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Small electricity generating units distributed in the power system are being promoted by the Department of Energy (DOE) as a way of stabilising America's notoriously weak electricity grid. With an unusually hot summer already under way in the US, fears of a repeat of last year's series of rolling blackouts are growing as demand for air conditioning soars. Wind power is among the small power technologies well suited to the distributed generation, or disgen, concept and thus a potential beneficiary of the DOE's campaign.

A report on the barriers to disgen in the competitive electricity market was unveiled by Secretary of Energy Bill Richardson on May 1. Resistance from utilities is the major hurdle for small scale on-site generation, including wind power, concludes the comprehensive DOE report, "Making Connections: Case Studies of Barriers to Interconnection of Distributed Power." While many of the conclusions are not news to those in the renewables community, the DOE's backing gives them new weight.

Disgen could reduce the amount of power utilities need to transmit during peak demand and help prevent power outages, the report notes. It can also provide greater reliability on-site than conventional central generating stations and can be more energy efficient. Small wind turbines, PV, microturbines and fuel cells are the four technologies that the report -- which features a 10 kW Bergey Excel wind turbine on the cover -- focuses on.

"Hundreds of millions of dollars and hundreds of thousands of work hours are lost each year due to power supply disruptions that could otherwise be avoided if the barriers to distributed electricity generation were removed," said Richardson.

The DOE examined 65 disgen projects, of which 15 are wind or wind hybrids. Only seven reported that they did not come up against major utility related barriers. Many of these artificial market barriers have grown out of long standing regulatory policies and incentives designed to support monopoly supply. Disgen promises greater customer choice, efficiency, improved reliability and environmental benefits, according to the report.

In one typical wind case, the buy-back rate was so low the developer decided to install a smaller turbine. In another example, the developer of a disgen wind project in Pennsylvania was asked to pay fees to the utility that would have exceeded the project's first year gross revenue. Among the costs the developer was expected to cover were the utility's legal fees for preparing an agreement.

The way to go

The report recommends the adoption of uniform technical standards for interconnecting distributed power to the electric grid; accelerating development of control technology and systems for disgen; developing tools for utilities to assess the value and impact of distributed power at any point on the grid; and establishing new regulatory tariffs and utility incentives to help dismantle regulatory barriers.

Richardson has frequently warned about power outages. The $230 billion power sectors need to be repaired, and only deregulation legislation will attract the investments needed for a new generation of power plants, he says. "If Congress fails to act and act soon on restructuring legislation, it will strangle the development of competitive electricity markets," Richardson told a conference recently.

Inadequate transmission, a problem that can be helped by more disgen, is the most immediate problem, he says. Uncertainty over deregulation has brought plans for new transmission to a halt and existing capacity is not only feeling the strain, it is sometimes breaking under it, Richardson said recently. "Essential investments are not being made," he warned. The Energy Information Administration has forecast that US electricity demand will grow 2% this year and an additional 2.1% next year.