Distributed Resourcesat

Distributed Resourcesat

Richard Seguin - Principal Engineer Distributed Resources PlanningDTE Energy – Detroit Edison SeguinR@DTEenergy.com313-235-9598

DTE EnergyDTE Energy

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Agenda

DTE Energy Background Integration into Planning & Operating Process

Discussion Break Detroit Edison DG Experience

– Distribution Solutions Siting Load Following

– Premium Power

Discussion Break Other fancy work

– DoE DER Aggregation, Communication, Control and Sale

Discussion Break

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DTE Energy Business Segments

Detroit Edison Power Generation

Energy Services

Coal Services

Biomass Energy

Trading & Co-Energy Portfolio

EnergyResources

Detroit EdisonPower Distribution

EnergyDistribution

MichConGas Distribution

Non RegEnergy Gas

EnergyGas

Energy TechInvestments

HoldingCompany

Corporate & Other

Regulated

Non Regulated

Michigan

Service Area: 7,600 Sq. Miles

Customers: 2.1 million

System Peak Load: 12,132 MWAnnual Sales: 56,000 GWH

37% Commercial29% Residential29% Industrial 5% Wholesale & Interconnection

Detroit Edison Service Area

Distribution Substations 662

Distribution Circuits 2,808

1,876 @ 4.8kV

932 @ 13.2kV

Distribution Circuit Miles 38,939

20,184 @ 4.8kV

18,755 @ 13.2kV

Subtransmission 2,664 @ 24 kV

797 @ 41.6kV

Distributed Generation: 1,427 MWor 12 % of Peak Load

(Does not include < 100kW units)750 MW interruptible

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DTE Energy’s DG Commitment

“ Several years ago, the leadership at DTE tried to envision what the electric utility business would look like in a decade. One of our conclusions was that this industry would go through the same transformation that the computer business has experienced. There, mainframe computers gave way to desktops which gave way to laptops.

In the electric industry, the day of large central station power plants has already given way to modular, combined cycle gas powered plants. We envisioned a day when the next step, distributed (or personal) generation would play a major role. In fact utilities may be among the first real-world, large scale users of distributed generation. Distributed generation will increasingly become a cost-effective alternative to the expansion and reinforcement of T&D infrastructure”

Anthony F. Earley, Jr. Chairman & CEO, DTE Energy

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Traditional Electric System+

Personalized Power through Distributed Generation (DG)

DTE’s Vision for Distributed Generation (DG)

Traditional Electric System

Just another tool

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DG Vision

Let’s imagine a semi-truck load of new DG technology starting up and heading toward the utility; there are 3 ways to deal with it:

Throw yourself in front of the truck and hope it stops

Grab on to the back bumper and drag your feet Jump into the cab of the truck and help to steer

it.

The latter is the way that DTE Energy chooses to deal with this new technology.

DG Technology

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Integration into the Planning & Operating

Process

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The Utility Today

Many utilities’ capital budgets are decreasing as their customer’s expectations are increasing

Utilities must balance the need for new distribution and caring for existing distribution

We can’t afford to solve every 1MVA problem with traditional T&D 30MVA solution

– Problems that may only exist for a few hours per year

– Capacity that may not be fully utilized for several years. DG is one way of delivering just-in-time and “right-sized”

capacity to resolve smaller short falls while minimizing the initial capital outlay

Freeing dollars for reliability and maintenance

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DG Integration – 2003 ReviewProject No vs Project Cost per kW

Avg Cost of

new distribution

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Distribution Capital BudgetItems Included in Cost per kW

All New Business Projects and their installed capacities All Overload Projects and their installed capacities All Increase Load Blanket cost @ NO capacity addition All System Improvement Blanket cost @ NO capacity addition All Blanket Land Purchases @ NO capacity addition All project cost (includes prior, current and future year

expenditures) plus land, transformers and all project specific overheads

Utilized Capacity (capacity available for use) only not total installed capacity

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Items NOT Included in Distribution Cost per kW

Street Lights Relocations (required removal

of facilities located in public R/W)

Transmission (Not our company not all cost is associated with increased distribution load)

Subtransmission (Not all cost is associated with increased distribution load) *impacts of including evaluated

Reliability Projects (Cost does not result in significant capacity increase) *impacts of including evaluated

Distribution Transformers Service Standards (Small

Reliability projects - MPSC required capital to resolve frequent outage pockets)

Tree Trim (Capital Tree Trim) Maintenance (Primarily Pole

Top Maintenance) DWRP(Downed Wire

Replacement Program) URD Replacement (end of life

replacement of failing URD cable)

NURC (Normal Unit Retirement Changeout)

EURC (Emergency Unit Retirement Changeout)

Secondary Improvement (Replacement & rebuilding of old secondary system)

CIAC (Contribution In Aid of Construction)

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Graph represents Overload and New Business Projects Not Reliability Projects. The cost per kW for Reliability projects is typically very high.

DG Integration – 2003 ReviewProject No vs Project Cost per kW

Avg Cost of

new distribution

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Project No 1 Cost/kW Capacity vs Cost/kW Short fall

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$20/kW

Replace 2.5 MVA Transformer with existing 5 MVA

Install Portable Substation $ 5K

Remove existing 2.5 MVA Transformer $ 20K

Install stock 5 MVA Transformer $ 20K

Remove Portable Substation $ 5K

Total Project Cost $ 50K

Capacity added 2,500KW

Cost per Capacity Added $50,000 / 2500 kW = $ 20 per kW

Cost per Shortfall $50,000 / 500 kW = $100 per kW

@ 10% Growth this last 4-5 years

$100/kW

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Example of Cost per Shortfall

Traditional T&D Substation $6,000,000

Capacity Added 30,000kW

T&D Cost per kW added $ 200/kW

Traditional T&D Substation $6,000,000

Capacity needed (Short fall) 1,000kW

T&D Cost per kW Shortfall $ 6,000/kW

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Keys to DR integration

Real Management Support is a must Name a champion to shepherd the integration Change the measure - $/kW capacity shortfall not $/kW capacity added It’s just like a portable Consider utility, customer, or premium power shared DR Effective use of manpower & resources

– Standardize the design & operation– Construct with a generation knowledgeable contractor

Build community partnerships - a temporary solution with minimum usage

Communicate, Communicate, Communicate

DR is distribution capacity! not generation for generation sake

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Possible DG Solutions

For Maintenance

– Small substation

– Facilitating shutdowns In an Emergency

– Saving or minimizing emergency outage or equipment damage

– Relieving overload or low voltage condition Temporary use

– We can’t get a permanent fix done in time

– DG and Differ Permanent

– Redundant Service

– Long term solution Alternative to T&D Replacement of old generation with DG

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Potential DG Solutions

Utility Owned – Distribution solutions for load relief

Utility and Customer Joint ownership– Premium Power - utility owned DG leased by customer

Utility Benefit – Non Sellback NEGAWATTS or Load offset – Sellback MEGAWATTS or total available DG

Customer Benefit– Standby– Lower rate if interruptible

Customer owned DG – No formal customer relationship exist– Informal request for DG use and/or load reduction have been done

– Negotiated with Water Board and established formal DG lease as a temporary distribution solution

Customer Interruptible– Interruptible rate primarily for generation shortfalls, but….

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Premium Power

Ed Henderson Detroit Edison’s “Premium Power Presentation” Distributed Generation Conference May 6, 2004

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Premium Power Structure

Detroit Edison’s Premium Power Service offers onsite standby generators that can prevent costly disruptions to business and commercial operations

Equipment is installed, owned, operated, & maintained by Detroit Edison

Every project is uniquely tailored to meet customer’s needs

For a simple monthly fee, Premium Power provides the customer with an alternative to a second utility feed

Standard contract length is seven to ten years; contract continues year-to-year thereafter

Provides a dispatchable asset to address generation, transmission and/or distribution constraints

Available to bundled tariff customers only

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Premium Power & Interruptible Rates

Detroit Edison offers interruptible rates to all commercial and industrial customers

– Energy is discounted for ability to interrupt customers in times of system need

– Current electricity market supply exceeds demand, so interruptions have been minimal

– Potential transmission constraints and/or a hot summer could result in interruptions

Interruptible rate discounts on all kWh vary from approximately 10% to 25% depending on tariff

Net effect of Premium Power Service-breakeven to 10% premium

Service guarantee covers tariff performance penalties

Questions & Discussion

Distributed Generation atDTE Energy

Distributed Generation atDTE Energy

Substation ApplicationsTemporary & Maintenance

Circuit ApplicationsEmergency & Temporary

Premium PowerCustomer

Partnership Applications

Technology Testing

Union Lk ENR2000 2MW DieselAdair ENI1000 1MW NG

Emergency ENR2000 2MW Diesel Grosse Ile High School

ENI1000 1MW NG

Wayne State Univ ENI 75 Dialysis Center ENI 150 Service Center ENI 150 & 75

Assumption ChurchENI1000 1MW NG

Substation IslandingENR2000 2MW Diesel

Southfield Solar & Future H Power Park ZBB Flow Battery

Substation Battery Replacement Project

Distribution

Solutions

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Michigan

UnionLk3 2 yr diesel

Adair2 yr NG

RichvilleMaintenance

Grosse Ile5 yr NG

Shores3 yr NG

QuailMaintenance

WayneEmerg diesel

CollinsEmerg diesel

DTE Distribution Solutions

Milford3 yr NG

Water Bd2 yr diesel

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Internal to Distribution CircuitCollins – Previous Emergency Installation

An emergency installation of a 2MW DG ending daily circuit outages forced by overload to 3500 customers on a 13.2 kV multi grounded Y. The $500K spent on an emergency generator and circuit work were roughly equivalent to annual charges for a one year delay of the $6.4M Collins substation project. If planned the this emergency alternative including the DG installation would have been more economical.

Grosse Ile - Current Temporary InstallationA five year project, on high school property, deferring eventual T&D expansion on the island. A $3.8M Grosse Ile 4.8 kV substation expansion project is planned. The project involves bringing in another marine cable feed to the Island. The DG installation cost is $900K.

St. Clair Shores – Current Temporary InstallationA three year project, on church property, to manage loading on a land locked 4.8 kV delta circuit in need of relief before the new $4.0M Erin substation is built. No other cost effective solution existed.

Wayne Circuit – Temporary/Emergency Installation A 4 month installation to provide 13.2 kV circuit relief due to R/W delay in a new $5.2M Zebra Substation Project. No other cost effective

Solution (1 mile of new overhead – $180k) to prevent rotating blackouts to 2100 customers.

Milford – Temporary InstallationA three year project, on School property, to manage loading on a overloaded 13.2 kV Y circuit in need of relief before the new $3.8M Milford substation expansion is built. No other cost effective solution existed.

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Substation Applications

Adair – Previous Temporary Installation

A two year project, a traditional 4.8kV Delta substation expansion solution could not be completed in time to relieve the transformer emergency overload. Costs were approximately breakeven. The substation budget cost was $800k, and DG project was $870k. The DGs installation allowed for the deferral of the substation project an additional year.

Union Lake – Current Temporary Installation

A three year project, traditional Union Lake 4.8kV to 13.2kV conversion project to relieve a exit cable emergency overload could not be completed before summer overload. The equivalent annual cost of the Union Lake conversion project as proposed was $137k ($1.7M over 60 years @ 8%). The equivalent annual cost of the interim DG solution was $61k ($600K over 20 years @ 8%). The DG will allow further deferral of the T&D project.

Quail – Previous Emergency/Maintenance Installation

Islanded small substation Saved 800 customers served from this 4.8kV substation from having 2-10 hour outages and the importing of addition crews in order to repair a 40kV feed damaged by a tornado.

Richville – Maintenance, Islanded small substation

Same situation as Quail above

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Collins ENR 2000 – Emergency 2 MW DG

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Adair ENI 1000 - 1MW DG Installation

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Quail 1.5 MVA, 41.57/4.8 kV Substation2MW Diesel Islanded to perform emergency repairs & maintenance

17.5 miles of radial 41.57kV exposure feedsRichville and Quail Substations Quail Substation (rural substation in Michigan’s Thumb region)68.2 miles of 4.8kV deltaFeeds 571 customers A peak load of 1.4 MVA

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DG Connection Trailer – Dual Voltage, OH/UG Connection, Protection & Communication

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Grosse Ile DC 2842 - 1 MW Nat Gas

DR M0001 - LW E. River, 8PN GraysGrosse Ile Schools

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Shores DC 1770 - 1 MW Nat Gas

DR B0001, St Joan(ext), 5PE Marter Assumption Greek Orthodox Church

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Union Lake DC 1688 - 2 MW Diesel

DR H0004 Union Lake Substation

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Wayne - ENR 2000 Diesel Installation