Blackouts heighten argument for distributed generation

Aug. 18, 2003 -- In light of the recent blackouts that hit several U.S. states on Thursday, the country must take a closer, more serious look at distributed-generation systems, commented Dennis A. Orwig, CEO of Encorp Inc.

"Onsite power systems, often referred to as distributed generation, offer a more dependable, secure, cost-effective and environmentally sustainable way to produce power," Orwig said. "The technology is proven and ready for energy consumers."

Distributed generation allows companies to generate their own power near the point of consumption. Commercial and industrial users with on-site energy systems do not have total reliance on the utility grid and far-away power plants. This can result in a more reliable power supply and, in most instances, reduced energy costs.

Distributed generation systems on the East and West Coasts - where energy costs typically are higher than the national average -- have demonstrated simple project paybacks within 2-5 years, according to Encorp data.

An on-site power system for these enterprises will cost, on average, between $1 million and $4 million, which often can be financed over a period of 7-15 years. Typically, the company's annual energy bill will drop significantly after the on-site system is installed, and the company has round-the-clock power reliability.

"We have come full circle from Thomas Edison's Pearl Street Power Station -- which essentially was a form of distributed generation when it began providing power to 85 customers in Lower Manhattan Sept. 4, 1882 -- to central generating plants...and now it is time to move back to distributed generation," Orwig said.

With the North American Electric Reliability Council estimating that peak power demand is expected to grow 2 percent each year through 2010, it might be a good idea to consider alternatives to upgrading the infrastructure. To meet this record demand for energy, the Bush Administration estimates the U.S. needs up to 1,900 new power plants in the next 20 years to meet demand (60-90 each year). This likely will not happen, Orwig said.

Centralized electric power plants most likely will remain the major source of the nation's electric power supply; however, localized distributed generation can be put in place around the country to prevent outages like Thursday's East Coast blackout.

Encorp is an energy technology company in Windsor, Colo., known for its Virtual Power Plant concept, which links together multiple on-site power generators to create reliable power. The company develops, manufactures and markets integrated services, software and hardware technology solutions for the communication, control and networking of distributed energy.

Sponsored by FLSmidth

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