportability. On-site generation can often take the generator to the fuel source, mitigating both the transport problem and lowering the cost. Many DG stakeholders in New York are not aware of the potential to use opportunity fuels in DG applications. This study will show potential users when and where opportunities exist, and the magnitude of the potential opportunity for using these fuels in DG applications. It will also indicate what opportunity fuels require modification to the DG technology, and their cost impact.
This study is particularly timely given the recent run-up in natural gas prices. Average commercial sector natural gas prices reached around $8.00/Mcf in 2003 in New York, and industrial prices were over $7.00/Mcf. Commercial prices were less than $5.00/Mcf in 1999, with industrial prices even lower. Most industry experts are predicting continued high natural gas prices for the next few years. These high gas prices are one of the biggest impediments to DG gaining market share, making it much harder for gas-fired DG to compete with the grid. Given current market conditions, DG fueled by opportunity fuels may be a bright spot in the DG marketplace in New York.
The methodology to be used in this project, a bottom-up approach, takes project economics into consideration, including actual tariff electrical and gas pricing in New York State; and provides a reasonable upper bound to the potential market. In addition, the bottom-up methodology helps target the industrial and commercial sectors in New York that are most likely to adopt the DG technologies using opportunity fuels. The bottom-up approach has a number of advantages over top-down technical market potential methodologies. Top-down generally shows how big the market could be if every potential site adopted the technology. These methodologies usually assume each site that has access to the fuel should be counted as potential, regardless of whether or not it is cheaper to buy electricity from the grid.
Resource Dynamics Corp
7921 Jones Branch Drive, Suite 230
McLean, VA 22102
NYSERDA Contact Information
R&D - Mfg Tech & On-Site Pwr