Such generation is called 'embedded' as it is integral to a local distribution network (normally 132 kV) rather than the transmission system owned and operated by the National Grid.
From low levels, embedded generation is growing rapidly in the form of renewables and combined heat and power (chp). By 2010 the Government hopes that around 20% of electricity will be generated by embedded sources. The main contributors will be industrial and commercial chp (which will account for 50% of the market), wind, hydro, landfill and sewage gas, and waste incineration.
If someone wants to connect these technologies to the local network, they must apply to the local distribution company who is obliged to offer a least-cost connection. For a small generator, this would mean connecting into the local lv network. A larger generator may be required to avoid local excessive power flows. This would be connected to the nearest sub-station.
There is evidence that this application process varies widely across different distributors in terms of information supplied and requested, co-operation, and speed. This issue is being addressed by Ofgem and the industry.
The connection must meet certain standards to ensure the safety of personnel working on the local network (normally this means the generator disconnects on detecting a fault), and to ensure that the power quality is not reduced.
Connection costs are paid by the generator, although the assets are owned by the distributor. These include maintenance, which may be capitalised into a one-off payment. Connection may be provided by the distributor, or another contractor to the agreed specification.
Generators, unlike consumers, do not pay any Distribution Use of System (DUoS) charges on exported units (see box "Electricity generation in the UK"). In effect, this means that the generator has free use of the network for exporting power, once the connection is paid.
This means that the distributor has no incentive to connect a generator because it provides no income stream. If the generator is also a customer, as with buildings, the distributor will lose DUoS income as less electricity is imported. This is a serious issue for distributors, but a fairly new problem as on-site generation becomes more popular. In the future they may recoup this loss through higher standing charges.
A generator will also want a good deal for exporting power. Many people do not understand why export units are sold at considerably lower prices (typically around 2p/kWh for a small generator) than the cost of import units (about 6.5p/kWh for domestic customers). The first reason is that the import cost includes DUoS, so the correct comparison is the import cost net of DUoS, about 4.6p/kWh. Second, the grid provides power continuously at a very high quality. Although faults may occur on different parts of the network, the national grid as a whole has operated without a break for decades.
In contrast, most small generators are relatively unreliable. Engine-based systems have typical availabilities of 85-95%. Wind turbines and photovoltaics (pv) are highly reliable, but only produce power in suitable weather. In fact, pvs only produce power during the 50% time there is daylight, and in practice give most of their output in the middle of summer days when demand is modest. They make no contribution to the annual peak, which invariably occurs around 17:30 h on a cold winter weekday. Hence all of the conventional assets required to provide continuous power must be available.
Distribution systems have spare capacity in most areas, with asset lives of around 40 y. Therefore, although a growing level of embedded generation will inevitably reduce peak flows through parts of the system, only in a few cases will this reduce the need for capital investment in distribution equipment.
Distributors are also heavily penalised by the regulator for failures in supply to customers. As a result, they tend to favour investment in highly reliable distribution hardware over depending on a local generator to reduce the local peak demand, since even the best generators are far less reliable than modern distribution systems.
Nevertheless, distributors are taking a long, hard look at the potential benefits of embedded generation. This includes modernising design guidelines, monitoring and control, and a risk-based approach to system security as possibly cheaper alternatives to the traditional approach.
Net metering: for and against
Many generators have argued for 'net metering', which means that the meter measures the net power flow in either direction, running backwards when there is net export.
Net metering is used in the USA (under federal legislation) and some other countries for small customers with their own generation. Here, customer-generators only pay for the net amount of power used, meaning that they are effectively being subsidised for both their distribution and supply costs by other customers.
By 2010 the Government hopes that around 20% of electrical energy will be generated by embedded sources
Suppose a net metered customer-generator with a pv system imports 300 kWh in a month, exports 200 kWh, and pays 7p/kWh for the net 100 kWh imported. If DUoS is 2p/kWh, the customer pays £2 for access to the distribution system, £5 for the supply of imported units at 5p/kWh and is, in effect, paid 7p/kWh, or £14, for the local generation excluding DUoS.
If a neighbour has an identical import pattern, but no generation, a payment of £6 for access to the distribution system will have to be made. The consumer will also share with other customers, the burden of buying electricity from the exporting neighbour at the inflated price of 7p/kWh net, or 9p/kWh including DUoS.
That means the customer-generator is using the distribution system to export power for free, paying one-third the real price of access to distribution for normal imports, and getting a premium price for daytime-only, mainly summer, low-real-value exports.
Understandably, net metering is not favoured by utilities and is only practised due to legislation to encourage renewables. It is very unlikely to be adopted in the UK. It is much better to use units on-site because each generated unit will have the full value of an avoided imported unit.
Embedded power does have a higher value to suppliers in some respects:
These factors should be taken into account when negotiating an export tariff.
The future for embedded generation
So where does this leave building designers wanting to install generation?
Mini and micro-chp running on natural gas could become significant in buildings within a few years, even down to the domestic size of around 1 kWe. Work is going on to evaluate the technology and economics of this.
On-site wind turbines and building photovoltaics are unlikely to make up more than a fraction of the 10% renewable target by 2010, but have an important educational function.
Designers need to understand the components which make up the cost of electrical units in order to get the best deal. They should aim to derive most benefits from displaced imports rather than exports. By pooling generation and loads of several buildings, a higher proportion of displaced imports will be achieved because load and generation profiles are smoothed.
Falling electricity prices resulting from tough regulation of distribution costs make it harder to sell renewable energy; this will be partly offset by the climate change levy from April 2001.
Electricity generation in the UK
The UK electricity industry consists of four main components: generation, transmission, distribution and supply. Around 90% – 95% of electricity comes from large power stations and imports from France. These are connected to the National Grid, which provides the bulk transmission system (mainly at 275 kV and 400 kV) in England and Wales. Scotland does not have a transmission grid separate from distribution. The National Grid Company (NGC) owns and operates the National Grid. Power is taken from the National Grid into local grids owned and operated by the 12 regional distribution companies, and distributed to homes. At the end of the chain, customers purchase electricity from supply companies, who pay the energy, transmission and distribution costs, as well as metering and billing. From April 2000, the supply and distribution businesses are legally obliged to operate as separate companies, mainly to ensure fair competition. As a result, many have changed their names. For example, SWEB is now a supply business based in the south-west (and owned by EDF of France), but distribution in the south-west is carried out by Western Power Distribution. Because distribution is still a natural monopoly, it is highly regulated. Last year, the average England and Wales domestic customer paid a total quarterly charge of £7.73, of which £6.29 went to the local distribution company and £1.44 to their chosen supplier. From the unit charge of 6.23p/kWh, 1.66p went to the distribution company and 4.57p to the supply company to pay for the energy. In addition, domestic customers pay vat at 5% on all these costs. Large non-domestic customers have more complex tariffs, which may include a monthly availability charge, a monthly maximum demand charge, and a power factor correction charge as an incentive to improve power quality. In addition, non-domestic customers pay vat at the rate of 17.5%. Payments to the distribution company are calculated on the basis of the cost of assets to supply the peak demand to each customer type. It is important to understand that, although revenue is collected mainly through unit charges, real costs largely relate to the size of the network to supply system peak demand. But those who consume more also tend to have a higher demand at the system peak.Downloads
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Building Sustainable Design
Postscript
Andrew Wright is a research scientist at EA Technology, Capenhurst.
