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Distributed Generation: Doomed by Deployment Details?

The industry makes strides, but messy issues like air quality and building codes could be showstoppers.
Fortnightly Magazine - February 1 2001

There's a time line. The utilities can't run you around. It will be much more simplified."

Questions remain, however, about the more complex issues of larger machines, such as the ground rules for selling excess capacity back onto the grid.

Nevertheless, progress on the small-scale DG front lays the groundwork to resolve issues involving larger units. Getting the smaller DG applications out of the way, Lindh says, "establishes a process of how decisions are arrived at on interconnection that I think is a useful way to go.

"I think in terms of arriving at a more standard process for say, export applications, I think it will make it simpler to just focus on that and arrive at some kind of standardized application for that component. So, it's not done, but I think we are 60 percent of the way there."

Lindh says the process of hammering out small-scale DG interconnection solutions cleared the air between the utilities and DG proponents. The industrial advocate, in fact, suggests that DG proponents got the chance to call the utilities' bluff.

"Some of the things the utilities were requiring were just nuisance. It was gold-plating, and it wasn't really necessary to protect either the generating equipment or the utility's distribution system."

Unlike the rules hammered out for small-scale DG, however, there is no time line to come up with solutions for the larger equipment, but Lindh promises to push the decision makers.

"If I haven't heard something in a couple months, you can bet I'll call the Energy Commission staff and say, 'So what's up with this?'"

Emissions Limits: One Rule Fits All Sizes?

Aside from the more publicized squabbles over interconnection, says Lindh, the second sticky point will prove to be limits on DG emissions.

"That's in a real state of flux right now," she says, pointing out the soaring prices of emissions credits in the state in 2000.

Lindh asserts that distributed generation should be given every opportunity to flourish because it not only may alleviate supply limitations, but it can be environmentally friendly. "I really think that all of the policy wonks have come to the conclusion that distributed generation really can play a role to help fill some of the need in a much more, perhaps, benign way than building a big, giant central generating station."

That's exactly the attitude that environmentalists are leery of.

"Distributed generation is often portrayed as being environmentally friendly, and the reality is that there's a huge disparity between the different technologies and units and their environmental impact," says Sheryl Carter, senior policy analyst at the Natural Resources Defense Council.

Last year the state legislature recognized a need to address the emissions issues that distributed generation creates when it passed Senate Bill 1298. The bill, approved by Gov. Gray Davis on Sept. 25, calls on the California Air Resources Board (CARB) to create uniform emission standards for DG equipment exempt from permitting requirements of the state's air quality districts.

In essence, SB 1298 fills in the gap of regulation for equipment below the size of generators regulated