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Opportunities for Distributed Generation in New Zealand

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Opportunities for Distributed Generation in New Zealand CENTRE FOR ADVANCED ENGINEERING • CHRISTCHURCH • NEW ZEALAND Opportunities for Distributed Generation in New Zealand Opportunities for Distributed Generation in New Zealand This Report is confidential to the DG Sponsor Group and is not to be copied or transmitted to third parties in any form without the express permission of the Centre for Advanced Engineering centre for advanced engineering • christchurch • new zealand Opportunities for Distributed Generation in New Zealand Project Report: March 2003 Principle Project Consultants: PB Associates Ltd Principle Project Advisor: Brian Cox, East Harbour Management Services CAE Project Co-ordinator: Ian Bywater Project Sponsors T RANSPOWER Cover graphic courtesy of IRL The “207 Benefits of Distributed Resources” on pp 335-346 reproduced courtesy of the Rocky Mountain Institute All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, transmitted, or otherwise disseminated, in any form or by any means, except for the purposes of research or private study, criticism or review, without the prior permission of the Centre for Advanced Engineering. © 2003 Centre for Advanced Engineering University of Canterbury Private Bag 4800 Christchurch New Zealand Disclaimer It will be noted that the authorship of this document has been attributed to the many individuals and organisations who have been involved in its production. While all sections have been subject to review and final editing, the opinions expressed remain those of the authors responsible and do not necessarily reflect the views of the Centre for Advanced Engineering. Acknowledgements Sponsors Denis Amoor and Steve Voss, from Alstom Ewan Gebbie, EECA Ken Mitchell, Eastland Network Grant Smith, Meridian Energy Steve Tritt, Mighty River Power Roger Sutton, Orion Network Derek Todd, Richard Gibbons, Chris Doak (WEL) and Pamela Storey (WEL) for the STP Group Richrad Fairbairn, United Networks Jonathan Kay, Vector Jim Pearce, Networks South Bob Thomson, Bruce Smith, Alison Little, from Transpower Informants and advisors Orion case study: Angus MacAlpine and Steven Hirsch, Orion Network Windflow case study: Geoff Henderson and Wernher Roding, Windflow Technology Opuha case study: Jim Pearce and Greg Skelton, Networks South; Tom Henderson, farmer and protagonist; Justin Riley, Mackenzie District Council. Stoneyhurst case study: Peter and Fiona Douglas-Clifford Kinleith Cogeneration case study: Lyndon Haugh, Russell Longuet, CHH BP Service Station case study: Barry Blackett, BP Oil New Zealand Consultants Brian Cox, from East Harbour Management Services Steve Wightman, Nick Barneveld, Richard Gibbons, Geoff Brown, Abdul Khan, David Willis, Bernd Pummer, Nigel McGimpsey, from Parsons Brinckerhoff Associates Bryan Leyland, Simon Prince, Rhys McDougall, from Sinclair Knight Merz Peter Hall, Per S. Nielson, from Forest Research Institute Steve Goldthorpe Anne McLean, Empower Consulants John Duncan Brian Tolley Iain Sanders, Alister Gardiner, IRL i ii Contents Acknowledgements ........................................................................................... i 1 Preface ........................................................................................................... 1 2 The Evolutionary Path of the Electricity Industry ..................................... 3 Historical Background ................................................................................................ 3 Industry Reform ......................................................................................................... 3 What is Distributed Generation? ................................................................................ 4 The wider Aspects of Energy Supply, Natural Resources and Environmental Impact ......................................................................................... 6 Overseas Experience with Distributed Generation .................................................... 7 Market Drivers for Distributed Generation Use ........................................................ 10 3 Developing a Framework Analysis ........................................................... 13 Objectives ................................................................................................................ 13 Characterisation and Contextualisation of Distributed Generation Projects ............ 13 Analytical Options .................................................................................................... 14 Variables .................................................................................................................. 15 4 Fuel Supplies .............................................................................................. 17 Executive Summary ................................................................................................. 17 Introduction .............................................................................................................. 17 Desirable Characteristics of Fuels for Distributed Electricity Generation ................ 18 Natural Gas .............................................................................................................. 18 Coal ........................................................................................................................ 40 Petroleum Products ................................................................................................. 55 Biomass ................................................................................................................... 65 Wind ........................................................................................................................ 76 Landfill Gas .............................................................................................................. 80 Geothermal Energy .................................................................................................. 81 References .............................................................................................................. 89 5 Network and Regulatory Issues ................................................................ 93 Executive Summary ................................................................................................. 93 Introduction .............................................................................................................. 94 Technical Issues ...................................................................................................... 95 Overseas Research ................................................................................................. 99 Distributed Generation in the New Zealand Context ............................................. 103 Dealing with Network Issues: a Commercial Perspective ...................................... 109 Model Arrangements for Pricing Electricity Distribution Services .......................... 112 iii 6 Case Studies ............................................................................................. 115 6.1 Opuha Hydro/Irrigation ................................................................................... 117 6.2 Orion Network ................................................................................................. 135 6.3 Stoneyhurst Remote Homestead .................................................................... 159 6.4 Windflow Wind Turbine ................................................................................... 167 6.5 Gisborne and East Cape Networks ................................................................ 193 6.6 Kinleith Cogeneration ..................................................................................... 205 6.7 BP Service Stations ........................................................................................ 225 6.8 Kumeroa Rural Farming Community .............................................................. 237 7 Social and Environmental Externalities ................................................. 259 Introduction ............................................................................................................ 259 Methodology .......................................................................................................... 262 The Case Studies .................................................................................................. 263 — Opuha Hydro ............................................................................................................. 263 — Orion Network ........................................................................................................... 268 — Stoneyhurst Station ................................................................................................... 270 — Wind Farm, Gebbies Pass ........................................................................................ 273 — Eastland Networks .................................................................................................... 276 — Kinleith Cogeneration Facility .................................................................................... 279 — BP Solar .................................................................................................................... 282 The Greenhouse Gas Implications of DG .............................................................. 284 Relevance of Environmental and Social Issues on the National Uptake of Distributed Generation .........................................................................
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