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A cost/benefit analysis of full interconnection of customer-owned standby generators.

Synchronous interconnection of small generators with utility power distribution systems offers energy managers the potential to increase electric power reliability and to reduce overall energy costs. In selecting interconnection technologies, energy managers are faced with investment risk as they are challenged to define and deliver the additional benefits associated with closed transition transfer systems. Traditionally, small generators have been installed with an open transition transfer system that creates a physical barrier between the generator and the utility distribution network. In contrast, a closed transition transfer system maintains a fluid link between the utility network with the generator. This article explores the interconnection applications and illustrates the economic impact of interconnecting a backup generator with a utility-owned power system from the energy manager's perspective.

Interconnection of a small generator with the utility grid provides benefits unavailable through isolated installations, including those with automatic transfer systems. A closed transition transfer system linking the customer-owned generator and the utility-owned power distribution network is the most cost effective means available to create full interconnection. Closed transition transfer systems enable synchronous or parallel operations with the utility grid in overlap type transfers, soft loading type transfers, or continuous parallel operations. Synchronous operations enable seamless transfers of load between the utility and the generator. Interconnection benefits include improved power reliability and power quality, enhanced peak shaving capabilities, performance testing under normal operating conditions, and the ability seamlessly to dispatch the generator for economic purposes.

The ability to shift or share power sources enables energy managers to leverage a variety of applications with a level of freedom and flexibility unavailable when generators are isolated from the grid with an open transition transfer system. These advanced applications carry a higher cost than traditional open transition transfer systems. However, in certain applications demanding a high degree of operator control, the additional costs of interconnection are far less than the economic and operational benefits of isolating a generator from the utility grid. Throughout this article, each interconnection application and its costs assume the use of a single generator interconnected with a single utility provider.

Interconnection Applications: Improved Power Reliability

The paramount function of a backup generator is to provide a reliable power source when utility-supplied energy is disrupted. Relative to an open transition transfer system, a closed transition transfer system improves power reliability. Generators with either an open or closed system provide power during an outage. However, only in a closed transition transfer system can power be seamlessly transferred without any interruption of supply when both sources are present.

An open transition transfer system requires that utility-supplied power must be completely disconnected prior to connecting the backup generator serving the load. If an unexpected disruption of utility service occurs, the consumer experiences two "bumps" or two interruptions of service with an open transition transfer system. The first disruption occurs when the utility-supplied power halts (or when a supplemental power source such as a UPS device is taken off line). The second interruption occurs when power is transferred from the backup generator to