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GENERATION RELIABILITY IMPACTS OF

INDUSTRY-OWNED DISTRIBUTED GENERATION SOURCES

A. A. Chowdhury, SMIEEE D.O. Koval, FIEEE


Electric System Planning Dept of Electrical and Computer Engineering
MidAmerican Energy Company University of Alberta
Davenport, Iowa 52801 Edmonton, Alberta T6G 2V4
USA Canada

Abstract: The successful integration of industry-owned operations and market functions independent of owners of
distributed generation (DG) sources into the power facilities. In the new competitive environment, power
systems of deregulated electric utilities involves generation is no longer a natural monopoly. Generation
fundamental long-term issues, conflicting objectives and expansion will be decided by the market forces and new
important uncertainties. Presently, corporate financial players such as independent power producer (IPP) and
difficulties, public environmental concern and deregulation industrial distributed generators will make their presence
of electric utility industry are making base load thermal felt in the generation arena.
and nuclear plants more and more difficult to build. As a
result, industry-owned distributed generator is a source of Smaller and environmentally friendlier DG can now be
electrical energy commonly considered as a part of the built economically by independent power producers and
solution to this problem. Most of the available literature on large industrial customers. DG consists of small generators
DG has focused on its economic and interconnection typically ranging in capacity form 15 to 80,000 kW
impacts on a utility or on a ratepayer, or on an owner of connected to the electric utility system [5]. DG can be
distributed generating unit. What is missing from existing installed at utility or at customer sites. DG technologies
DG analysis is a relatively simple and understandable include conventional and non-conventional energy
method examining the generation reliability impacts of technologies such as diesel engine driven generators, gas
industry-owned DG sources on utility systems. This paper turbines, wind turbines, fuel cells and micro-turbines.
presents industry schedule related models for modeling Recent technical advances have significantly reduced the
distributed generators for use in conventional generating cost of DG and could eventually compete with central
capacity reliability assessment. The developed models are stations. Reference 6 indicates that a generator selling into
illustrated using the Institute of Electrical and Electronics the real-time market could have made more than
Engineers (IEEE) Reliability Test System (RTS) [1]. $3,068/MWh during just 5 hours on July 21, and would
have made more than twice as much money if it could
have earned the real-time price on the days when the real-
I. INTRODUCTION time price averaged more than $35/MWh. Reference 7
indicates that in the next 10 to 15 years DG could capture
At present, the electric power industry is undergoing 10% to 15% of new generating capacity in the United
considerable change with respect to structure, operation States. The growing demand for power could reach 60,000
and regulation [2-4]. The various electric utility acts to 120,000 MW of generation over the next 10 to 15 years
introduced in different countries have initiated the of which DG will be an increasing component. This could
restructuring process and the traditional vertically amount to 6,000 to 12,000 MW of DG over the next 10 to
integrated utility structure consisting of generation, 15 years. Reference 8 presents a probabilistic area
transmission and distribution functions has been investment model for the determination of whether or not
dismantled. Instead distinct generation, transmission and DG is an economic option in the overall distribution
distribution companies have been established in which system expansion planning. Reference 9 states that many
each company performs a single function in the overall DG technologies are expected to see 25-40% decreases in
electricity supply task. As a result, the overall capital costs and 10-15% increases in efficiency. In
responsibility of serving the individual customer needs addition, Reference 9 predicts that over the next 10 years,
does no longer reside in a single electric utility, as was the DG will emerge worldwide in many different shapes and
case in the vertically integrated utility structure. sizes, possibly accounting for 8-14% of all additions.

In order to appreciate the reliability issues arising in the Interconnections between utility supply systems and
present electric power industry environment, it is industrial DG units create concerns for utility system
necessary to recognize the many faces and actions that are planners. The utilities want to maintain dispatching control
shaping the environment. The deregulation legislations over the electric power entering the system in order to
establish the many new entities to facilitate system

0-7803-7883-0/03/$17.00 © 2003 IEEE


1321
ensure system stability, adequacy and security. The assessing the generating capacity reliability are illustrated
utilities want guarantees as to the time of delivery, the using the IEEE – RTS.
amount, and the length of the agreement, if the purchased
power is significant. Utility's reluctance often comes from II. DUAL MODELING ENERGY LIMITATION
concerns about the reliability of service rather than CHARACTERISTICS OF INDUSTRY-OWNED DG
economic facts. The fact that industrial DG puts the SOURCES
control of generation sources into the hands of a third party
The conventional approach to generating capacity
is the major drawback from a utility viewpoint. Most
adequacy evaluation is to use some from the loss of load
sources agree that DG is usually an economically sound
expectation (LOLE) method that is a capacity replacement
policy from the user's point of view as well as for the
technique. The basic LOLE approach is not appropriate
utility [5-9]. When DG sources become a possible option,
when energy limited units are involved. Generating
it becomes important to accurately model their effect on
capacity energy limitations are normally considered only
system reliability. To do this not only requires unit
when in connection with hydraulic generating facilities,
capacity and forced outage rates data, it is also necessary
however, it can be easily seen that restrictions to gas
to include the fluctuating nature of energy production for
turbines, oil and coal fired thermal units, potential uranium
the DG sources. Utilities usually model industrial DGs as
shortages to nuclear units can be added to the list of
peaking units because of the tendency for the DG to follow
potential energy limiters. Industry-owned DG facilities and
the working day. Industry-owned DG by its variability and
novel energy technologies such as solar and wind power
other characteristics however is more typical of an
also fall in the category of energy limited systems. There
intermittent base-load plant with no storage that may
are however clear indications that energy based techniques
contribute randomly to the utility's generation during peak,
are being actively considered and will be used extensively
cycling and base-load periods. Utility operators do not
in the future. A method known as the load modification
normally schedule the power outputs of industry-owned
technique has been developed [10–14] that can be used to
distributed generating units. The available energy may also
model generating units including limitations on the energy
be related to a schedule within the industry rather than the
available to them.
utility. To model this unit as being in continuous operation
is obviously incorrect. Industry-owned DG sources can be
The various features of the load modification method are
considered as energy-limited technologies, which differ
described in considerable detail in References 10 to 14 and
considerably from utility-owned conventional power
therefore only a brief description of the method is given in
generation technologies in performance and operating
this paper. The concept behind the load modification
characteristics. The fundamentally different operating
approach lies in answering the question, “ How does the
characteristics of industrial DG sources will affect power
load appear to the remainder of the system capacity when a
system reliability in a different manner than that of
given generating unit is loaded to supply energy to the
conventional technology systems. Dependence between
system?” The solution can be considered as process of
power production and load demand must be reflected in
modifying the load duration curve (LDC) with the given
the model in conjunction with the non-dispatchable
generating capacity distribution to produce an equivalent
characteristic.
load duration curve. Repeated application of this approach
for each generating unit in the system results in a final
Currently available literature on DG deals only with DG-
unsupplied model. The basic principle governing the
Utility interconnection and economic feasibility issues.
process is mathematical expectation. The expected energy
Very little work has been performed on reliability impacts
not supplied (EENS) is given as [13]:

n
EENS = ∑ Pk * Ak (1)
k =1
of DGs on utility generation systems. This paper is
concerned with the reliability impacts of industrial DG on
the overall utility generation systems. As industrial DG where:
sources are integrated into existing power systems to
satisfying base load, peaking and cycling requirements, Pk = probability of having a capacity outage equal to Ok
Ok = magnitude of the capacity outage
electric utilities need planning models that are capable of
Ak = energy not supplied due to the capacity outage Ok
accurately representing these technologies. This paper
presents industry-owned DG models that reflect
intermittent nature of energy production of DG sources.
The practical applications of the developed models in

1322
The load modification technique formula is [10 -14]: the generation reliability impacts of industry-owned DG
n
sources.
D(L) = ∑ d ( L) * P
i i (2)
i 100
where, Load Duration
80 Peaking

Peak Load (%)


D(L) = expected duration of load level L Curve
Low Merit
Intermediate
th 60
Ci = capacity of the i capacity state of the unit
Economical
di(L) = duration of load level L on the original load 40 Intermediate

duration curve reduced by Ci MW


20 Baseload
Pi = probability of Ci MW
n = number of capacity states of the unit 0
0 20 40 60 80 100
The calculation is carried out for all load levels starting Percent of Time
from the peak and the resultant curve represents the
equivalent load model as seen from the rest of the units in Fig. 1. Load Duration Curve for a Typical Electric
the system. The load modification process begins by Utility System
modifying the original load duration curve using the
capacity distribution of the energy-limited unit concerned
to obtain the capacity modified curve. The area enclosed III. INDUSTRY-OWNED DISTRIBUTED
by the original and the capacity modified curves represents GENERATOR MODELS BASED ON A
the expected energy supplied by the unit if it were not WORKING DAY SCHEDULE OF AN
energy limited. The second phase of the modification INDUSTRY
process considers the energy distribution of the unit. The
As noted earlier, an industry-owned DG may or may not
energy modification starts at the top of the LDC. The final
be available twenty-four hours a day, due to a dependence
energy modified load duration curve is determined by the
on a working day schedule. It is, therefore, erroneous to
following equation [10 – 14]:
model this unit as a base - loaded unit. Because of the
variability of industrial DG power, it poses special
Df(L) = dc(L) * P [ E(L)] + D0(L) * {1 – P[E(L)} (3) problems in realistic assessment of the ability of industry-
owned DG capacity in satisfying utility load requirements.
where:
An energy-limited DG unit will contribute intermittently to
Df(L) = duration of load level L on the final curve utility generation during peak, cycling and base load
periods. It will, therefore, replace energy and capacity
dc(L) = duration of load level L on the capacity modified from a variety of conventional plants in a rather complex
curve fashion. This section presents methods that model the time
d0(L) = duration of load level L on the original curve dependent energy production of industry-owned DG
E(L) = the area between the capacity modified and the sources in the analysis. Proper modeling of industrial DG
original curve and above the load level L units not only requires those parameters needed to analyze
P[E(L)] = probability of energy equaling or exceeding conventional energy sources such as capacity and forced
E(L) MWh outage rates, but also an hourly capacity distribution for
these units. The best feasible method is to develop a
The energy limitation constraints associated with energy- model, which uses the unit’s hourly capacity distribution
limited technologies prevent generation at the bottom of together with hourly peak load points. Using this method, a
the load duration curve, i. e., base load operation. The more accurate assessment of an industrial DG unit’s effect
usual approach is to operate an energy- limited unit at the on system reliability can be obtained. It was noted earlier
highest position on the load curve, i. e., used for peak that utilities have often modeled energy-limited industrial
shaving purposes so that its available energy is fully DG as peaking units because of the tendency for these
consumed. The treatment of the output of various generation resources to follow the working day. The
generation types in response to demand is shown by the following subsection describes the effects of industrial DG
load duration curve in Fig. 1. The load modification power on the system reliability using a peaking operation
approach can be used to successfully model generating scheme.
units including limitations on the energy available to them.
This novel technique is utilized in this paper in assessing

1323
A. A Peaking Model for Industry-Owned DG Sources the seasonality of the resource, a system percentage of
industry-owned DG was studied from 0 per cent to 22 per
A model reflecting effects on the utility system reliability
cent of the total system capacity for the sensitivity studies.
using the expected energy not supplied (EENS) index by
The system reliability depends on many factors one of
adding industrial DG sources to a system as peaking units
which is the penetration of DG capacity. The term
instead of large base load plants is presented in this
'penetration' is defined as the ratio of the DG capacity to
subsection. The test system used to illustrate the concepts
the total installed capacity (DG plus conventional). A 0 per
involved for both load and generation is the IEEE-RTS.
cent penetration is used for a base case. Distributed
The Reliability Test System Task Force of the Application
generating units usually tend to be small and therefore, this
of Probability Methods Subcommittee has developed the
is the reason for using a DG of 50 MW capacity. In order
IEEE–RTS. This system was developed to test or compare
to judge the effects of the DG sources, the following
methods for reliability analysis of power systems. The
procedure was used:
operating system is comprised of 32 units of 9 distinct
size/type with a total of 3405 MW capacity. This
1) The expected energy not supplied for the system
generation model is shown in Table I.
without any industrial DG was computed using the
load modification approach. This becomes the base
case.
TABLE I.
IEEE – RTS GENERATION SYSTEM
2) Units whose total capacity equates to the desired
amount of DG were removed from the system. Table
No. of Unit
Unit Type F. O. R. II details the amount of DG used in the study.
Units Capacity
6 Hydro 50 0.01 3) The amount of DG for peaking operation is added.
Since the DG resource is tied to the process steam, it
2 Nuclear 400 0.12 is also tied to the time period when the steam is
1 Coal 350 0.08 generated. This in turn is related to when the industrial
plant is up which can vary over the day from 8 a.m. to
3 Oil 197 0.05 4 p.m. on weekdays. This case therefore, modeled DG
4 Coal 155 0.04 sources such as working day DG, i.e., devices working
from 8 a.m. to 4 p.m. for five days a week.
3 Oil 100 0.04
4 Coal 76 In the model, all distributed generating units were used as
0.02
peaking units, i.e., 100 per cent of the available DG is
5 Oil 12 0.02 running from 8 a.m. to 4 p.m. The DG running from 8 a.m.
to 4 p.m. on weekdays will have 2,080 operating hours in
4 CTU 20 0.10 the study period of 8,736 hours. The energy available to
the DG is the product of its rated capacity and total
operating hours. The energy available to the 50 MW DG in
The IEEE–RTS load model is used in the study. An 8736- peaking operation is therefore 104,000 MWh. The load
hour year is used as the data for 364 days are provided, and modification approach utilizes both capacity and energy
therefore, an 8736 hourly peak load model is used in distribution models for a unit in the computation process.
computing the system EENS index. The weekly, daily and Table III gives the capacity probability table for the 50
hourly load peaking factors are given in Reference 1. The MW DG with a F.O.R. of 2 per cent. The energy
suggested peak load for the IEEE–RTS is 2850 MW. The distribution table for the 50 MW DG running from 8 a.m.
EENS for the base case of the RTS without considering to 4 p.m. on weekdays is provided in Table IV.
any industrial DG and at the suggested peak load of 2850
MW is 1158 MWh. The model for the industrial DG
sources is assumed to be a block of units each with
identical capacities, i.e., 50 MW each, and identical forced
outage rates. The forced outage rate (F. O. R.) of a unit is
defined as the probability of finding the unit on forced
outage at some distant time in the future. The F. O. R. is
the basic generating unit parameter used in static capacity
evaluation. The F.O.R. value of the 50 MW unit was
varied in the range 2 per cent to 16 per cent to investigate
its effects on the system reliability. In order to account for

1324
TABLE II.
INDUSTRY-OWNED DG PENETRATION LEVELS IN As stated earlier, in order to account for the seasonality of
THE IEEE-RTS the resource, a sensitivity study was performed. A system
percentage of industrial DG was studied from 0 per cent to
Penetration Industrial Removed 22 per cent. The results are shown in Fig. 2. In Fig. 2, PM
of DG Conventional Units from denotes Peaking Model and CSM denotes Combined
Industrial Capacity, Capacity (%) RTS Schedules Model. The Combined Schedules Model is
DG (%) MW (Unit Type) described in the following section. The total system
reliability decayed initially but as more DG was added, the
0 0 100 ----------------- system reliability improved significantly. The results show
that the risk is sensitive to changes in unit F.O.R. values.
For higher F.O.R. values the system EENS is also high.
4.4 150 95.6 1 – 100 (oil) The percentage of DG appears to have a dramatic effect on
1 – 50 (hydro) the risk. Two reasons can be given for improved system
risk, i.e., industrial DG was used for peak shaving
8.8 300 91.2 3 – 100 (oil) purposes and these sources are dispersed and smaller in
size.
1 – 400
13.2 450 86.8 LEGEND
(nuclear)
1 – 50 (hydro) Base case

1 – 400 4.4% DG Penetration - CSM


17.6 600 82.4 (nuclear) 4.4% DG Penetration - PM
2 – 100 (oil) 8.8% DG Penetration - CSM

1 – 400 8.8% DG Penetration - PM


22.02 750 77.98 (nuclear) 13.2% DG Penetration - CSM
1 – 350 (coal) 13.2% DG Penetration - PM
2 – 400 17.6% DG Penetration - CSM
26.43 900 73.57 (nuclear)
17.6% DG Penetration - PM
1 – 100 (oil)
22.02% DG Penetration - CSM
2 – 400
30.83 1050 69.17 (nuclear) 22.02% DG Penetration - PM

2 – 100 (oil) 1800


1 – 50 (hydro)
1600
TABLE III.
1400
System EENS (MWh)

CAPACITY PROBABILITY TABLE FOR THE 50 MW


DG WITH A 2 PER CENT F.O.R. 1200

1000

Capacity (MW) Individual Probability 800


0 0.02
600
50 0.98
400
1.00
200
TABLE IV
0
ENERGY DISTRIBUTION TABLE FOR THE 50 MW
2 4 6 8 10 12 14 16
DG RUNNING FROM 8 A.M. TO 4 P.M. ON
F.O.R. of Industrial DG (%)
WEEKDAYS OPERATING AS BASED LOADED
UNITS
Note: CSM – Combined Schedules Model
ENERGY AVAILABLE CUMULATIVE PM – Peaking Model
(MWH) PROBABILITY
104,000 1.0 Fig. 2. Variation in System EENS with Industrial DG
Penetration levels and F.O.R.Values

1325
TABLE V.
ENERGY DISTRIBUTION TABLE FOR THE 50 MW
B. A Combined Industry Schedules Model for DG DISTRIBUTED GENERATING UNIT RUNNING
Sources FROM 4 A.M. TO 8 P.M. ON WEEKDAYS
OPERATING AS BASED LOADED UNITS
Since the industrial DG is a by-product of large industrial
processes, e. g., paper, chemical, food processing, it seems ENERGY AVAILABLE CUMULATIVE
reasonable to assume that certain percentage of the total (MWH) PROBABILITY
DG is working around the clock. For instance, the food
industry, which is very diverse in character, has some 208,000 1.0
plants that operate twenty-four hours a day for only about
half of the year, depending on agricultural activity; others
operate five to six days a week with one to three shifts of The capacity probability table for the DG is shown in
operation for the whole year. Integrated textile mills and Table III. The capacity models for the unit with different
finishing plants generally operate five to six days a week F.O.R. values considered in the studies can be constructed
with two shifts of manufacturing activity. In contrast, the in the same manner. The system EENS for different
integrated manufacturing plants in the steel, petroleum penetration levels and for different unit F.O.R. values were
refining, and paper industries as well as the majority of computed using the load modification approach. Fig.2
industrial DG candidates in the chemical industry presents comparison of results computed using peaking
generally operate up to twenty four hours a day, 365 days a and combined schedules methods. The system EENS
year, which offers the opportunity for high annual increases as the unit F.O.R. increases. It can be seen that
utilization. Consider a hypothetical case where the the combined schedules method provides the lower system
available DG power can be divided according to the risk in comparison to the peaking method. Since some
following hourly schedule: industry-owned DG capacity was used for satisfying the
base load demand in the combined schedules method, the
1) Units that will be expected to run three shifts, i.e., overall system reliability improved markedly. The initial
24 hours a day, 7 days a week. This basically can higher risk is, however, due to the type/size of the units
be defined as the base load operation of the unit. removed from the system. The general observation is that
the reliability improves significantly for a system with
2) Units that will run two shifts, i.e., from 4 a.m. to 8 industrial DG.
p.m. on weekdays.
IV. CONCLUSIONS
3) Units that will run one shift, i.e., 8 a.m. to 4 p.m. This paper has presented industry schedule related models
on weekdays. to estimate the impacts of industry-owned DG sources on
the generation system reliability. A range of comparative
studies has been conducted to show the difference in the
This division seems reasonable since the industry-owned
peaking and combined schedules DG models, and their
DG is a by-product of large industrial process whose work
impacts in different application types. The studies
schedule can be one to three shifts long. Assume that the
conducted show that the system EENS is very sensitive to
available DG can be split three ways, with one-third of the
changes in F.O.R. of DG sources and their energy
capacity going to each of the three time periods. The total
availabilities. A mix of industrial DG power sources can
operating hours for the DG running 24 hours a day and
be used to replace an equal amount of conventional
seven days a week are 8,736. For the case where the DG
generation without causing a degradation of system
runs two shifts on weekdays, the operating hours are
reliability.
4,160. The energy available to the DG running for 8,736
hours is 436,800 MWh. This is the maximum energy
Industry-owned DG units tend to be small in size. The
requirement from the 50 MW DG and the unit was used as
lower system risk obtained is mainly due to the small and
a base loaded unit in this application. The unit that is
dispersed DG sources. Industrial DG is a resource with
running for 4,160 hours has 208,000 MWh energy
few environmental problems. In most cases, the system is
available to it. The energy distribution model for the 50
already in existence, so adding a turbine/generator will not
MW DG running for 4,160 hours is given in Table V.
aggravate the pollution problem. The higher efficiency of
Table IV provides the energy distribution model for the
industrial DG, together with its ability to use fuels
unit running from 8 a.m. to 4 p.m.
unavailable to utilities, makes it an attractive alternative. In

1326
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