Micro CHP, installed in individual homes, will in time remove a substantial electricity demand on a dynamic basis at the low voltage level, and may, in some instances, neutralise or even reverse the power flows in distribution transformers. This will clearly have economic consequences for the Distribution Network Operator (DNO) in terms of lost revenue, but will also have profound consequences for LV network design.

The economic opportunities, and to a lesser extent environmental drivers, which are leading to the imminent advent of micro CHP, will disrupt and will require a response from electricity companies. There are those who will no doubt seek to obstruct the new technology and maintain the status quo of their business. However, in the long term, the considerable economic benefits to the operators of micro CHP should prove irresistible. At the other extreme are those companies who will enthusiastically embrace the new technology and significantly improve their competitive position. These latter companies are already in the process of establishing strategic alliances with technology providers, manufacturers, service, installation and energy service companies and are acquiring technical and commercial experience by undertaking laboratory and field trials.

A range of micro CHP technologies are approaching commercial launch and the remaining challenges relate less to the core technology and more to the peripheral and interface components and commercial packaging. Two (1kWe) Stirling engine based micro CHP units are undergoing field trials in the UK and commercial launch is anticipated during 2002. A somewhat larger (3kWe) unit from Sigma in Norway, is expected to reach market the following year. The 1kWe units are aimed at the mass housing market and one of them (the WhisperTech unit) although having a low efficiency (12%) is relatively cheap and durable. The majority of power produced by this unit would be consumed within the home. However, the 3kWe unit has a higher efficiency (and total cost), being aimed at larger family homes which offer the potential for rapid paybacks from the substantial fuel bill savings. Over half the power produced is likely to be exported so that the opportunities and threats to energy companies raised by this unit are significant.

It is at this stage that the implications for energy companies, suppliers and network operators, are becoming clearer. In general these challenges fall into two main areas, commercial and technical. Within the commercial area, the complexity of metering and settlement of domestic import/export represents a formidable challenge, whilst the technical standards appropriate to integrating numerous very small generators raises entirely new issues both at the customer interface and throughout the LV network.

However, even half-hourly settlement may become viable with the advent of advanced metering and in the short term, profile settlement appears to offer the basis of an equitable trading system. The technical challenges affecting network operators such as anti-islanding protection, fault levels, reliability and power quality have been successfully addressed in the Netherlands, but the cost of connection interfaces remains a distinct burden on micro generators.

This paper forms part of EA Technology’s micro CHP programme and summaries the status of micro CHP technologies, potential applications and scope of markets. It describes the potential commercial and technical impact on existing electricity companies, their networks and customer base as well as identifying likely new market entrants.

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