Real options valuation of US federal renewable energy research,development, demonstration,and deployment

Benefits analysis of US Federal government research, development, demonstration, and deployment (RD³) programmes for renewable energy (RE) technology improvement typically employs a deterministic forecast of the cost and performance of renewable and non-renewable fuels. The benefits estimate for the programme derives from the difference between two forecasts, with and without the RD³ programme in place. Three deficiencies of this approach are that it ignores: (1) uncertainty in the cost of non-renewable energy (NRE); (2) the possibility of adjustment to the RD³ effort commensurate with the evolving state of the world; and (3) the underlying technical risk associated with RD³. In this paper, an intuitive approach to determining the option value of RE RD³ is developed. This approach seeks to tackle the first two deficiencies noted above by providing an estimate via a compound real option of an RE RD³ programme in a future with uncertain NRE costs. A binomial lattice reveals the economic intuition underlying the decision-making process, while a numerical example illustrates the option components embedded in a simplified representation of current US Federal RE RD³.     

End-use efficiency to lower carbon emissions

In this paper, the author describes how energy efficiency performance standards and labels promise enormous carbon emissions savings potential that can help move economies towards more sustainable energy use and assist in the attaining Kyoto protocol targets     

A larger role for microgrids

In this paper the technical constraints imposed by the growing needs of distributed generation, DER, and demanding PQR requirements, the microgrid concept is evolving toward a potentially versatile solution. The growing body of technical publications includes analytical modeling that defines the theoretical basis; computer simulation studies that verify operation and performance: and laboratory-scale, community-scale, and utility-scale demonstrations and pilot projects that add field experience to theory and simulation. Similarly, vigorous efforts are underway to expand microgrid economic and regulatory analysis capability, but challenges remain. At the policy level, significant changes will be needed to facilitate capture of the benefits of microgrids.     

Optimal Technology Selection and Operation of Commercial-Building Microgrids

The deployment of small ( ${≪}1hbox{--}2$ MW) clusters of generators, heat and electrical storage, efficiency investments, and combined heat and power (CHP) applications (particularly involving heat-activated cooling) in commercial buildings promises significant benefits but poses many technical and financial challenges, both in system choice and its operation; if successful, such systems may be precursors to widespread microgrid deployment. The presented optimization approach to choosing such systems and their operating schedules uses Berkeley Lab's Distributed Energy Resources Customer Adoption Model (DER-CAM), extended to incorporate electrical and thermal storage options. DER-CAM chooses annual energy bill minimizing systems in a fully technology-neutral manner. An illustrative example for a hypothetical San Francisco hotel is reported. The chosen system includes one large reciprocating engine and an absorption chiller providing an estimated 11% cost savings and 8% carbon emission reductions under idealized circumstances.      

美国分布式综合能源微网系统发展

阐述了综合能源微网的定义,首先梳理了美国各级政府以及电力公司和电力市场对于推动微网建设的政策和示范工程,介绍了美国在近十多年来开发分布式综合能源微网的经验。进而对综合能源微网的控制方法,及美国在此期间开发的模拟仿真软件进行了介绍和对比。最后介绍了美国综合能源微网建设和运营的主要商业模式。旨在通过介绍美国综合能源微网的发展,为中国综合能源系统和能源互联网示范项目建设提供参考。     

Localized Aggregation of Diverse Energy Sources for Rural Electrification Using Microgrids

Extension of electrical service to large rural populations in developing nations is a key requirement to realize human development goals set forth by international agencies. This paper presents the case for distributed generation in the form of microgrids, which should be the preferred path towards rural electrification in developing communities and a vital complement to expensive centralized grid expansion. The technical features of frequency and voltage control for distributed generation devices in a microgrid are discussed along with a presentation of their stability attributes. Computer simulation results and experimental results from a laboratory scale microgrid are also presented.     

Distributed energy resources market diffusion model

Distributed energy resources (DER) technologies, such as gas-fired reciprocating engines and microturbines, can be economically beneficial in meeting commercial-sector energy loads. Even with a lower electric-only efficiency than traditional central stations, combined heat and power (CHP) applications can increase overall system energy efficiency. From a policy perspective, it is useful to have good estimates of penetration rates of DER under different economic and regulatory scenarios. We model the diffusion of DER in the US commercial building sector under various technical research and technology outreach scenarios. Technology market diffusion is assumed to depend on the system's economic attractiveness and the developer's knowledge about the technology. To account for regional differences in energy markets and climates, as well as the economic potential for different building types, optimal DER systems are found for several building types and regions. Technology diffusion is predicted via a baseline and a program scenario, in which more research improves DER performance. The results depict a large and diverse market where the West region and office building may play a key role in DER adoption. With the market in an early stage, technology research and outreach programs may shift building energy consumption to a more efficient alternative.     

Distributed Generation with Heat Recovery and Storage

Electricity produced by distributed energy resources (DER) located close to end-use loads has the potential to meet consumer requirements more efficiently than the existing centralized grid. Installation of DER allows consumers to circumvent the costs associated with transmission congestion and other nonenergy costs of electricity delivery and potentially to take advantage of market opportunities to purchase energy when attractive. On-site, single-cycle thermal power generation is typically less efficient than central station generation, but by avoiding nonfuel costs of grid power and by utilizing combined heat and power applications, i.e., recovering heat from small-scale on-site thermal generation to displace fuel purchases, DER can become attractive to a strictly cost-minimizing consumer. In previous efforts, the decisions facing typical commercial consumers have been addressed using a mixed-integer linear program, the DER customer adoption model (DER-CAM). Given the site’s energy loads, utility tariff structure, and information (both technical and financial) on candidate DER technologies, DER-CAM minimizes the overall energy cost for a test year by selecting the units to install and determining their hourly operating schedules. In this paper, the capabilities of DER-CAM are enhanced by the inclusion of the option to store recovered low-grade heat. By being able to keep an inventory of heat for use in subsequent periods, sites are able to lower costs even further by reducing lucrative peak-shaving generation, while relying on storage to meet heat loads. This and other effects of storage are demonstrated by analysis of five typical commercial buildings in San Francisco, California, in the United States, and an estimate of the cost per unit capacity of heat storage is calculated.     

Effects of Carbon Tax on Microgrid Combined Heat and Power Adoption

This paper describes the economically optimal adoption and operation of distributed energy resources (DER) by a hypothetical California microgrid (μGrid) consisting of a group of commercial buildings over an historical test year, 1999. The optimization is conducted using a customer adoption model developed at Berkeley Lab and implemented in the General Algebraic Modeling System. A μGrid is a semiautonomous grouping of electricity and heat loads interconnected with the existing utility grid (macrogrid) but able to island from it. The μGrid minimizes the cost of meeting its energy requirements (consisting of both electricity and heat loads) by optimizing the installation and operation of DER technologies while purchasing residual energy from the local combined natural gas and electricity utility. The available DER technologies are small-scale generators (<500?kW), such as reciprocating engines, microturbines, and fuel cells, with or without combined heat and power (CHP) equipment, such as water and space heating and/or absorption cooling. By introducing a tax on carbon emissions, it is shown that if the μGrid is allowed to install CHP-enabled DER technologies, its carbon emissions are mitigated more than without CHP, demonstrating the potential benefits of small-scale CHP technology for climate change mitigation. Reciprocating engines with heat recovery and/or absorption cooling tend to be attractive technologies for the mild southern California climate, but the carbon mitigation tends to be modest compared to purchasing utility electricity because of the predominance of relatively clean central station generation in California.