Impact of Distributed Generation

Charles J. Mozina, Consultant, Beckwith Electric Co., Inc. USA


Operating DGs in parallel with utility distribution systems is not without hazards.

This article discusses the current technology in the interconnection of DGs to utility distribution circuits. Generators of 10MW or less are typically connected to the utility grid at the distribution level. Protection requirements to connect DGs to the utility grid had typically been established by each utility. Distribution utility circuits are designed to supply radial loads. The introduction of generation provides a source for redistribution of the fault current on the feeder circuit, which can cause the loss of relay coordination. Overvoltages can also occur. Within the past few years, there have been efforts by the IEEE (Standard 1547), as well as individual states, to develop standards and guidelines for the interconnection of DG. The stated goal of these standards/ guidelines is to have a single document of standard technical requirements for DG interconnection rather than having to conform to local utility practices and guidelines. This article examines how well this objective has been met.

Before the passage of the Public Utility Regulatory Policies Act (PURPA) in 1978, U.S. utilities were not required to interconnect with small generators. At the transmission level, there were always non-utility co-generating industrial facilities such as petrochemical plants and pulp and paper mills which operated in parallel with the utility. But at the distribution level, utilities could simply say "no" to small generator owners that wanted to operate in parallel with their system. PURPA was the first step in utility de-regulation and required utilities to interconnect with small generation as long as the owners of such generation followed "reasonable requirements" set forth by the utility. PURPA also provided a substantial tax incentive to DG owners. By the mid-1980's however, the tax incentive had expired and DG died.

DG remained relatively dormant until the mid-1990's when utility rates started to increase. The driving force for that resurgence was the belief that power could be generated cheaper at the point of consumption rather than purchasing power from a utility. During this period, most of the DG installations in the U.S. were in areas of the country where power costs were high. In these areas, small industrial and commercial customers supplied from distribution circuits started to install DG in peak-shaving or load-following applications where a significant portion of their load was generated on-site. Most of these generators were fired with natural gas. When natural gas prices increased by a factor of four in the late 1990's, DG died again. It remained relatively dormant until the mid-2000's when the issue of global warming came to the forefront of concerns by states and the federal government. The idea of "green power" was born.

To promote green power, utility regulators either set high buy-back prices for power generated from green sources or required utilities to generate a portion of their future power needs from green sources. Green sources included: wind, solar, hydro, fuel cells, biomass, diesels powered from synthetic fuels and methane from landfills which power gas turbines or diesels.

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