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Principal Investigator: Joseph Lannucci
Distributed Utility Associates
Livermore, California
June 2000
ARB Contract No. 97-326 (Full Report)
ABSTRACT
This study evaluates the net air emissions effects from the potential use of cost-effective distributed generation
(DG) in California. The primary objectives of the study are, first, to estimate the economic market potential for
distributed generation, and second, to determine the resulting air emissions given that level of deployment. The
ultimate goal is to provide regulators and policymakers with information that will contribute to the development
of strategies and policies regarding distributed generation.
Distributed generation may represent a less expensive energy delivery option, for utilities who desire to defer
or avoid capital expenditures for generation, transmission and distribution infrastructure, to electric service
providers (ESPs) and other market participants who may employ distributed generation to provide "value-added"
services such as high reliability or premium power programs to customers, or for customers who may want to reduce
overall energy costs, improve their electric service reliability, or increase their overall efficiency via cogeneration.
The analytical approach utilizes a three-step process. First, using the available distributed generation technologies
and their costs, the economic market potential for distributed generation for both utilities and large commercial/industrial
customers was estimated for the years 2002 and 2010. For utilities, both peaking and baseload applications
were analyzed, and for customers the likely applications of cogeneration were included. These evaluations used
economic models that compared the costs of the distributed generation technologies to the range of usual and customary
costs of providing utility service. The percentage of new load for which distributed generation is more cost-effective
than the utility approach represents the market potential.
Second, total air emissions were calculated for the years 2002 and 2010 given the estimated market penetration
levels found for distributed generation, and compared to the central-generation-only scenario to estimate
the net emissions from distributed generation. Finally, these results are integrated into an overall assessment
of distributed generation economic market potential and total emissions impacts on a statewide basis, compared
to the existing central generation mix. Emissions impacts are also estimated for specific individua1 air quality
districts, including the San Francisco Bay Area, Sacramento Metro Area, San Joaquin Valley and South Coast
air districts, among others.
Technologies included microturbines, the Advanced Turbine System (ATS), combustion turbines, Diesel engines, dual-fuel
engines, Otto/spark engines, phosphoric acid fuel cells, and proton exchange membrane (PEM) fuel cells. Renewable
such as wind, solar aI1d biomass were not considered because of their high costs and limited dispatchability,
factors that essentially inhibit significant market penetration. Air emissions of interest included NOx,
S02, CO, CO2, volatile organic compounds (VOC) and particulates.
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