US research predicts increasing use of gas for distributed generation

27 November 2002 – In the next 20 years, global use of natural gas for distributed generation is projected to double, according to the International Energy Outlook 2002: Electricity, published by the US Department of Energy, Energy Information Administration (EIA).

Distributed generation is defined as the production of electricity near the point of use. In the United States, the natural gas share of the electricity market is expected to increase from 15 per cent in 1999 to 32 per cent in 2020, the EIA report said. This trend will involve the increased use of new gas-fuelled reciprocating generator sets in many applications, according to Caterpillar Inc., a major worldwide manufacturer of electric generating systems.

“Distributed generation fuelled by natural gas has moved squarely into the mainstream of energy planning for utilities and end users,” said Michael A. Devine, gas product marketing manager for the Electric Power Group of Caterpillar Inc. “This has happened because political, economic and market forces coalesced to change the dynamics of how electric power is produced, sold and delivered.

“Today’s market requires distributed generation to produce reliable power for relatively long annual hours of operation, at the lowest cost per kilowatt hour and within increasingly strict air-emissions limits. Natural-gas-fuelled reciprocating generator sets represent a proven technology positioned strongly to meet those requirements,” Devine adds.

Increased Demand

Demand for electric power continues to grow with economic expansion and growth in computer and data systems and household appliances, noted Devine. The North American Electric Reliability Council, in its October 2001 report, Reliability Assessment 2001-2010: The Reliability of Bulk Electric Systems in North America, projected that peak power demand would grow by 2 percent per year through 2010. Construction of new power plants and transmission lines is not keeping pace in many areas, Devine said.

“Distributed generation is recognized as an affordable way for power suppliers and power users to add capacity quickly and affordably while also providing stability on distribution systems,” he said

ARES Programme

The U.S Department of Energy’s Advanced Reciprocating Engine Systems (ARES) program involves a consortium of engine manufacturers, including Caterpillar, and component suppliers working to achieve major improvements in natural-gas-fuelled engines. These engines are used to generate electricity in a wide range of distributed power applications, including base load, peak power, and cogeneration.

The 2002 ARES Engine Competitive Market Assessment, prepared by Energy And Environmental Analysis, Inc. of Arlington, Va., surveyed potential users of distributed generation technology to determine their criteria for selecting generating systems. “Economic concerns were by far the highest priority, focusing on short (less than three year) payback and low capital cost,” the report said.

The report noted that among competing technologies, “ARES engines will be one of the most efficient, lowest cost and most compact. Their emissions characteristics will be comparable to other advanced DG technologies as will their ability to apply combined heat and power (CHP).

“With its high efficiency and low capital cost, the ARES engine is among the best in economic ranking of DG technologies for baseload or CHP applications. Because of its high design point efficiency and good off-design efficiency, the ARES engines do very well in load-following applications.”

Devine concluded, “Gas reciprocating generator set technology is already cost-competitive and emissions-compliant in many markets. Advancing technologies will only lead to a larger role for natural gas in the growing distributed generation market.”

Caterpillar has incorporated these industry findings into the development of the new G3500 family of gas-fuelled reciprocating generator sets, scheduled to be introduced in December 2002.

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