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Capturing Distributed Benefits

Factoring customer-owned generation into forecasting, planning, and operations.

Fortnightly Magazine - August 2012

to enroll in DR programs, subject to environmental requirements and program criteria, and can earn extra income for these customers while adding to the utility’s menu of options for coping with load growth.

Rapid DG Growth

Customer adoption of DG—both renewable and natural-gas-fired—has seen a dramatic increase in Con Edison’s territory over the past five years, and this trend is expected to continue. Some of this is due to technological developments and customer interest in green energy, but most can be attributed to market and policy changes—particularly low, stable natural gas prices; state incentives, including property and other tax incentives; and the inherent efficiency of CHP. A meaningful number of customers have both the ability and desire to rely on DG for at least a part of their electric needs.

The forecast for Con Edison’s summer 2012 peak demand is 13,225 MW. And there is currently 160 MW of grid-connected DG in Con Edison’s service territory, 90 MW of which are natural-gas-fired CHP projects installed in the past three years alone. From 2012 through 2018 an additional 75 MW of large-scale customer-sited CHP is planned to be installed, based on discussions with interested customers. These anticipated projects, along with historic adoption rates and market trends, all feed the projection that CHP will comprise most of the 460 MW of new grid-connected DG by 2030.

Customer adoption of renewable energy in Con Edison has been virtually all rooftop solar PV, with a trend toward larger PV installations. Solar PV is expected to make up a small but increasing amount of DG—totaling at least 45 MW by 2015 and 125 MW by 2030, buoyed by state and federal incentives.

The high case projection, shown in red in Figure 1, reflects the possibility for increased adoption of CHP as a result of two potential accelerators. The first is that technology improvements and innovative financing could increase fuel-cell and microturbine adoption. And the second is that oil-to-CHP conversion might increase as local regulations require almost 8,000 customers to phase out using higher emitting #4 and #6 fuel oils for building heating.

Forecasting, Planning, and Operations

Prior to 2011, Con Edison’s practice was to add-back customer-sited baseload distributed generation to a customer’s system load, treating these resources as demand response and effectively eliminating the benefits that the customer’s DG could provide to the system. Con Edison has modified this practice such that a large DG project, running a reliable and tested technology to serve customer base loads over peak periods, can now be reflected in the forecast, resulting in the recognition of reduced demand in constrained areas. Existing continuously operating large-scale CHP is now incorporated into 10- and 20-year load relief plans, contributing capacity that, along with other DSM measures, is deferring multiple traditional T&D load-relief capital projects, realizing savings for the company and its customers. (See sidebar “How Con Edison Includes DG in the Forecast.”)

For example, 24 MW of summer peak-period baseload output of existing CHP capacity is defined as a load reduction in Con Edison’s current area substation and sub-transmission plans—some of which—depending on