As more businesses take themselves off the power grid by creating their own electricity, Connecticut ratepayers will get their energy from cheaper, cleaner and more reliable sources, state officials say.
Distributed generation is becoming more popular in the state and throughout New England, especially among businesses foreseeing the financial and environmental benefits of decreasing their reliance on the electric utilities.
As a result, the regional grid will be comprised of fewer large commercial ratepayers and more small business and residential ratepayers. The long-term effect will dampen rates, said Phil Dukes, spokesman for the Connecticut Department of Public Utility Control.
A business generating its own power decreases the overall need for electricity on the New England power system. When the peak load drops, the regional system needs less electricity and eliminates its use of the most expensive power plants. These peaker plants tend to run inefficiently and burn less environmentally-friendly fuel, Dukes said.
“There is certainly more upside than downside to distributed generation,” Dukes said. “That is why the state has invested so heavily in it.”
In 2008, the DPUC began offering financial assistance to businesses setting up distributed generation. Depending on the size of the project, Connecticut will provide millions to develop onsite generation at business facilities. Even more is available through the state Clean Energy Fund if a company builds renewable power.
“The program has been well subscribed by companies looking into DG,” Dukes said.
Despite the large increase in distributed generation interest, the electrical grid never will be comprised entirely of residential ratepayers. Business never unplug completely from the grid.
Hartford’s United Technologies Corp. started installing distributed generation at its Connecticut facilities in 1995. The company will have maxed out its use of co-generation systems once the final installation is completed this year. Any more would be wasteful with a long payback period, said Sean West, UTC environmental health and safety manager.
At its max, UTC will generate 67 percent of its Connecticut power needs onsite, meaning the company still relies on the grid for one-third of its electricity.
“We are buying less and less electricity from the grid … but I don’t see us installing more cogeneration systems in Connecticut,” West said.
Even with major power users such as UTC moving toward distribution generation, regional grid manager ISO New England predicts the need for electricity in the region will increase 8 percent over the next five years.
Distributed generation, energy efficiency initiatives and the use of demand response resources are all meant to decrease the amount of power needed from the grid; but they merely slow the growth in the need for electricity in New England.
Rather than installing more large power plants throughout New England to meet rising demand, Danbury’s FuelCell Energy Inc. foresees a future where distributed generation meets the bulk of the power need. FuelCell Energy makes onsite power plants for businesses used in distributed generation.
Several small fuel cells placed throughout an urban area can provide a similar amount of electricity to one large power plant servicing the area, without the large footprint or the environmental impact.
“Depending on how the technology develops, there could be all sorts of benefits to distributed generation,” Dukes said.
