Not content to let so much potential go to waste – and realizing that a less-than-friendly attitude toward CHP by utilities would continue to hamper the on-site market – the state agency embarked on an incentive programme that has become a national showpiece for the distributed energy industry and a success story of electricity deregulation in the state. The notorious August 2003 blackout, which shut down all grid power to New York City, underscored the importance of the programme because of the security on-site generation brings to the city’s vulnerable system.

When New York deregulated its electric industry, it set up a special fund to ensure the continuation of public interest programmes, such as assistance for low-income customers and environmental endeavour. Known as New York Energy $mart, the programme also provides funding for energy efficiency and renewable energy. Money for the fund comes from a systems benefit charge (SBC). NYSERDA has used more than $45 million in SBC funds over the last 3 years to help CHP projects get off the ground. So far, it has spurred construction or approval of 90 projects, totalling 100 MW.

DG UNIQUE TO NEW YORK

When it comes to CHP, NYSERDA typically offers funds for three types of programme – feasibility studies, product development and demonstration projects – and prefers projects that pay at least 50% of the expense. A hallmark of the programme, say industry observers, is that it customizes requirements to the state’s particular needs. Proposals attract the agency’s attention if they develop and commercialize technology manufactured in New York, or offer systems that can be replicated throughout the state. NYSERDA also seeks commercially under-utilized CHP or innovations in the generation, distribution, recovery and use of energy.


Sheraton New York Hotel & Towers will be the first hotel in Manhattan to power up with fuel cell technology under NYSERDA funding
(FuelCell Energy)

The state agency draws applications from a range of technologies, including solar, fuel cell, biofuel and back-pressure steam projects. For example, eight dairy farm projects won funding to use anaerobic digesters to create biogas from manure. The agency has approved money for municipal wastewater treatment plants that run fuel cells with digester gas, and a lumber mill that uses a back-pressure steam turbine to produce electricity from scrap wood. The project size averages about 1 MW.

‘The funding support of NYSERDA encourages them to challenge themselves to find other ways to use the heat that comes off the generators in a beneficial manner,’ said Dana Levy, NYSERDA’s Senior Project Manager. ‘It is relatively easy for folks to install a generator. The challenge is to incorporate the heat recovery in a way that improves the economics of the project.’

– face up to summer power shortages



At least two Chinese cities face electricity shortages this summer as currently installed generation capacity struggles to meet peak demands. The predicted shortages highlight the potential for new onsite generating capacity to make a contribution to China’s energy supply portfolio.

Beijing’s Municipal Development and Reform Commission is reported to have set charges for the use of electricity in the city at peak hours at 0.94 Yuan (US$0.11) this summer, more than quadruple the charges in low-use periods. The new peakhour price, the first of its kind in China, was set to alleviate the capital’s imminent pressure on the power supply.

The Commission has also decided to interrupt power supplies to industrial users periodically so that no important construction programmes related to the 2008 Olympic Games will be blacked out. Meanwhile, the Commission called on governmental institutions and citizens to be more aware of power shortage and save as much electricity as possible.

Officials are reported to predict that the peak electricity demand in Beijing will be 10.7 GW this year, up 13% over the same period of last year, and a power shortfall of at least 1 GW is predicted. Although Beijing has planned to invest more than 2 billion Yuan (about $240 million) to renovate its power supply networks and co-ordinate with power grids in other parts of China this year, the country’s aggregated power shortfall is predicted to be 20 GW.

Meanwhile, authorities in Shanghai are reported to be preparing for power shortages this summer by ordering more than 3000 companies to close for a week. The state-run Xinhua news agency has reported that Shanghai will have an electricity shortfall of 2000 MW, based on total demand of 19,000 MW during the summer months when electricity consumption is at its peak.

A spokesman from the Shanghai Economic Commission has said an estimated 3000 companies would be required to shut down for one week each in staggered stages in July and August this year. Municipal authorities are to order an additional 400–500 industrial companies to reduce peak hour power use for a three month period by switching to off peak shift production or temporary closures. City government officials are suggesting that companies use the down time to carry out maintenance work.