Making Green Power Greener
7.1.09 |
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Mark
Rudd, Founder, Rudd Asset Management |
Recently there have been a number of excellent articles written on using
biomass for the generation of green electric power. Today there are a number
of alternatives to wind and solar available. In many cases, the additional
benefits of biomass fuels can be much more valuable to an electric utility
and independent system operator. This article explores some additional
benefits that can make your project a winner.
Regardless of what green power source is used, it is only useful to the
electric industry when it replaces traditional electric generation without
sacrificing the system's reliability and flexibility. A good electrical
generation project must start by looking at the desired end product. Once
that is known, we can look for new innovative green sources. But, we cannot
lose sight of the goal, to provide the nation with a new, greener source of
electrical energy.
Today's electric grid is comprised of various key resources. Base load is
often best provided by nuclear, hydro, or high-efficiency coal plants. These
plants provide the bulk of the electric power we use every day. But, the
system would not last long if we stopped there.
Electric consumption patterns vary. Each area has its own distinct load
pattern. They all vary. Some vary much more than others. So, each system is
unique.
Each electrical system also needs an intermediate generation source. This
source is cycled daily or in some other pattern to add load when needed and
to reduce generation when demand decreases.
Finally, there are the peaking load needs. From hour to hour, sometimes
minute to minute, the load can change. Peaking units need to be able to
satisfy that variability. Whether supplied by natural gas or oil, generation
units are needed to supply that last remaining megawatt of power when
needed.
Value of a green power generation project can be enhanced by keeping this
basic system outline in mind. Often, it does little good to generate
additional power to the electric grid in the middle of the night and early
morning hours or on weekends. Until we develop ways to store electrical
energy on the grid economically, we need to produce power when needed.
Biomass generation plants can meet the electrical system needs well. Many
plant designs can be fully dispatchable. Unlike wind and solar, these units
can be nearly as responsive to load swings as natural gas peaking units.
Reciprocating engine designs can come on line and be at full load in
minutes. The electrical system needs must be met and successful plants will
be designed to meet them.
Review of a typical Independent System Operator (ISO) web site defines
ancillary services as: ancillary services support the reliable operation of
the transmission system as it moves electricity from generating sources to
retail customers. The ability to provide extra value to the ISO can mean
more revenue for the project.
This ISO defines two valuable ancillary services as Synchronized Reserve and
Regulation. It defines them as:
* Synchronized Reserve supplies electricity if the grid has an unexpected
need for more power on short notice.
* Regulation is a service that corrects for short-term changes in
electricity use that might affect the stability of the power system.
Building a project with reciprocating engines may require providing an
additional engine or two to make sure you can generate contract committed
power and allow for maintenance or repair. These "extra" engines might be
able to qualify for "Synchronized Reserve" at times. Similarly, the ability
to do load follow could also allow a project to collect additional revenue
for "Regulation."
These are additional revenue streams that wind and solar may not be able to
provide. Biomass plants can, and should. If biomass is going to grow in the
electric power industry, it needs to meet the market need.
But, meeting market needs does not just happen. It takes a carefully
developed business plan. A project's value does not stop with its technical
engineering. It can be greatly enhanced with "financial engineering."
An additional advantage that biomass plants have is their ability to go
where the need for power is the highest. Perhaps projects can learn from
that folklore celebrity, the infamous Willie Sutton, and his purported
famous quote.
"As Willie Sutton the bank robber said when asked why he robbed banks,
'because that's where the money is'."
Though biomass plants need not resort to crime, plant developers can take a
page out of "Slick" Willie's book. The ability to develop biomass plants
that use locally indigenous fuels gives them the ability to go to where the
need for green power is highest.
The success of a green power project can be greatly improved by a business
plan that builds in layers of extra value. The ability to design a plant
using proven electric generation designs and equipment, greatly improves
your odds for success. Biomass development is sometimes cutting edge
technology. But, it does not all have to be.
Standardized and proven equipment can reduce performance risk, reduce spare
parts investment, improve operator and maintenance familiarization, etc. In
short, a good green power plant can apply some of the same strategies that
made Southwest Airlines such a high flyer (pun intended).
In conclusion, profits are not made by just choosing to generate green. Like
any other electric power plant, green power projects needs to identify what
the product is going to be, what size, where, when, and how. Then, you work
backwards to see what your fuel options are.
Today, there are amazing opportunities in the green power market. The demand
is growing quickly. Learn to make your project one of the best. Make your
green project even greener!
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