Thomas G. Bourgeois, deputy director of Pace University’s Energy and Climate Center, provided this response for the Dot Earth blog when asked, after the Hurricane Sandy disaster, how distributed generation of electricity and heat could cut disaster impacts and mesh with efforts to develop renewable energy sources in cities. Related Dot Earth post: http://nyti.ms/U5blIP Pace Energy and Climate Center: http://www.law.pace.edu/energy-and-climate-center

1. Thomas G. Bourgeois, deputy director of Pace University’s Energy and Climate Center,
provided this response for the Dot Earth blog when asked, after the Hurricane Sandy
disaster, how distributed generation of electricity and heat could cut disaster impacts
and mesh with efforts to develop renewable energy sources in cities.
Gas fired district systems or Microgrids with CHP [combined heat and power] are an
ally, not foe, of renewables. The multi-building, district model utilizes the gas far more
efficiently and can create an eco-system of various energy resources all optimized to
create greater value than possible in single site.
When you lay the electric conduit and thermal pipes you are “future proofing” your
energy system. This is essential infrastructure for more cost effectively delivering all
forms of energy, including and especially renewable energy. The pipes and wires are not
specific to the form of generation – whereas you may be using gas combustion turbines
or reciprocating engines now, in the near to intermediate term these same pathways can
carry renewable generated power and thermal energy. (District Energy St. Paul is a case
in point – also, see the Danish experience in this regard)
When power is generated, the waste heat is simultaneously utilized in a productive
manner to provide hot water, space heating and cooling, process heat or steam,
sterilization, drying, a variety of economic services. That can come from renewables as
well as gas.
Enlarging the vision from “zero energy building” to “zero energy neighborhoods”
represents a quantum leap in the potential opportunity set. At the individual building
level you are limited by the quirks of that building and by the very specific types of
economic activities taking place within it. When you diversify your opportunity set to
several proximate buildings you typically can achieve far more. You can take advantage
of complementary electric and thermal load profiles. For example, I recall a project site
in New England that I visited a few years ago. On one side of the street was a facility that
had a large demand for thermal energy (steam and hot water) and very modest demand
for heat. If they sized a CHP system to meet internal thermal needs, it would have been ~
10 MW’s --- but – internal demand was just 2 MW’s. On the other side of the street was
a facility that had a tremendous demand for power and small thermal demand. They
needed 14 MWs of power. Sizing the CHP system to meet thermal needs would have
resulted in satisfying just 25 – 30% of electric demand.
In each building, CHP was a marginal or poor investment – but – joining the two, was a
spectacular efficiency win for both.
If you have, say, a dozen buildings, some will have good PV [solar panel] exposure,
others not so good. Some can be easily retrofitted for Energy efficiency improvements,
others not so easy. Space may be available at one parcel, not at another.
MGrids and District systems with CHP could create a portfolio of resources; PV, solar
thermal, other clean DG, combine it with gas fired CHP, and energy efficiency retrofits,
demand response. The entire system is controlled with algorithms that optimize when to
use the PV internally and when to export it to maximize returns. When to use the DR,

2. when to turn up/down the CHP (gas) system.
The gas CHP is dispatchable and can be turned up/down readily for load following
(particularly recip engines). This is a nice balancing feature for the intermittent
renewables. Renewables (PV, small wind) do not possess all the attributes of an ideal
generation source. Power output can fluctuate quickly, causing problems for system
stability (requiring frequency and voltage support). The intermittents can be augmented
by battery and energy storage – a lot of good analysis on this in CA --- but that is
presently costly.
PV, CHP, storage, DR, EE can all work together as a new energy eco-system where the
value of the sum of the parts is far superior to each individually.
To fully exploit the value proposition we do need a smarter grid. We need better two
way communications between the microgrid and macrogrid. To fully take advantage of
RE and DG as a dynamic asset on the grid, requires communications and control flowing
two ways – not the one way design we have now.
There are problems working alongside existing network protection schemes, but the
engineering problems are solvable.
One concern I have been expressing is regarding our distribution system investments.
$100’s of millions are spent annually. These are very long-lived assets with service lives
of 30+ years. Investments we make today will be in service in 2045 (or do we pay
“STRANDED DISTRIBUTION COSTS” to utilities?)
As we make new investment in the distribution system what is being done to insure that
a. the system is becoming more amenable to higher DG penetration over time, in synch
with stated goals, AND
b. that we encourage the DG to be a dynamic asset on the system, one that can play a
positive role, rather than an added cost to the system
... is anyone piloting markets for DG services on the distribution system? For states
encouraging much higher penetration of DG as matter of policy, shouldn't we examine
how the DG and the distribution system ought to be configured to permit these new
resources to act as "good citizens" in ability to offer grid services?
I sent the brief below to NYSERDA last summer.
…………………………………..
Distribution System Investments
New York State has set aggressive goals for an 80% reduction in carbon emissions by
2050. In addition, New York has set a target of attaining 30% of state energy
requirements through renewable energy sources by 2015.
These shorter and longer term goals and objectives will require fundamental changes to

3. the current electric transmission and distribution system. The existing T&D system was
not designed for and is not particularly amenable to marked increases in the penetration
levels of distributed generation. Therefore, alongside goals for renewable energy, high
efficiency DG and deep carbon reductions, by implication and of necessity there ought to
be a similar requirement for T&D system goals that will enable this result and capture
the full value of these anticipated distributed energy resources.
New York’s distribution utilities are investing daily in the existing distribution system.
Capital investments made by utilities often have very long service lives. In some
instances investments made today have regulatory asset lives that continue up to and
beyond the year 2040[1] . It is imperative that long-lived investments be screened to
insure that they are in synch with announced state and local policies (e.g. New York
City’s PlaNYC) goals to increase the state’s reliance on distributed generation and energy
generated from renewable sources.
In the 21st century to what extent are the investments we make replacing the aged
distribution system with a 21st century capable system, or to what extent simply with a
replace parts-in-kind, type of system?
Do current protocols for assessing the prudence of new T&D capital spending include
metrics for assessing the extent to which the distribution system progressing in
accommodating higher penetration levels of DG? If we fail to take adequate account of
new grid capital spending in the context of announced public policy we are at risk of
incurring much higher than necessary future grid modernization costs and incurring
significant distribution stranded investment.
Suppose a distribution utility has a choice between capital investment A and B.
Investment A and B perform the same services for the system as it is currently configured
and utilized. Investment A costs less than investment B. However, despite its increased
cost, investment B augments the distribution system’s performance with respect to DG on
the network which it serves. Is there any consideration of the net value of investment B
pertaining to anticipated future uses of the distribution system? On the contrary, is there a
penalty assessed investment A for risks associated with pre-mature obsolescence?
[1] IRS Publication 946, Table B-2, Table of Class Lives and Recovery Periods (2010)
[1] IRS Publication 946, Table B-2, Table of Class Lives and Recovery Periods (2010)