California issues roadmap on solar PV and other distributed generation technologies
SACRAMENTO, California, US, April 25, 2007. Distributed generation is a “major departure” from conventional energy and policy issues “need to be considered in a comprehensive, integrated approach,” according to a report from the California Energy Commission.
“DG and cogeneration are seen by many as potentially attractive energy resource options for California, both in the near-term and long-term,” says the staff report, ‘Distributed Generation & Cogeneration Policy Roadmap for California.’ “They can provide added capacity to meet peak demand, provide additional energy supply, and can be integrated into the current electrical infrastructure to reduce congestion.”
“However, DG and cogeneration are, in many regards, major departures from how energy is procured, generated, and delivered to end-use customers; therefore, policy issues need to be considered in a comprehensive, integrated approach,” it notes. The report defines a 2020 policy vision for DG and cogeneration and defines megawatt penetration targets for different DG technologies.
The report also describes long-term strategies, pathways and milestones to take California from the current situation to attain the 2020 vision and the DG and cogeneration capacity targets.
The report defines DG as electricity production that is “on-site or close to a load centre and is interconnected to the utility distribution system” but, in practical terms, that limits the definition of DG to less than 20 MW since larger systems would be interconnected at sub-transmission or transmission system voltages. The definition includes solar photovoltaics, small wind, small biomass, small CHP, and small combined cooling, heat and power systems, and excludes hydroelectricity, geothermal and non-CHP landfill gas and municipal solid waste.
The Roadmap “will provide a long-term perspective for DG and cogeneration policy” and includes a vision and a pathway with detailed actions and milestones for implementing policies. It will require “some new energy policy initiatives” and presents “potential policies to consider and the timing necessary to implement those policies for California to attain the 2020 DG and Cogeneration Vision.”
“The DG industry is still a nascent industry that survives despite some difficult market conditions,” it notes. “There are numerous institutional, industry and market barriers that have impeded the growth and adoption of DG to date. Due to low penetration rates, DG installations do not have a large impact on, nor is it integrated with, the state’s electric and natural gas infrastructures.”
Although DG’s potential is recognised, it is not currently a significant energy resource, and current DG penetration is 2.5% of total peak demand in the state. “As a result, many projects are highly customised and rely on incentives” and the industry is fragmented with many small developers installing PV and natural gas engines provided by large equipment suppliers.
The majority of DG installations are photovoltaic (by number of installations) and natural gas-fired CHP systems (by capacity). Most DG customers are installing these systems for green power or to reduce energy costs, but many customers are placing value on other aspects such as CO2 reductions and reliability.
“It will require a mix of DG technologies and cogeneration to reach the vision’s penetration target of 26% by 2020,” because technologies penetrate the market at different rates depending on the maturity of the technology and the market. Large cogeneration, which uses mature technology and has relatively high market saturation, will grow at a slower rate than photovoltaics, which is still a growing technology that is “not likely to reach its maximum penetration rate until after 2020.”
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