MICROPOWER at the CROSSROADS Public Health and the Future of Distributed Generation

MICROPOWER AT THE CROSSROADS Public Health and the Future of Distributed Generation

New Jersey PIRG Law and Policy Center MICROPOWER AT THE CROSSROADS Public Health and the Future of Distributed Generation

Brad Heavner Emily Rusch New Jersey PIRG Law and Policy Center ACKNOWLEDGMENTS

The NJPIRG Law and Policy Center gratefully acknowledges Nathanael Greene of the Natural Resources Defense Council and Todd Campbell of the Coalition for Clean Air for providing repeated assistance in the development and drafting of this report. Thanks to Mara Thermos, Ellen Montgomery, and Marianne Zugel for research assistance. Thanks also to Michael Perri, Katie McCormack, and Rob Sargent for editorial guidance. Thanks to Harriet Eckstein for layout design.

Cover photographs courtesy of (clockwise from upper left): Paul Gipe, High Frequency Active Auroral Research, National Renewable Energy Laboratory, and Capstone Microturbines.

This report was made possible by the generous support of the Pew Charitable Trusts under their National Distributed Generation Emissions Campaign.

The authors alone bear responsibility for any factual errors. The recommendations are those of the NJPIRG Law and Policy Center. The views expressed in this report are those of the author and do not necessarily reflect the views of our funders.

The NJPIRG Law and Policy Center is a 501(c)(3) organization working on environmental protection, consumer rights, and good government in New Jersey.

For additional copies of this report, send $10 (including shipping) to:

NJPIRG 11 N. Willow St. Trenton, NJ 08608

For more information about the NJPIRG Law and Policy Center, please call 609-394-8155 or visit the NJPIRG web site at www.njpirg.org. TABLE OF CONTENTS

Executive Summary 5

What Is Micropower? 7

The Cleanest Micropower Technologies 11 Solar Photovoltaics 11 Wind 13 Fuel Cells 14 Combined Heat and Power 16

The Dirtiest Micropower Technologies 19 Diesel Generators 19 Other Fossil Fuel Internal Combustion Engines 23 Improving Engines for Emergency and Portable Use 24

New Micropower Technologies Alternative Fuel Reciprocating Engines 26 Turbines 26 Microturbines 26 Stirling Engines 27

Policy Recommendations 29

Appendix A: Alternative Fuels 31

Appendix B: Glossary 32

Notes 34

EXECUTIVE SUMMARY

he debate over New Jersey’s energy The DEP should set strict standards future has focused increased atten- that fully protect human health and the Ttion on micropower, the genera- environment, and should phase them in tion of electrical energy by homeowners over time to allow manufacturers to pre- and businesses near the place it is used as pare for change. New standards should an alternative or supplement to the state- encourage clean technologies such as so- wide power grid. lar and wind, allow developing technolo- Micropower, also known as distributed gies such as fuel cells and microturbines generation (DG), is a growing sector of to gradually decrease emissions, and pro- the energy market that holds great prom- hibit or dramatically reduce use of the ise for locally controlled power genera- most polluting technologies. Due to se- tion.1 Having facilities widely dispersed vere environmental and public health increases reliability, and some of these impacts from the growing use of diesel technologies are among the most envi- generators, emissions standards must be ronmentally friendly electricity generat- set at levels that limit diesel applications ing technologies ever invented. But to emergency situations and only when continued reliance on other types of generators are operated in conjunction micropower, technologies that are highly with emission-control measures. polluting, poses a threat to public health. Micropower is at a crossroads. New Currently, micropower is not subject standards should promote clean tech- to the same air pollution controls as cen- nologies, not allow dirty technologies to tral power plants, and the most preva- proliferate and pollute the air. And stan- lent form of micropower currently in dards need to establish uniform treatment operation is also the most polluting form of the various distributed generation – diesel engines. These generators have technologies and applications. been installed outside many public build- We have produced this report to point ings and advertised for home use as a so- the way to a clear future direction. As we lution to the “energy crisis.” work to promote the highest possible As micropower has grown, policy mak- level of efficiency in our use of energy, ers have come to realize that limits on we must simultaneously support sustain- emissions from micropower facilities are able, reliable, versatile technologies that needed to avoid the cumulative effects of can bring efficient energy generation many small but very dirty generators. right to the source of use while reducing And states increasingly recognize that harmful air pollution. they can increase energy generation flexibility and realize major environmental Policy Recommendations improvements by encouraging the cleanest forms of micropower. To ensure that public health is protected The New Jersey Department of En- and new technologies that reduce pollu- vironmental Protection (DEP) is plan- tion are encouraged, distributed genera- ning to set air pollution standards for tion policy should be based on the micropower technologies. They are seek- following principles: ing to establish a technology-neutral o Distributed generation must be as standard for all applications that works clean as or cleaner than the cleanest to reduce environmental emissions and central power plant technology protect public health. currently in widespread use.

Micropower at the Crossroads 5 o State rules and incentives must for diesel generators used for emer- promote the cleanest energy industry gency back-up power supply. for the future of New Jersey. • Require that all new residential and o Regulations should be as simple as commercial construction be “solar- possible so manufacturers can ready” with the basic infrastructure anticipate changes and comply with to ease future installation of photo- new technology requirements. voltaic panels. • Require ultra low-sulfur diesel for all State agencies can help move micro- diesel engines. power in the right direction. To protect the health of the people of New Jersey Provide funding for clean micropower: and the air quality of the state while help- ing to assure reliable local power genera- • Require formal consideration of tion, we recommend the following clean micropower as a potential least immediate policy actions: cost alternative to transmission and distribution upgrades and a means of o Set stringent emissions standards for avoiding the cost of future environ- all micropower units operated in mental regulation. New Jersey. Use output-based standards to encourage greater • Expand funding for clean micro- efficiency of performance. power technology advancement. o Conduct a comprehensive inventory • Expand the availability of financial of existing micropower and other incentives, including financing on-site generation. assistance, buy-down programs, tax o Streamline the permitting process credits, and grants, for the installa- for clean units that meet or beat new, tion of clean micropower. stringent standards. • Provide incentives for developers to o Ensure aggressive enforcement of include clean micropower at new standards and establish significant residential or commercial construction penalties for violation. projects. • Provide incentives for the trade-in In addition, many other specific policies and upgrade of polluting micropower could advance clean micropower while installations. curbing the use of dirty micropower. We recommend that state agencies: Clear hurdles to the implementation of clean micropower: Establish standards and rules for micropower operation: • Streamline the permitting and utility interconnection process for clean • Require that all micropower units micropower installations. operated in New Jersey receive certification or permits as a condi- • Develop incentive tariffs and reduced tion for being connected to the standby and exit fees for clean electric grid. micropower installations.

• Require that transmission grid The adoption of these recommendations operators draw on clean, efficient will promote a vital distributed generation micropower before similarly priced system that reduces the negative public dirty generation facilities. health impacts associated with diesel and • Require emissions control measures other dirty micropower technologies.

6 Micropower at the Crossroads WHAT IS MICROPOWER?

or more than a century the standard searching for greater control over power formula for generating and distrib- costs, and seeking alternatives to power Futing electricity has been simple. sources that degrade the environment and Build a huge power plant and run power undermine public health. lines to population centers where indus- The combination of advancing tech- try and people need the electricity. Con- nology and widespread concerns about nect the individual home or business to large central power plants has made lo- the electrical grid and power up. calized power generation an idea whose Primarily using fossil fuels, these fa- time has come. Instead of concentrating cilities have grown in scale and quantity power sources at large plants, distributed as our demand for electrical power has generation systems locate power sources increased. Many of these giant power closer to the consumer - in an office plants have been major polluters as they building, a neighborhood, a factory, or a have worked to provide a cheap, reliable home.2 electricity source for consumers. Despite For many, small power generation advances in technology, these large cen- units located near the point of use have tral power plants continue to dominate been a safety and reliability measure to our energy system in size, environmen- supply back-up power during blackouts. tal consequences, and convenience. Others have suggested that in light of The dominance of this model has fa- escalating energy costs during peak de- cilitated the proliferation of electrically mand periods, micropower can be used powered devices to the point where most as a cheaper alternative power source or of us never think about how power is gen- a source of profit by selling the distrib- erated. We just plug our computer into uted power into the grid. the wall outlet and get to work. In grid-congested areas where trans- In some cases it has been advantageous mission line upgrades would otherwise be to develop localized power generating ca- needed, micropower has the potential to pacity. Geographically isolated facilities significantly reduce costs for power. and some large factories have been using Transmission and distribution costs can local power generation for years, fre- reach $1.50 for every $1.00 spent on elec- quently deploying many of the technolo- tricity generation.3 In addition, society gies that cause environmental harm. But can benefit through enhanced reliability it was a rare occurrence when an indi- and decreased need for infrastructure. vidual would need or want independent Estimates of the monetary value of these local power generation for a home or small business. Table 1: The Economic Benefits Deregulation of the electric power of Decentralized Power (¢/kWh)3 production industry and the recent tur- moil in energy markets has started to Benefit Savings change all that. With growing concerns Substation deferral 0.16-0.6 about the reliability of traditional power Transmission system losses 0.2-0.3 sources due to increases in power plant Transmission wheeling 0.28-0.71 down time, more and more consumers Distribution benefits 0.067-0.17 are questioning the conventional model Enhanced reliability 1.0 of central power plants. They are look- Total 1.7-2.8 ing for more reliable energy sources,

Micropower at the Crossroads 7 benefits range as high as 2.8 ¢/kWh. This As the DEP considers regulations ad- is a substantial savings from current gen- dressing distributed generation technolo- erating and distribution costs, which are gies, we have the opportunity to promote now typically 4-9 ¢/kWh. cost-effective renewable energy sources Growing interest in local control of that are significantly less harmful to our electrical power generation is both an op- health. But if the growing demand for portunity for and a threat to New Jersey micropower results in the proliferation residents. The central power plant sys- of polluting technologies, we face the tem has evolved some cleaner technolo- prospect of higher levels of localized gies, but older, dirtier micropower emissions that place our respiratory technologies are still predominant. We health at significant risk. cannot allow the proliferation of local- What follows is an overview of the ized power generation to undermine pol- pollution and public health impacts of lution standards. many of the technologies currently avail- The affordability of meeting stricter able to those interested in the deployment emissions standards was documented in of distributed generation. We have a 2002 study by Energy Nexus Group grouped the various technologies into analyzing the economic feasibility of three categories based on their current complying with proposed new standards environmental performance. New regu- for micropower in California. The study lations should be performance-based, so found that with the amount of technol- that emerging technologies have equal ogy advancement expected under normal opportunity to meet emissions standards market forces, nearly all of the cleanest in the future. technologies will meet the standards in 2003, most of the new technologies will meet the standards in 2007, and all but • Clean Micropower – The cleanest the dirtiest technologies will meet the distributed generation technologies, standards in 2012. The study determined primarily using renewable fuel the cost of adding emissions control sources. These include solar, wind, equipment to fossil fuel-based micro- and fuel cells. These forms of power power to be only about 1 ¢/kWh .5 generation have minimal negative

Figure 1: Emissions from Micropower Technologies6

25 NOx

20 CO

SOx 15

PM10 10

Emissions (lbs/MWh) UHC 5

0 Diesel Natural Gas Natural Gas Microturbine Fuel Cell Solar Wind Engine Engine Engine (lean burn) (rich burn)

8 Micropower at the Crossroads Figure 2: Carbon Dioxide Emissions from Micropower Technologies7

Diesel Natural Gas Natural Gas Microturbine Fuel Cell Solar Wind Engine Engine Engine (lean burn) (rich burn)

public health impacts. In addition, growing public health problems – will be high-efficiency combined heat and perpetuated. power systems can significantly The technology is available to avoid reduce negative impacts. those pitfalls and to promote efficient and increasingly cost-effective micropower • Dirty Micropower – The dirtiest that can benefit the environment, the and best-known technologies, using reliability of the electricity system, and fossil fuel sources. Diesel generation public health. Some of the potential ad- is the most prevalent technology, but vantages of clean micropower include: there are also gasoline and natural gas engines that are excessively • Power doesn’t have to travel long polluting. These forms of power distances over the grid, reducing generation undermine public health energy loss and the need to build and cause disease. new power lines. • New Micropower – Emerging • Wind and solar technologies are technologies have the potential to fueled by renewable energy sources. deliver cleaner power. Options such as alternative fuels and micro- • Generation at point of use allows for turbines hold promise for the future. the utilization of waste heat for other The health impacts of these forms of energy needs. power generation vary. • Local generation can enhance the reliability of the electricity system by On-site power generation in itself is reducing the burden on the grid. no panacea for the problems plaguing the • Fewer large, central-station power energy market. If the rush to distributed plants will be needed as micropower generation is a rush to the most available increases. and least expensive technology, then some of the problems – including increased • The potential for large-scale black- pollution, inefficient energy production, outs is reduced. costs tied to non-renewable fuels, and

Micropower at the Crossroads 9 • Local control of energy sources smog-forming pollutants than the most allows increased responsiveness to efficient natural gas power plant technolo- local concerns. gies.8 These pollutants have been shown to increase the risk of serious health prob- • Power sources can be built to appro- lems ranging from headaches and nausea priate scale for local consumption. to asthma complications and lung cancer.9 The opportunity to end this threat to The vast majority of distributed gen- public health is at hand if we use emis- eration units currently operating in New sion standards and policy incentives for Jersey are diesel generators. Diesel gen- distributed generation to push newer erators release as much as 363 times more technologies to the forefront.

10 Micropower at the Crossroads THE CLEANEST MICROPOWER TECHNOLOGIES

olar and wind technologies have while interconnected arrays can provide been proven effective for local electricity for a remote village or serve as S power generation throughout the a power plant for a city. PV is a truly country. With free fuel, advanced unique technology with many advantages. technology, and incentives provided According to the U.S. Department of by the state, these technologies are be- Energy, “it is easy to foresee PV’s 21st coming more cost effective and cost century preeminence.”11 competitive.10 Although PV panels only generate Recently the power industry has made electricity when the sun is shining, con- substantial advances in fuel cell technolo- nection with the grid makes it possible gies and in using combined heat and to depend on PV, both from the con- power systems to increase energy effi- sumer and the state planning perspec- ciency. Public agencies, small and large tives. On hot days, when electricity businesses, and individual homeowners consumption is at its peak, PV panels feed are taking advantage of these advance- excess electricity into the grid. In the ments to install localized and indepen- evening when the sun is down and elec- dent power generation capacity. tricity demand is lower, customers draw These clean technologies are not with- electricity from the grid. Recent improve- out their environmental impact, but they ments in “net metering” – in which the substantially reduce the environmental electricity meter runs backward when impacts of electricity generation. power is being fed into the grid – have made this much more practical for consumers. Solar Photovoltaics Many people mistakenly believe that so- Advantages of Photovoltaic lar power can only be harnessed effec- Technologies tively in the Southern and Southwestern states, but solar PV is a valuable resource • Simplicity – With no moving parts for New Jersey as well. The state’s solar (or very few, for some applications), potential is excellent, and solar power operation and maintenance costs are generation peaks at the same time that minimal. energy demand peaks – in the heat of • Versatility – PV can connect to the summer afternoons. In some parts of the existing infrastructure of the utility state, photovoltaics are even sold at Home grid and serve as an alternative Depot stores – a sure sign of how main- power source during peak periods of stream they are becoming. power demand or it can operate Photovoltaic technology converts remotely (off the utility power-line sunlight directly into electricity with- grid). Many PV systems are easily out using any moving parts. The basic transported. PV can also be scaled building block is the photovoltaic cell, according to the amount of power which is made of semiconductor mate- needed. rials. Cells can be connected together to form modules, and modules can be • Reliability – First developed for U.S. connected to form arrays. A few PV man-made satellites in the 1950s – cells will power a hand-held calculator, where low maintenance was an

Micropower at the Crossroads 11 absolute necessity – and now with • Sustainability – PV shares the two over 40 years of technical advance- advantages common to all sustain- ments improving performance, PV able energy sources: it has a low has very high online availability.12 environmental impact (it is nonpolluting) and the fuel is free. • Peak Output – PV power output peaks when demand peaks. Solar PV has zero operating emissions. • Quiet – PV systems make no Therefore, solar PV is exempt from all noise. air quality permitting requirements.

PV AT UNION HQ

he International Brotherhood of Electrical Workers (IBEW) Local 269 inTrenton will shortly be host to the largest photovoltaic system T in New Jersey. The 101 kW system is on track for final installation in early fall 2002. “We are leading the way for photovoltaic systems,” Business Manager Charles Marciante exclaims proudly.13 “Solar will help us lower costs, reduce pollution, and conserve natural resources. It’s a technology our mem- bers are extremely interested in deploying.”14 Environmental savings are significant with this project. Over its 30-year projected lifetime, the array is expected to result in a 4,700 ton reduction in 15 CO2 emissions and a 100,000 pound reduction of NOx and SO2. Marciante emphasizes they are not only saving the environment but working to strengthen national security by decreasing U.S. dependence on for- eign oil supplies.16 The IBEW array will avoid the use of the equivalent of 7,500 barrels of oil, 2,500 tons of coal, or 550 million cubic feet of gas over the life of system.17 Three of the four buildings at the Tren- ton site will have photovoltaic arrays on the rooftop. One of the three buildings, an on- site school, will produce 100% of the power it uses. The other two structures are expected to meet 80% of their power needs with solar panels. The PV tiles used in this array also pro- Photo by PowerLight Corp. vide extra thermal insulation and extend the life of the roof. The added insulation of the tiles reduce the cost of heating and air conditioning, while the tiles protect the roof from UV rays and thermal degradation.18 The tongue and groove assembly of the PV tiles allow them to be connected like pieces of a puzzle without the use of adhesives and without penetrating the surface of the roof. Advanced Solar Products will install the photovoltaic system manufactured by PowerLight Corporation. The New Jersey Clean Energy rebate is providing fifty percent of the cost of the system.19

12 Micropower at the Crossroads Hands-On Wind Power

he Liberty Science Center, located in Liberty Park, is known for hundreds of interactive exhibits designed to make science fun. One such T exhibit demonstrates wind power with a turbine visible from the patio. Installed in 2001, the turbine directly provides electricity to the center. It produces up to 10 kW of electricity – enough to supply an average home with power. The turbine, a Bergey Excel S/E,

also offsets 16 tons of CO2, 180 pounds of SO2 24 and 120 pounds of NOx annually. The turbine is part of the U.S. Department of Energy’s Small Wind Field Verification Program (FVP). The FVP is designed to share the cost of research with industry while allowing manufacturers to test the performance and reliability of their products in the field. AWS Scientific, an engineering and meteoro- logical consulting firm that specializes in renewable energy technology, is under contract with the DOE to monitor the applicability and effectiveness of the center’s turbine. Photo by Liberty Science Center

Wind Individual turbines vary in size, ranging from about 30 feet high with propel- Wind turbines are an excellent local lers between 8 and 25 feet in length to 20 power generation option for many New stories high with propellers over 300 feet Jersey residents and businesses. A wind in length.20 turbine consists of a rotor, an electrical Single home-sized wind turbines in the generator, a speed control system, and a 10-50 kW range are becoming more tower. When the wind blows and spins popular in many places. Since they don’t the propellers of the turbine, which are need as much wind as the larger turbines, akin to airplane propeller blades, the ki- they can be effective in more areas. netic energy of the wind is converted to mechanical power, which in turn drives the electrical generator and produces an Advantages of Wind electrical current. Technologies Most people are familiar with these • Simplicity – Operation and mainte- turbines when they are grouped together nance costs are minimal. Modern in a wind farm and operate like a con- wind turbines require maintenance ventional power plant, feeding electric- checks only once every six ity to the utility grid. But small turbines months.21 can be installed and operated individu- ally to satisfy the electrical needs of a • Versatility – Wind turbines can home or business, just as they were on connect to the existing infrastructure farms for hundreds of years. of the utility grid or can operate

Micropower at the Crossroads 13 remotely (off the utility power line electrolyte separated by an anode and a grid). cathode to generate a direct electrical current, and both can be combined into • Reliability – Wind power is the groups to increase power output. fastest growing energy source world- Batteries store their fuel, then periodically wide and its proven reliability has run down and require recharging. Fuel much to do with its success. 22 Small cells, on the other hand, are fed a con- wind systems are designed to operate tinuous supply of fuel. The varying types for at least 30 years.23 of fuel cells all rely on hydrogen as their • Sustainability – Wind-generated fuel, but they can get it from a variety of power shares the two advantages sources. common to all renewable energy Four different types of fuel cells – the sources: it has a low environmental Phosphoric Acid Fuel Cell (PAFC), the impact (it is nonpolluting) and the Molten Carbonate Fuel Cell (MCFC), fuel is free. the Proton Exchange Membrane (PEM), • Quiet – Modern wind turbines are and the Solid Oxide Fuel Cell (SOFC) – much quieter than combustion have been or are operating in 16 coun- turbines. tries, and several more types are being developed and tested. Wind technologies have many of the Fuel cells are being developed for use same advantages as solar photovoltaic in both vehicles and stationary applica- technologies. Like solar PV, wind has tions. These applications include power zero operating emissions. Wind turbines for individual facilities such as hospitals, are therefore exempt from all air quality office buildings, and schools; primary permitting requirements. power sources for remote villages and campgrounds; utility power plants; and power sources for temporary needs such as construction sites. As distributed elec- Fuel Cells trical generation becomes more wide- Where solar photovoltaics or wind tur- spread, fuel cells could serve as primary bines are not feasible, fuel cell technolo- power and thermal energy sources for vir- gies are a good local power generation tually anything. option, especially when operated in Most fuel cells are named for their combined heat and power applications. electrolyte, and they each have different (See below for more about combined properties, capabilities, fuel require- heat and power.) Although they now use ments, and emissions. For example, the fossil fuels to create hydrogen, fuel cells PAFC that is commercially available to- emit far less pollutants than diesel and day is offered in the 200 kW size, though most other fossil fuel generators. Emis- it is technically able to operate in the sions from current cells are primarily range of 50 kW to 11 MW. The PAFCs

CO2 and water. With further develop- in operation today use either natural gas ment they will be able to utilize renew- or propane, but could also be fueled by able energy to produce their hydrogen methane, alcohols, landfill gas, or anaero- fuel. bic digester gases. Through the chemical reaction of In the future, renewable energy combining hydrogen and oxygen to make sources may be widely used to generate water, fuel cells convert chemical energy the hydrogen needed to power fuel cells. into electricity and heat without combus- Sunline Transit has a new hydrogen tion. They operate similarly to batteries. generation facility powered by wind and Both batteries and fuel cells utilize an solar energy.25

14 Micropower at the Crossroads Advantages of Fuel Cell • Simplicity – With few moving parts, Technologies fuel cells are low-maintenance. • Flexibility – Fuel cells can use • Low emissions – Fuel cells emit different fuel sources since they only fewer pollutants than any other fossil need hydrogen and oxygen. fueled micropower technology. • Reliability – Fuel cells are online a • Quiet – Fuel cells are quiet. greater percentage of the time than • Versatility – Fuel cells are modular in large power plants. design; so they can be stacked to increase power output.

Hotel Fuel Cells

lans to bring two fuel cells to New Jersey were finalized in April between EnergyPlus, a subsidiary of PPL Corporation, and Starwood Hotels and Resorts. PPL, headquartered in Allentown, PA, controls P 26 or owns more than 10 MW of power in the U.S. Starwood, owner of the Westin and Sheraton chains, is the largest hotel operator in the world.27 The agreement includes installation of two fuel cells at the Sheraton Hotels in Parsippany and Raritan. Both fuel cells will be 250 kW systems. The plants are scheduled to come online by the end of 2002. Each fuel cell will meet approximately 25% of the hotels’ electricity and hot water needs. A 250 kW cell provides enough energy to power approximately 200 households.28 “We feel that fuel cell technology will play an important role in reducing harmful emissions and reduce the hotels’ overall energy costs,” said Ted Darnell, President of Starwood North America, in signing the agreement.29 Annual emissions reductions from each of the fuel cells include 1.2 million pounds of carbon dioxide, 11,000 pounds of nitrogen oxides, and 25,000 pounds of sulfur dioxide. Eliminating these pollutants is the equivalent of re- moving 118 automobiles from the road.30 PPL will own and operate the fuel cells, and Starwood will purchase the energy they produce. The fuel cells will cost $3.3 million, half of which will be offset by a grant from the New Jersey Clean Energy Program. Because of this grant, PPL is able to sell the electricity to Starwood at rates that are lower than they had been paying, resulting in a win-win situation Photo by FuelCell Energy for the hotel chain.

Micropower at the Crossroads 15 CHP at the College of New Jersey he College of New Jersey sits on 340 acres in Ewing and includes 3.2 million square feet of buildings, including dormitories. Since 1995, the T College has met part of its needs with combined heat and power. The College was due to overhaul its existing CHP system in 1999. Realiz- ing the need for energy had increased along with the size of campus, they decided to replace the old turbine with a new, more powerful, system. They switched from a 3.2 MW unit to a 5.2 MW natural gas system. The new turbine was installed with minimal modifications to the existing heat recovery steam generator or other equipment. The 5.2 MW turbine increased energy efficiency to 77% and made it possible to meet 90% of campus energy needs.32 This increase in power and effi-

ciency reduced NOx emissions by 55 tons and C02 by 3,800 tons. This is equivalent to planting 1,000 acres of trees or offsetting greenhouse gas emissions from 340 homes annually.33 In 2000, the College won the Energy Star Award for Combined Heat and Power. The award is sponsored by the U.S. EPA and the U.S. Department of Energy. The award recognizes projects that use at least 5% less fuel with CHP than they would in separate power and heat facilities. The College is also part of the Com- bined Heat and Power Partnership. The partnership, formed in October of 2001, represents a joint effort by the EPA, businesses, city and state governments, non- profits and institutions of higher learning to promote improved air quality.

Photo by College of New Jersey The original 18 partners represent more that 5,800 MW of energy capacity – enough energy to supply 6 million households. The same plants combine to reduce annual carbon dioxide emissions by 8 million tons or the equivalent of 19 million barrels of oil.34

Combined Heat cooling as well as mechanical and electrical power. and Power Recent technology developments – Combined heat and power (CHP) is not particularly in turbines and microturbines a specific generating technology but – have made small-scale CHP systems rather an application of technologies to more cost-effective and reliable. When meet end-user needs for heating or properly designed, fossil fuel-based

16 Micropower at the Crossroads generators can dramatically increase their • Flexibility – Can be designed to efficiency through modification into deliver multiple energy services. CHP systems. • Reliability – Advanced technology In CHP systems, the heat that is nor- and local control enhance service mally released as waste heat is instead re- delivery. covered and used to heat water, rooms and buildings and/or drive motors for air • Improved Environmental Perfor- conditioning or refrigeration. CHP sys- mance – Produces lower emissions tems can also use waste heat to provide than conventional separate systems. steam to generate more electricity, like “cogeneration” at large power plants. Combined heat and power systems can Key Recommendations be employed in many commercial and Electricity generation has always had se- industrial facilities where there is a rela- rious negative impacts on air quality. We tively constant thermal need. now have the opportunity, however, to Recovering and reusing waste heat in generate our power with minimal envi- this manner can make generators more ronmental consequences. State agencies than 80% efficient, more than double the must do all they can to encourage the 33% average efficiency of conventional widescale implementation of clean tech- electricity generating systems.31 The in- nologies, as they simultaneously encour- creased efficiency saves the extra fuel that age energy users to consume energy as otherwise would be necessary to operate efficiently as practical. The many energy heating systems – often replacing old, consumers who are making a transition inefficient and dirty boilers. to micropower should be using the best Increased fuel efficiency translates di- available technology. Recommended rectly into reduced emissions of green- policy actions include the following. house gases and other pollutants. NOx, which forms smog, and CO2, the prin- • Require formal consideration of cipal global warming pollutant, are sig- clean micropower as a potential least nificantly reduced. Combined heat and cost alternative to transmission and power systems also reduce SO2 emis- distribution upgrades and a means of sions, precursors to acid rain, and par- avoiding the cost of future environ- ticulate matter, a cause of chronic lung mental regulation. disease. Because it is still based on burning • Incorporate efficiency in emissions fossil fuels, CHP is not sustainable en- standards to credit the efficiency ergy production on the level of wind advantages of combined heat and and solar. But as long as fossil fuels are power. used to drive generators, CHP should • Expand the availability of financial be widely encouraged as a very good incentives, including buy-down improvement over less efficient tech- programs, tax credits, and grants, for nologies. the installation of clean forms of micropower. • Develop incentive tariffs and reduced Advantages of CHP Systems standby and exit fees for clean micropower installations. • Efficiency – Increases efficiency of fuel use by capturing waste heat for • Streamline the permitting and utility heating, cooling and other on-site interconnection process for clean energy requirements. micropower installations.

Micropower at the Crossroads 17 • Expand funding for clean micro- • Establish requirements that all new power technology advancement. residential and commercial construction be “solar-ready” with • Provide incentives for developers to the basic infrastructure to ease future include clean micropower at new installation of photovoltaic panels. residential or commercial construction projects.

18 Micropower at the Crossroads THE DIRTIEST MICROPOWER TECHNOLOGIES

he internal combustion engine Diesel generators are used in a variety (ICE), the traditional technology of ways, with three general categories of T used in vehicles, is also the pre- use:35 dominant technology for portable and Emergency standby generators – stationary generators. Also called recip- Often referred to as “back-up generators” rocating engines, ICEs can use a variety or BUGs, these are generators that oper- of fuels, including diesel, gasoline, natu- ate on a temporary basis as back-up power ral gas, and propane. Diesel is the most supplies in the event of power outages. common fuel for ICEs used as distrib- Prime generators – Generators used uted generation. on a regular basis to supplement energy from the power grid. Portable generators – Generators Diesel Generators that are moved from location to location to provide power (motor vehicles and Although there are now many competi- engines used to propel equipment directly tive technologies available for distributed are not considered portable generators). generation, diesel generators have his- The New Jersey DEP has no compre- torically dominated the micropower mar- hensive inventory of the number of die- ket. This form of micropower has also sel generators in the state. However, in been the most cost effective for consum- response to the recent Y2K scare, many ers, largely because the public health and businesses purchased on-site generators environmental costs of burning diesel fuel and registered them with the DEP. Those are not accounted for in the cost of gen- generators for which electronic records eration. are available are summarized in Table 2. The diesel generator is also the most The actual number of micropower units polluting form of micropower. Many in New Jersey is much higher, but people are familiar with the black plumes records of many generators have not been of smoke released by diesel trucks and entered into the state database and many buses. Diesel generators are no different. other generators are not registered with The harmful health effects of diesel ex- the DEP.36 This list includes diesel gen- haust have been studied and well docu- erators as well as generators using other mented for decades. Because many diesel fuels. This list does not include generators generators are located in dense urban set- used for more than emergency purposes. tings, this technology significantly in- Data from other states likely presents creases the public’s exposure to cancer- a better picture of the total number of causing pollutants. diesel generators in New Jersey. The California Air Resources Board (CARB) has made the best attempt among state Quantifying the Problem air quality agencies to quantify diesel gen- Diesel generators are widely used erator ownership. CARB estimates that throughout New Jersey; providing power there are a total of 65,382 diesel genera- for everything from businesses to agri- tors in California. Assuming an equal cultural equipment to homes. Diesel gen- number of diesel generators per capita in erators are found in the basements of New Jersey, this equates to nearly 8,000 office buildings or powering lights used diesel generators in the state, including during freeway construction. portables. (See Table 3.)

Micropower at the Crossroads 19 Table 2. Emergency Generators utilities, estimates that installed capacity Registered with NJ DEP of backup generators in the U.S. is equal to 10% of total peak demand.38 Peak gen- Number of erating capacity in New Jersey in 1999 County Registered Generators was 16,651 MW, yielding an estimated total backup generator capacity of 1,600 39 Atlantic 30 MW for the state. At an estimated av- 40 Bergen 69 erage size of 330 kW, this equates to Burlington 66 more than 5,000 emergency stand-by Camden 34 generators in New Jersey. Cape May 7 The more hours a diesel engine oper- Cumberland 19 ates, the more pollutants it releases into Essex 90 the air we breathe. For example, emer- Gloucester 30 gency back-up generators in normal op- Hudson 116 eration are generally used only 25-50 Hunterdon 4 hours a year while prime engines oper- Mercer 41 ate anywhere from 100 to several thou- Middlesex 131 sand hours per year. Hence, although Monmouth 64 there are far more emergency generators Morris 45 in New Jersey, prime engines are a larger Ocean 79 source of diesel pollution in the state due Passaic 52 to their longer hours of operation. Salem 9 Currently, diesel generators are regu- Somerset 74 lated differently depending on how they Sussex 16 are used. The result has been confusing Union 43 and inconsistent standards for not only Warren 8 diesel generators but for all micropower. This needs to be improved by develop- TOTAL 1,027 ing standards that are based on environmental and public health impacts.

Table 3: Estimated Diesel Generators in New Jersey37 Emissions Diesel generators are a significant source Diesel Generators Number in NOx PM by Type of Use New Jersey (tons/year) (tons/yr) of air pollution in New Jersey and nationwide.41 As diesel fuel burns, over forty Emergency Stand-by 2,818 685 34 identified toxic air contaminants are re- Generators leased into the air we breathe. The pri- Prime Generators 482 898 42 mary pollutant is nitrogen oxides, which Portable Generators 4,669 2,118 137 can cause lung function deterioration and other serious human health effects. Ad- TOTAL 7,969 3,702 213 ditional pollutants include carbon monoxide, carbon dioxide, sulfur oxides, and volatile organic compounds. Judging by utility industry estimates, Each year, the 8,000 diesel generators this amount of micropower capacity ap- estimated to exist in New Jersey emit pears to be a low estimate. The Electric 3,700 tons of nitrogen oxides and 200 Power Research Institute (EPRI), a tons of sulfur dioxide, assuming average non-profit energy research consor- operating and emission rates.42 See tium founded and supported by electric Table 4 for a description of the health

20 Micropower at the Crossroads Table 4: Description of Emissions

Name of Abbrevia- Source and Environmental Impacts Health Impacts Pollutant tion

Carbon CO CO is produced by burning organic matter Fatigue, angina, reduced Monoxide such as fossil fuels, wood and charcoal. visual perception and Motor vehicles produce 67% of the man- dexterity, death in closed made CO that is released into the atmo- space. sphere.

Carbon CO2 CO2 is produced by burning organic matter Major contributor to global Dioxide such as fossil fuels, wood and charcoal. CO2 warming, which has been is a greenhouse gas. linked to an increase in the spread of disease.

Nitrogen NOx Oxides of nitrogen are the chemicals respon- Irritates lung tissue, causes Oxides sible for giving smog its brown appearance. bronchitis and pneumonia, NOx contributes to the formation of ozone, has been linked to a production of particulate matter pollution, decrease in lung function and acid rain. growth.

Particulate PM Particulate matter consists of soot and dust Penetrates deep into the Matter particles that are smaller than the diameter lungs and is associated with of a human hair. numerous respiratory and cardiac problems and cancer.

Sulfur SOx Oxides of sulfur are produced by the burning Reduces respiratory vol- Oxides of fossil fuels. Large emitters of SOx include ume, increases breathing motor vehicles, refineries and power plants. and nasal airway resistance. SOx contributes significantly to acid rain.

Volatile VOC/UHC VOCs are a class of reactive organic gases Coughing, fatigue and Organic that contribute to the formation of ozone nausea; contributes to the Compounds and smog. Motor vehicles, refineries and inflammation of lung tissue power plants are the primary source of VOCs. and reduced lung capacity. Levels of VOCs are often determined by measuring unburned hydrocarbons (UHC).

Air Air toxics like benzene, toluene, and formal- Cancer, reproductive Toxics dehyde are formed from fossil fuel process- disorders, developmental ing and combustion. The U.S. EPA has disorders. identified 188 chemicals as hazardous air pollutants. and environmental effects of these and be in operation to boost an electricity load other pollutants from diesel generators. that is heightened by the heavy use of air Emissions from diesel generators can conditioning. In other words, diesel gen- have a large impact on ambient air qual- erators put out their highest levels of pol- ity at times of heavy use. This can be a lution exactly when air quality is the most major factor influencing attainment with sensitive to pollution increases. air quality standards. Hot summer days, This amount of pollution could push when air problems are at their worst, are cities into non-compliance with clean air the most likely time that micropower will standards.

Micropower at the Crossroads 21 Health Impacts within 10-20 average city blocks of a diesel generator operating only 100 hours The extended use of diesel generators can per year experience elevated mortality result in serious human health implica- risks.43 tions, especially since most non-agricultural diesel generators are located in densely populated urban areas. Where Cancer Risk large numbers of people are, so too are In recent years, an increasing number of these under-regulated, high-emitting en- health organizations, as well as the U.S. gines that spew smog-forming chemicals, EPA and state environmental agencies, fine particles, and known cancer-causing have recognized the cancer-causing ef- agents. fects of diesel exhaust exposure.44 Air This can create significant health risks pollution control officials now estimate for entire neighborhoods. People living that based on a lifetime risk of seventy years exposure, diesel exhaust may be responsible for over 125,000 cancer cases each year nationwide.45 The cancer risk from an emergency standby engine is equivalent to that of an idling school bus. The cancer risk from prime engines (including non-agricultural engines and agricultural engines) is more than that of a low-volume freeway or that of a facility that has constant diesel truck traffic. Both current diesel back-up generators and prime engines substantially surpass the acceptable risk level of Photo by High Frequency Active Auroral Research

Figure 3: Potential Cancer Risk from Activities Using Diesel Fueled Engines

Idling School Buses

Emergency Standby Engine

Truck Stop

Low Volume Freeway

Distribution Center

Prime Engine

High Volume Freeway

0 100 200 300 400 500 600 700 800 900 Potential Excess Cancers (Chances per million based on 70-year exposure)

22 Micropower at the Crossroads one in a million cancer cases established Many other toxic substances are found by the U.S. EPA. in diesel exhaust. More than 40 compo- The California Air Resources Board nents of diesel exhaust are listed as haz- has estimated that a person’s lifetime can- ardous air pollutants by the U.S. EPA.50 cer risk increases by 50% if he or she lives near a single one-megawatt diesel generator that runs for as little as 250 hours annually.46 Another California study found the cancer risk in five cities to be Other Fossil Fuel 70-140 times higher than commonly ac- Internal Combustion cepted levels in the most affected neighborhoods.47 Engines

Non-Cancer Health Risks Natural Gas Engines Diesel exhaust is also known to cause Internal combustion engines fueled by numerous non-cancer respiratory prob- natural gas are cleaner than diesel gen- lems. Diesel is a major source of particu- erators, but still have high emissions of late matter (PM), or soot, which can lodge dangerous air pollutants. Natural gas gen- deep in the lungs and result in the exac- erators have large reductions in NOx and erbation of asthma, respiratory infections, SO2 compared with diesel generators, increased susceptibility to allergens, medium reductions in PM and CO2, and chronic obstructive lung disease, pneu- minimal reductions in CO and VOCs. monia, and heart disease. A recent study Natural gas engines are offered with found that even short-term exposure to two carburetor tuning settings – rich burn PM may increase the chance of heart at- (stoichiometric) or lean burn (in which tacks in at-risk populations.48 the air/fuel ratio is increased). However, Diesel exhaust also contains nitrogen the choice is a trade-off of lowering emis- oxides (NOx). NOx in the presence of sun- sions of one pollutant while increasing light and volatile organic compounds those of another. The rich burn tuning forms smog. Recently, the USC Keck will reduce NOx and hydrocarbon emis-

School of Medicine found in a long-term sions, but increase CO2 emissions. All study that both NOx and PM can perma- other emissions are similar between the nently reduce the lung function of a child two tunings.52 Natural gas generators still living in Southern California by as much contribute significantly to the same en- as 10%. Diesel exhaust was believed to vironmental and health impacts described be a significant contributor.49 in Table 4.

Table 6: Emissions of Diesel and Gas Micropower and Large New Power Plants (lbs/MWh)51

Generator Type Efficiency NOx CO SO2 PM10 UHC CO2 Diesel Engine 38% 21.8 6.2 0.5 0.8 1.2 1,432 Natural Gas Engine 36% 2.2 5.0 0.01 0.03 16.5 1,108 (lean burn) Natural Gas Engine 29% 0.5 4.0 0.01 0.03 0.4 1,376 (rich burn) Combined Cycle 51% 0.06 0.1 0.004 0.04 0.05 776 Natural Gas Power Plant

Micropower at the Crossroads 23 Engines Using Other Fossil Fuels essential to achieve further emissions reductions for diesel engines. ICEs can also use gasoline and propane as fuel. Though not as common as diesel • After-Treatment Technology / and natural gas generators, gasoline and Emission Control – Particulate traps propane generators are commercially physically capture particulate matter available. in a filter and can reduce PM emis- Emissions levels from gasoline-fueled sions by 83%.54 Selective catalytic ICEs fall between those of natural gas and reduction (SCR) uses ammonia as a

diesel-fueled generators. Gasoline gen- catalyst to break down NOx. SCR erators are the cheapest generators on the systems have been shown to reduce 55 market, but have a reputation of high NOx by 65% to 99%. Nitrogen maintenance requirements as compared oxide adsorbers have the potential to

to generators using any of the other fos- reduce NOx by 90%. This technol- sil fuels. ogy involves both a chemical catalyst Propane generators emit very similar and burning the filter clean. Even amounts of pollutants as the natural gas with these improvements, however, generators.53 diesel and other fossil fuel generators are still dirtier than the clean micropower technologies discussed Improving Engines earlier. for Emergency and • Increased Efficiency – The efficiency of ICE generators can be improved Portable Use by ensuring proper installation and Due to the severe public health and en- sizing. Improper installation can vironmental hazards associated with ICE account for a 25% loss in efficiency. generators, their use should be limited to Another way to improve efficiency is emergency back-up generation and por- to capture and reuse the generator’s table operations, and then only when heat. The waste heat produced by operated in conjunction with emission- the generator can be recovered to control measures. The pollution-reduc- provide energy for further electricity ing measures that can reduce the harmful production or space and water impact of diesel generators on nearby heating. This can reduce emissions communities include fuel advancements, by 35 to 50%. control technologies, improved effi- • Hours of Use – Reducing the operat- ciency, and stringent operations stan- ing hours of ICE generators will also dards. reduce the amount of pollution that • Fuel Advancements – The U.S. EPA is released into the air we breathe. recently adopted regulations requir- ing petroleum producers to distrib- ute low-sulfur diesel (15 ppm sulfur content) nationally by 2006 for Key Recommendations vehicle use. This rule should also The New Jersey state government has an apply to off-road diesel use. New obligation to protect the state’s air qual- Jersey should institute this require- ity. Since the move to local power gen- ment on its own. Because most eration has partly involved an increased advanced diesel pollution control reliance on the most polluting forms of devices are sulfur-sensitive, such electricity generation, state agencies steps to require low-sulfur diesel are should take steps to discourage the use

24 Micropower at the Crossroads of dirty micropower. This would include • Require that transmission grid the following measures. operators draw on clean, efficient micropower before similarly priced • Require that all micropower units dirty installations. operated in New Jersey receive certification or permits as a condi- • Require ultra low-sulfur diesel for all tion for being connected to the diesel engines in New Jersey, on and electric grid. off-road. • Provide incentives for the trade-in • Establish a clear and limited defini- and upgrade of polluting micropower tion of “emergency use.” installations.

Manufacturers and distributors of diesel generators used the “energy crisis” to encourage consumers to purchase polluting home power systems.

Micropower at the Crossroads 25 NEW MICROPOWER TECHNOLOGIES

ew technologies for generating of the micropower options. When oper- local power are emerging in the ated with alternative fuels, however, their N marketplace. Although they are emissions can be reduced. See Appendix not as clean as the renewable energy A for information on alternative fuels. sources, most of these alternatives are distinct improvements over current diesel generators. By phasing in stringent Turbines standards regardless of technology, state A “gas turbine” differs from the recipro- officials will push manufacturers to im- cating engine in that it uses a continuous prove these technologies to limit harm- combustion process rather than intermit- ful emissions. tent combustion. Like a reciprocating Some of these micropower options can engine, the basic gas turbine is an open be used in combined heat and power ap- system, but it can be modified to reuse plications. They are not as simple to op- its exhaust heat. Exhaust treatment tech- erate and maintain as sustainable options nologies can reduce NO emissions sig- such as wind and solar, but they are often x nificantly, and some manufacturers are versatile and reliable. Most available tech- now incorporating similar technology nologies utilize carbon-based fuels. into the combustion process itself.57 While they pollute less than diesel en- Gas turbines have traditionally been gines, they still emit harmful gases. manufactured to generate several hun- dred megawatts for use as central power plants. Now some manufacturers are Alternative Fuel scaling down their units to less than 30 Reciprocating Engines MW.58 Most new turbines are fueled by natural gas. Some can also use other The reciprocating engine, or internal petroleum fuels or a dual-fuel configu- combustion engine, is the traditional en- ration. gine used in vehicles and diesel generators, as noted above in the “Dirtiest Micropower” section. This system draws air into a cylinder, compresses the air to Microturbines heat it, then injects fuel, which ignites Introduced over the last few years, the when mixed with the hot air. The result- microturbine is a relatively new technol- ing explosion moves the piston. It is an ogy with a rapidly growing market. Based open system, meaning that it does not on the same technology as a jet engine, reuse the air it draws in; instead it releases although much reduced in size and im- it into the atmosphere as exhaust heat and proved with advanced components and gases. software, microturbines can provide Stationary reciprocating engines, like power in the 25 kW to 500 kW range. the diesel generator, are typically 5 MW The initially available commercial units or less, with the 1-3.5 MW range being generate power ranging from 28 kW to the largest growing segment recently.56 75 kW. These smaller units are about the When fueled by traditional fossil fu- size of a refrigerator. els, these engines are the most polluting The turbine shaft of a microturbine

26 Micropower at the Crossroads spins as fast as 100,000 rpm. The high- gines are physically smaller than conven- frequency power generated is then con- tional engines and relatively quieter. En- verted to 60Hz for common use. This gines ranging from 500 watts to 10 kW simple design lends itself well to the low- are either available now or under devel- maintenance needs of distributed genera- opment. tion.59 Emissions associated with Stirling en- Microturbines have the potential to gines vary according to the heat source operate on a variety of fuels. Manufac- used. The Stirling engine itself has no turers, with some support from federal emissions, so when it is developed to use and state agencies, are working to im- solar heat as the heat source, the entire prove microturbine performance, includ- system will be emission-free. When fos- ing generation efficiency. Models built to sil fuels are burned to provide the heat date have lower efficiency, and thus source, there are emissions. Since the higher CO2 emissions, than traditional combustion takes place externally, it can engines. be monitored to burn fuels completely In addition to their small physical size and limit the temperature, reducing emis- and flexibility regarding fuel sources, sions somewhat. microturbines have only one moving part and, therefore, low maintenance costs. They are highly suitable for combined Potential Advantages of heat and power applications. Emerging Technologies Microturbines’ advanced fuel combus- Technical advancements, including im- tion technology results in low NOx emissions, without any emission control provements in fuel combustion and emis- technology, in comparison with gas-fired sions reduction equipment, have the central station plants. Early tests indicate potential to significantly reduce the en- that this emissions performance will be vironmental impacts of these micropower maintained over extended operating pe- technologies. Federal, state and manufac- riods. Capstone Turbine Corporation turer-funded research and development programs are pursuing such improve- claims that current units emit NOx at the rate of 0.50 lbs/MWh, and projects that ments. Clear emissions standards will performance improvements will decrease provide clear signals regarding technology performance targets, and a strong NOx emissions to 0.14 lbs/MWh by 2005 and 0.05 lbs/MWh by 2008. incentives policy can establish attractive market advantages for the cleanest micropower technologies. Stirling Engines Stirling engines are powered by the expansion of a gas that results when the gas Key Recommendations is heated and the compression of a gas These technologies already show the that results when the gas is cooled. In this promise of being safer for public health closed cycle system, a fixed amount of gas than the dirtiest micropower. But to make is externally heated, usually by combus- sure that they move toward the cleanest tion, and as it expands and contracts, it micropower technologies, we must en- moves the pistons. sure that pollution standards are applied Theoretically these engines can use across the board to all developing tech- any heat source. Currently systems are nologies, and complement the standards being developed that use biomass, with policies that provide economic woodchips and solar heat. Stirling en- and other incentives to the cleanest on-site

Micropower at the Crossroads 27 micropower systems. State agencies • Require that all micropower units should take the following actions. operated in New Jersey receive certification or permits as a condi- • Expand funding for clean micro- tion for being connected to the power technology advancement. electric grid. • Streamline the permitting process for • Ensure adequate enforcement of clean units that meet or beat air emissions standards and establish pollution standards. significant penalties for violation.

28 Micropower at the Crossroads POLICY RECOMMENDATIONS

icropower is here to stay, and o Streamline the permitting process is likely to expand rapidly in for clean units that meet or beat air Mthe coming years. This is both pollution standards. an opportunity and a risk for public health o Ensure aggressive enforcement of in New Jersey. Clean micropower options standards and establish significant have the potential to greatly reduce dan- penalties for violation. gerous emissions from electricity production, but the most common micropower In addition, many other specific poli- technology – the diesel generator – is cies could ensure that the move to local even more polluting than the leading power generation leads to air quality ben- technologies of large central power efits rather than a digression to polluting plants. To ensure that public health is technologies. We recommend that state protected and that new technologies that agencies: reduce pollution are encouraged, distributed generation policy should be based Establish standards and rules for micropower on the following principles: operation: o Distributed generation must be as • Require that all micropower units clean as or cleaner than the cleanest operated in New Jersey receive central power plant technology cur- certification or permits as a condi- rently in widespread use. Regulations tion for being connected to the should target attainment of equiva- electric grid. This policy establishes a lent performance as soon as practical. check against the operation of o State rules and incentives must excessively polluting micropower promote the cleanest energy industry systems and preferred treatment for for the future of New Jersey. the cleanest micropower options. o Regulations should be as simple as • Require that transmission grid opera- possible so manufacturers can tors draw on clean, efficient micro- anticipate changes and comply with power before similarly priced dirty new technology requirements. installations. Air pollution emissions should be considered in decisions State agencies can help move micro- regarding which generators are used power in the right direction. To protect in times of excess power capacity. the health of the people of New Jersey • Require emissions control measures and the air quality of the state while help- for diesel generators used for emer- ing to assure reliable local power genera- gency back-up power supply. Back- tion, we recommend the following up generators will continue to be a immediate policy actions: major pollution problem if they are o Set stringent emissions standards for left out of the regulatory picture. all micropower units operated in • Require that all new residential and New Jersey. commercial construction be “solar- o Conduct a comprehensive inventory ready” with the basic infrastructure of existing micropower and other to ease future installation of photo- on-site generation. voltaic panels.

Micropower at the Crossroads 29 • Require ultra low-sulfur diesel for all residential or commercial construc- diesel engines, on and off-road. tion projects. Since builders don’t Because most advanced diesel pollu- pay the ongoing energy costs of the tion control devices are sulfur- units they build, they are reluctant to sensitive, such steps are essential to include energy saving measures that achieve further emissions reductions will increase the initial sale price of for diesel engines. their buildings. • Provide incentives for the trade-in Provide funding for clean micropower: and upgrade of diesel micropower • Require formal consideration of installations. Other states have clean micropower as a potential least shown this to be a cost-effective cost alternative to transmission and approach to reducing air pollution. distribution upgrades and a means of avoiding the cost of future environ- Clear hurdles to the implementation of mental regulation. clean micropower: • Expand funding for clean • Streamline the permitting and utility micropower technology advance- interconnection process for clean ment. State research and develop- micropower installations. ment programs can target the most Micropower is currently at a disad- promising clean micropower tech- vantage compared with traditional nology options. Public money for the power generation due to an unneces- development of these technologies sarily complicated interconnection would be a good investment for the process. Eliminating this disadvan- long-term health of the state tage for clean micropower would economy. promote its expansion. • Continue and expand the availability • Develop incentive tariffs and reduced of financial incentives, including standby and exit fees for clean financing assistance, buy-down micropower installations. This would programs, tax credits, and grants, for address financial disincentives in the installation of clean micropower. utility relationships with micropower As long as consumers are expected to operators. shoulder the burden of the investment costs of new technology, the The adoption of these recommendations government should provide financial will promote a vital distributed generation assistance. system that reduces the negative public • Provide incentives for developers to health impacts associated with diesel and include clean micropower at new other dirty micropower technologies.

30 Micropower at the Crossroads APPENDIX A: ALTERNATIVE FUELS

everal non-traditional fuels have Ethanol is made from the fermentation been developed that can replace of sugars or starches in grains, agricul- S pure fossil fuels in some combus- tural feedstocks and agroforestry prod- tion engines, microturbines, Stirling en- ucts. Ethanol is mixed with gasoline in gines, and fuel cells. While some of these different percentages to be used as a fuel. fuels may hold promise for reducing emissions from electricity generation, Methanol is predominantly made from most of them involve levels of health risk steam reforming of natural gas. It can also similar to those of traditional fuels. be made from feedstocks of coal or biomass, but currently these are not as eco- Biodiesel is a fuel that is made from veg- nomical. Like ethanol, methanol is mixed etable oils or animal fats. This is the “bio” with gasoline to be used as a fuel. In these part, which can be used alone, but is usu- gasoline mixtures, both are referred to as ally mixed with conventional petroleum gasohol and are designed for vehicle use. diesel fuel at a ratio of 20-30% “bio” to 70-80% diesel.60 The fuel operates in a Biomass describes many types of tech- conventional combustion engine like a nologies to turn agricultural materials and diesel generator. Compared to regular waste into energy. Some are unacceptably diesel, biodiesel has reduced emissions of harmful to the environment while others

CO, SO2, and particulate matter, but has provide a net benefit to the environment. increased NOx and soluble CO2 emis- The use of biomass in fuel cells, micro- sions. turbines and Stirling engines is still being researched. Propane, also called Liquefied Petro- leum Gas (LPG), is formed as a by-prod- P Series Fuels are blends of methyl- uct of processing natural gas and refining tetrahydrofuran (MTHF), ethanol and crude oil. Propane usage emits no aro- hydrocarbons. Currently MTHF is pro- matic compounds, benzene or particu- duced from biomass or petroleum feed- lates. Engines that are optimized for stocks. propane have lower CO2 emissions than diesel generators. Propane can be used as a substitute for diesel fuel in internal combustion engines.

Micropower at the Crossroads 31 APPENDIX B: GLOSSARY

Back-up generators (BUGs) – Emer- Distributed generation (DG) – Energy gency power generators used to avoid production that occurs near the place potential power interruptions caused by where it is used. This term is used inter- malfunctioning power plants, natural di- changeably with “micropower” through- sasters, or demand overloads on the elec- out this report. tric grid.61 Emergency standby generators – Of- British thermal unit (Btu) – The stan- ten referred to as “back-up generators” dard measure of heat energy, equal to the or BUGS, these are generators that op- amount of energy needed to raise the erate on a temporary basis as back-up temperature of one pound of water by power supplies in the event of power out- one degree Fahrenheit at sea level. It ages. takes about 2,000 Btus to make a pot of coffee. Fuel cell – An energy production technology that creates electricity and heat California Air Resources Board through the chemical reaction of com- (CARB) – The regulatory agency that bining hydrogen and oxygen to make ensures California’s compliance with the water. Clean Air Act. CARB has done more than any other state environmental agency to Kilowatt-hour (kWh) – The most com- inventory micropower resources and monly-used unit of measure telling the measure their effects. amount of electricity consumed over time, equal to one kilowatt of electricity Carbon monoxide (CO) – An air pol- supplied for one hour. In 1989, a typical lutant produced by burning organic mat- New Jersey household consumed 534 ter such as oil, natural gas, fuel, wood and kWh in an average month. charcoal. Motor vehicles produce 67% of the man-made CO that is released into Megawatt (MW) – One thousand kilo- the atmosphere. watts (1,000 kW) or one million watts. One megawatt is enough energy to power

Carbon dioxide (CO2) – A greenhouse 1,000 average New Jersey homes. gas, produced by burning organic matter such as oil, natural gas, fuel, wood and Megawatt-hour (MWh) – One thou- charcoal. sand kilowatt-hours, or an amount of electricity that would supply the monthly Combined heat and power (CHP) – power needs of a typical home having an A power generation system that uses electric hot water system. waste heat to heat water, rooms and buildings; provide air conditioning or refrig- Microturbine – A new micropower tech- eration; or provide steam to generate nology based on the same technology as more electricity. a jet engine although much reduced in size and improved with advanced com- Department of Environmental Pro- ponents and software. tection (DEP) – New Jersey’s regulatory agency that ensures compliance with Net metering – A system for metering the Clean Air Act. electricity consumption that subtracts the

32 Micropower at the Crossroads amount of power fed back into the grid Prime generators - Generators used on by a micropower unit from the amount a regular basis to supplement energy from that is drawn from the grid. the power grid.

Nitrogen oxides (NOx) – The chemi- Portable generators – Generators that cals responsible for giving smog its brown are moved from location to location to appearance. NOx contributes to the for- provide power (motor vehicles and en- mation of ozone, production of particu- gines used to propel equipment are not late matter pollution and acid rain. considered portable generators).

Particulate matter (PM) – An air pol- Sulfur dioxide (SO2) – An air pollutant lutant made up of soot and dust particles produced by the burning of fossil fuels. that are smaller than the diameter of a Large emitters of SO2 include motor ve- human hair. hicles, refineries and power plants. SO2 contributes significantly to acid rain. Peak load or peak demand – The electric load that corresponds to a maximum Volatile organic compounds (VOCs) level of electric demand in a specified A class of reactive organic gases that con- time period. Peak periods during the day tribute to the formation of ozone and usually occur in the morning hours from smog. Motor vehicles, refineries and 6 to 9 a.m. and during the afternoons power plants are the primary source of from 4 to about 8 or 9 p.m. The after- VOCs. noon peak demand periods are usually higher, and they are highest during sum- Wind turbine – An energy generation mer months when air-conditioning use technology in which the kinetic energy is the highest. of the wind is converted to mechanical power, which in turn drives the electri- Photovoltaic (PV) panel – Also known cal generator and produces an electrical as a solar panel, PVs convert sunlight current. directly into electricity using semiconductor technology.

Micropower at the Crossroads 33 NOTES

1 Throughout this report, the terms www.ttcorp.com/upvg/4.5doc/4.5mwsmd.htm, “micropower” and “distributed generation” are 4 June 2001. used synonymously. 13 Charles Marciante, IBEW Local 269, 2 Micropower should not be confused with the personal communication, 6 August 2002. “peaker plants” that are much in the news 14 Powerlight, Electricians’ Union Deploys Largest recently. Although both are small electricity Solar Electrical System in New Jersey (press generating plants, peakers are generators release), 15 July 2002. operated by utilities and independent power producers that are used only during peak 15 David Eisenbud, PowerLight Corporation, demand times. They are typically 50-100 MW. personal communication, 20 August 2002. Micropower units are normally not operated by 16 Charles Marciante, IBEW Local 269, utilities, and are typically in the 2 kW to 1 MW personal communication, 6 August 2002. range, with some as high as 10 MW. 17 See note 15. 3 David Morris, Seeing the Light: Regaining 18 PowerLight, Powerguard System, downloaded Control of Our Electricity System (Minneapolis: from www.powerlight.com/powerguard.html, 13 Institute for Local Self-Reliance, 2001), 54. August 2002. 4 Ibid. 19 Tom Johnson, “PSEG Offloading Some 5 Energy Nexus Group, Performance and Cost Unprofitable Divisions,” Star-Ledger, 18 July Trajectories of Clean Distributed Generation 2002. Technologies, 29 May 2002. 20 U.S. DOE, Quick Facts about Wind Energy, 6 Regulatory Assistance Project, Model downloaded from www.eren.doe.gov/wind/ Regulations for the Output of Specified Air Emissions web.html, 15 July 2001. from Smaller-Scale Electric Generation Resources: 21 Danish Wind Turbine Manufacturer’s Model Rule and Technical Support Documents, Association, Windpower FAQs, downloaded from November 2001, Appendix B. www.windpower.dk/faqs.html, 25 May 2001. 7 Ibid. 22 Lester Brown et al, State of the World 2001 8 Ibid. (NY: W.W. Norton, 2001), 94. 9 Many studies have established the links 23 American Wind Energy Association, between these pollutants and their health effects, California Electricity Crisis Spurs Sales of Home including D.W. Dockery et al, “An Association Wind Energy Systems (press release), 13 February between Air Pollution and Mortality in Six U.S. 2001. Wind turbines have an average availability Cities,” New England Journal of Medicine, 1993. factor of 98%: U.S. DOE, Office of Utility For a good overview of the health effects of Technologies, Renewable Energy Technology power plant pollution, see Clean Air Task Force, Characterizations, December 1997. Death, Disease & Dirty Power, October 2000. 24 Liberty Science Center, LSC’s Wind Turbine 10 See New York Shines, New York Consumer – A Fact Sheet, 15 July 2002. Guide to Buying a Solar Electric System, available 25 Sunline, Clean Fuels, downloaded from at www.nyshines.org/pvguide.pdf; California www.sunline.org/clean_fuels, 31 August 2001. Public Interest Research Group, Affordable, 26 FuelCell Today, FuelCell Power to Provide Reliable Renewables: The Pathway to California’s Direct FuelCell Power Plants for New Jersey Hotels, Sustainable Energy Future, July 2001; and downloaded from www.fuelcelltoday.com, 27 California Public Interest Research Group, June 2002. Predictably Unpredictable: Volatility in Future Energy Supply and Price from California’s Over- 27 Christian Berg, “PPL Installs Fuel Cells in Dependence on Natural Gas, September 2001, Starwood Hotels,” Morning Call, 17 April 2002. available at www.calpirg.org. 28 Ibid. 11 U.S. Department of Energy (DOE), Office 29 Ibid. of Utility Technologies, Renewable Energy 30 Starwood Hotels & Resorts Worldwide, Technology Characterizations, December 1997. Starwood Teams with PPL Corporation to Introduce 12 PV has an average availability factor of 96%: Fuel Cell Technology at Two Sheraton Properties in Sacramento Municipal Utility District, Sustained New Jersey (press release), 17 April 2002. Orderly Development of PV, downloaded from

34 Micropower at the Crossroads 31 U.S. Combined Heat and Power June 2000. Operating rates as reported by Association, Combined Heat and Power: CARB, Diesel Risk Reduction Plan, Appendix II, Distributed Generation Applications that Save October 2000. Power, Reduce Costs, and Improve Energy Security, 43 Nancy Ryan, Kate Larsen, and Peter Black, downloaded from www.nemw.org/uschpa/ Environmental Defense, Smaller, Closer, Dirtier: papers.htm, 17 August 2001. Diesel Backup Generators in California, August 32 U.S. Combined Heat and Power 2002. Association, 2000 Energy Star Combined Heat and 44 Cal EPA, Chemicals Known to the State to Power Awards, downloaded from Cause Cancer or Reproductive Toxicity, revised 1 www.nemw.org/uscchpa, 9 July 2002. May 1997. 33 U.S. EPA, Combined Heat and Power 45 State and Territorial Air Pollution Program Partnership, CHP Success Stories, downloaded Administrators and the Association of Local Air from www.epa.gov/chp, 9 July 2002. Pollution Control Officials, Cancer Risk from 34 U.S. EPA, Combined Heat and Power Diesel Particulate: National and Metropolitan Area Partnership, CHP Partners, downloaded from Estimates for the United States, 15 March 2000. www.epa.gov/chp, 9 July 2002. 46 CARB, Attachment to Letter on Emergency 35 California Air Resources Board (CARB), Generators: Air Pollution Emissions from Electricity Diesel Risk Reduction Plan, Appendix II, October Generation, 21 February 2001. Based on 70-year 2000. exposure. 36 Mike Winka, NJ DEP, personal 47 See note 43. communication, 25 July 2002. 48 A. Peters et al, “Increased Particulate Air 37 Extrapolation of California data from CARB, Pollution and the Triggering of Myocardial Diesel Risk Reduction Plan, Appendix II, October Infarction,” Circulation 103 (23), 12 June 2001. 2000. Number of non-agricultural generators At-risk populations are considered to be translated per capita. Number of agricultural children, athletes, people with respiratory generators translated by ratio of gross state disease, and the elderly. product of farming sector (DOC, Bureau of 49 W. James Gauderman et al, Association Economic Data, Regional Accounts Data, 2000). between Air Pollution and Lung Function Growth in Emissions figures are based on engine Southern California Children, 2 May 2000. characteristics of each category or subcategory 50 CARB and Office of Environmental Health of diesel-fueled engine, the number of each of Hazard Assessment, Proposed Identification of these types of engines, and average operating Diesel Exhaust as a Toxic Air Contaminant, 22 hours as reported to local air districts in April 1998. California. 51 See note 6. Micropower figures represent 38 New York State Energy Research and emissions from units with no emissions Development Authority, Task 4: Survey of Backup treatment, which is typical of most current Units in Nassau and Suffolk Counties, 2002. micropower facilities. 39 Energy Information Administration, “1999 52 Nathanael Greene and Roel Summary Statistics,” State Energy Profiles: New Hammerschlang, “Small and Clean Is Beautiful: Jersey, downloaded from www.eia.doe.gov/cneaf/ Exploring the Emissions of Distributed electricity, 15 August 2002. Generation and Pollution Prevention Policies,” 40 330 kW average diesel generator size Electricity Journal, 2000. estimate from analysis of the 2001 Diesel and 53 Mark Delucchi, Propane Education and Turbine Worldwide Annual Power Generation Research Council, LPG for Forklifts: A Fuelcycle Survey by Power Systems Research, 2001. Analysis of Emissions of Urban Air Pollutants and 41 State numbers are in the previous section. Greenhouse Gases (press release), 17 September An estimated 371,000 tons of NOx and 16.7 1999. million tons of CO2 are emitted from diesel 54 Ibid. generators nationwide (Virinder Singh, Renewable Energy Policy Project, Blending 55 Union of Concerned Scientists, Rolling Wind and Solar into the Diesel Generator Market, Smokestacks: Cleaning Up America’s Trucks and Winter 2001). Buses, October 2000. 42 Emission rates from Distributed Utility 56 Seth Dunn, Worldwatch Institute, Associates, prepared for CARB, Air Pollution Micropower: The Next Electrical Era, July 2000. Emissions Impacts Associated with Economic Market 57 See note 5. Potential of Distributed Generation in California,

Micropower at the Crossroads 35 58 See note 36. 61 Thanks to the California Energy 59 See note 5. Commission (www.energy.ca.gov/glossary) for many of these definitions. 60 National Biodiesel Board, Biodiesel Frequently Asked Questions, downloaded from www.biodiesel.org/general/faq.htm, 22 August 2001.

36 Micropower at the Crossroads