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The Benefits of RICEs in Distributed Generation

In the rapidly evolving power generation market, many power producers are looking for new solutions to overcome the present challenges.

By Christopher Marks, PE, Burns & McDonnell

In the rapidly evolving power generation market, many power producers are looking for new solutions to overcome the present challenges. Large base-loaded facilities are giving way to smaller distributed renewable and natural gas-fired sources of generation. This shift has created an opportunity for different technologies to take more prominent roles in the market. Among these are natural gas-fired, medium-speed reciprocating internal combustion engines (RICEs).

Historically, RICEs have played a minor role in the power generation market, with low output, high-speed RICEs being used as backup sources of generation for industrial facilities and hospitals utilizing liquid fuels. However, manufacturers such as Wärtsilä, Caterpillar, GE, Fairbanks-Morse, Mitsubishi, and Rolls-Royce are seeing increased demand for larger, medium-speed RICEs. These are based on mature technology, can output 4-20 megawatts electrical (MWe) and offer higher reliability, lower emissions, and higher efficiency than their smaller, higher-speed counterparts.

In fact, many power producers are discovering the advantages of using RICEs for distributed generation. This model allows power producers to “right-size” their projects, compete in the ancillary service markets, and provide flexibility to respond to market volatility.

Many municipal utilities purchase power through a Power Purchase Agreement (PPA) with another producer. However, this arrangement is not always optimal for the utility or its customers. PPA pricing typically tracks the market cost of electricity, so imbalances in the market are, unfortunately, passed along to consumers through increased costs. By installing RICEs, many municipal utilities have been able to obtain a controllable asset at a competitive cost that can provide generation at the right time and right place. This helps to mitigate spikes in power pricing that would otherwise be passed along to customers. Instead, the municipal utility is able to produce power at a more stable cost, generate savings, and potentially create profitable revenue opportunities to further reduce costs to customers. RICEs are also a viable option for replacing retired generating assets, such as gas boilers, that are no longer competitive due to diminishing heat rates or environmental restrictions.

Similarly, RICEs offer an attractive solution for power producers to install “right-sized” generation for a dedicated user, such as a municipality or industrial user, through a PPA. RICEs occupy a relatively small plant footprint and can be co-located with an existing user to provide the power required. During times when that user does not demand full plant output, the remaining capacity can be shut down or sold on the open market.

Additionally, RICEs allow power producers to compete in the ancillary service markets available in some regional transmission organizations (RTOs), and those which may become available or more valuable in the future. RICEs offer a very flat efficiency across their output curves, meaning that part-load heat rates are very favorable for spinning reserve and precise load-following applications. In fact, the low output per shaft, compared to other technologies, is actually a great benefit for load-following. Since each individual engine is capable of ramping from minimum load to full load in just a few minutes, the entire facility can respond just as rapidly to changes in demand. In keeping with the high ramp rate, RICEs require less than ten minutes to reach full load after receiving the start command. This makes them favorable options for providing black start and non-spinning reserve, as well.

Furthermore, RICEs offer opportunities for load growth in markets that are otherwise saturated with generation. Due to recent increases in renewable and gas generation, coupled with the large amount of base-load coal generation scheduled for decommissioning, market volatility is a factor for many power producers in planning future projects. With rapid start and ramp rates, RICEs allow power producers to take full advantage of price spikes even with a low capacity factor of 15-20 percent.

Although relatively new to the utility-scale power generating industry, RICEs have proven themselves to be a valuable part of many producers’ portfolios. They are a mature and reliable technology offering high availability and flexibility. Due to the relatively small output, flat efficiency curve, and high ramp rates, RICEs offer an attractive solution for many challenges facing the power generation market. In applications demanding a competitive optimally sized solution, participation in the ancillary services markets, or load-following capability, RICEs show their value regardless of the intended capacity factor.

 

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