May 2001

Power to the People

Continued from page 4

By Peter Fairley

Power from Everybody

For the big energy companies like Williams and Enron, the lure of micropower goes beyond the selling and leasing of small generating plants. These organizations see an opportunity developing that will enable them to sell gas and electricity en masse. Aggregate the output of thousands of fuel cells and small turbines into a "virtual power plant," and peak shaving becomes power trading. If Williams could remotely activate thousands of microturbines on its customers' premises, the company could generate hundreds of megawatts for sale on the wholesale market. Houshmand says this could dramatically lower the cost of the microturbine, enticing companies like his own to bear a larger share: "Look at cell phones. A few years ago they were very expensive, and now service providers are giving them away. Why? Because they're selling the service."

The notion of virtual power plants could also charm traditional utilities that, until now, have been lukewarm toward technologies that let consumers and businesses generate their own power. In the past, utilities erected barriers to distributed power, such as maintenance fees for emergency backup service. Ritchie Priddy, associate director for distributed energy at Cambridge Energy Research Associates in Cambridge, MA, says that utilities remain ambivalent about micropower. For example, many utilities now pay retail for surplus energy from solar panels or wind turbines-a trickle of energy that poses little competition. But the same utilities pay little or nothing for surplus power from microturbines and diesels, where the kilowatts could really add up. "Some utilities are embracing distributed generation, but quite frankly they do it on their terms," says Priddy, a former utility company manager.

Micropower advocates like Priddy want to convince power companies that the proliferation of micropower generators could aid their operations by helping to stabilize the grid. There are some hopeful signs. Japanese utilities, for example, are subsidizing the development of residential fuel cells that heat water and churn out one kilowatt of electricity-nowhere near enough juice to power the household (a toaster alone consumes more than a kilowatt), but enough in aggregate to ease the strain on overloaded power lines. Virtual power plants could have a more dynamic effect on the grid: rather than asking consumers to turn off their equipment when power demand crests, imagine California's beleaguered grid controllers remotely activating thousands of microturbines and fuel cells to meet peak demand.