Court ruling decreases availability of emergency generators in Demand Response programs
Decision could benefit those utilizing Combined Heat and Power systems
Recent changes to the Environmental Protection Agency’s (EPA) rule of allowing backup generators to run 100 hours per year for “emergency demand response” without being subject to emissions regulations will have a significant impact on those facilities that are enrolled in Demand Response (DR) programs.
While energy companies wait to see if the Supreme Court will take up an appeal, the decision could have positive implications for current and potential users of Combined Heat and Power.
In 2010, the EPA started allowing backup generators to operate for 15 hours a year without being subject to emissions regulations as a part of demand response programs. These programs were implemented during times of extreme load or emergency conditions that could trigger blackouts.
In January 2013, the agency updated those rules to allow backup generators to run for 100 hours a year for “emergency demand response,” in addition to emergency events when a blackout is possible.
The U.S. Court of Appeals for the District of Columbia Circuit has thrown out that EPA rule, reverting the limitation back to 15 hours.
What does this mean for buildings that have utilized their emergency generators in DR programs?
DR provides an opportunity for consumers to play a role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives.
Such programs can lower the cost of electricity in wholesale markets, and in turn, lead to lower retail rates. Dramatically reducing the number of available hours to shift electricity usage devalues the emergency generator. Furthermore, annual reports may now have to be filed with the EPA with records of all emergency generator operating hours.
By design, certain Combined Heat and Power systems work on the DR model.
CHP systems like the Aegis’ PowerSync deliver two forms of energy, heat and electricity, from a single fuel source (natural gas). The high efficiency systems significantly reduce energy costs and harmful emissions (a benefit not available with emergency generators that often run on diesel fuel).
However, that dual benefit is only part of the value.
Combined Heat and Power systems like the Powersync provide the added benefit of reducing reliance on the grid and in situations where a “peak weather event” is occurring, reducing stress on the grid.
In the case of a central power grid failure, PowerSync, with its black start capability, will continue to operate, delivering heat and electricity. However, during that emergency, the system will automatically switch its electrical output to the load priorities pre-selected by the building manager, thereby keeping those functions up and running during the grid blackout.
The system gives the building independence from the grid, and reduces stress on the local power structure.
Will users of CHP will be able to monetize its DR capabilities? Should you consider the opportunity of Demand Response programs when sizing your CHP?
Check with a CHP specialist at Aegis Energy, EDF Group for a free energy analysis to see the benefits of CHP and DR programs.