The City of Grande Prairie in Alberta, Canada, is on the cutting edge of technology. Touting itself as Alberta's first "cyber city," it experienced a 9% population growth in the last two years and now is home to 40,000 people. Located northwest of Edmonton, Grande Prairie is the metropolitan service center of northwestern Alberta, supporting a combined population of more than 250,000 people within a 124-mi. (200-km) radius. Forestry, agriculture, oil, and natural gas provide the principal industries within the region, and several of the major forest-product companies are located in Grande Prairie. Weyerhaeuser operates a large industrial plant that manufactures kraft pulp and dimensional lumber and is Grande Prairie's second major employer. Canadian Forest Products Ltd., Ainsworth Lumber Co. Ltd., Risley Manufacturing Ltd., and Sterling Pulp Chemicals Ltd. also have major industrial facilities in or near the city.

As in many municipalities, Grande Prairie operates its own water and wastewater treatment facilities. And as is often the case, these facilities are tremendous users of electricity, representing approximately one-third of the entire electrical usage for all city facilities combined. "We are always looking at ways of reducing our energy costs," says Bernd Manz, general manager for Aquatera Utilities Inc., the city's municipal utility corporation.

In 2002, the wastewater treatment plant used 6,785,305 kWh, and the water treatment plant used 1,797,370 kWh, for a total usage of 8,582,675 kWh. According to Manz, Grande Prairie began to explore various options for reducing this power consumption and concurrent cost. At about the same time, Westport Innovations Inc. of Vancouver, BC, contacted the city regarding a potential pilot project involving the company's gas-fired generator. "It seemed to fit with us in terms of trying to reduce our power costs, so we agreed to pilot their generator on-site here," says Manz. "We would operate it over the course of a year and at the end of the year have the option of purchasing that generator."

"Westport started as a technology development firm and continues [as such] today but has broadened out a little bit," says Bruce Hodgins, vice president of business development for the company. "The primary technology that Westport started with was direct-injection technology of gaseous fuels in diesel engines. The idea was to retain all the advantages of a diesel-cycle engine but [have] much lower emissions with the ability to use a fuel that quite often is cheaper than diesel." Much of this research occurred in the late 1980s and early 1990s at the University of British Columbia in Vancouver.

According to Hodgins, the technology involved in the Grande Prairie pilot is based on the Cummins QSK60 project. This combines a 16-cylinder, 60-lit. engine matched to a 2-MW generator in standby rating with 1.8 MW of prime generation and 1.6 MW of continuous generation. It is projected to operate at approximately 85% lower NOx and 20% less greenhouse gas–emission levels than a diesel-fueled equivalent without requiring aftertreatment. Release of particulate matter has been cut to less than 50% of the Environmental Protection Agency's 2006 Tier 2 emissions standards.

Cutting Edge Means Cutting Tape
Originally the pilot project was conceived to offset some of the electricity being purchased from the electrical grid, but in order to fully assess the pilot program's results, it was necessary to establish a separate generation unit. "Initially the intent isn't to separate ourselves from the grid," says Manz. "For the pilot project, we're effectively putting all of the [generated] power back onto the grid and continuing to receive our power [for the treatment facilities] from the grid. With the deregulated energy market, we're able to sell all of that energy into the power pool. That's the way it's working for us right now."

Depending on the success of the pilot, the distributed-generation system eventually would allow the city to self-generate. "If we were to be entirely self-sufficient from the grid, we would need more than one generator for backup purposes," says Manz. "But transmission-and-distribution costs are a significant portion of our total power bill, and if we were able to self-generate, we would avoid those costs. The cost of generation is somewhat dependent on the spread between power costs and natural-gas costs. Part of the evaluation over the course of the year are those economics in terms of whether it makes sense for us to continue to do that. But the premise was that if this becomes a permanent facility, we would avoid—by self-generating—the vast majority of our transmission-and-distribution costs and end up with lower energy costs overall."

Grande Prairie's entrance into the distributed-generation field required a variety of approvals from various regulatory agencies. In some cases, the approval process was actually in a state of fluctuation during this time. This made it more challenging. "With the Alberta energy environment, it's being deregulated," states Manz. "Some of those approval processes actually changed over the course of getting all the various approvals we needed. We needed approvals from our energy and utilities board and from Alberta Environment, the provincial environment regulator. There's also a transmission administrator and a power pool." A total of six agencies were involved in the approval process.

The system was put on-line in October 2003, and initial results are positive. At the time of the interview, according to Manz, it had been "running for about a month. There is a lag between knowing what we get for revenue and what our monthly billing is, so we don't have a lot of good data at this point to know exactly how the payback is going to look. We are operating at about eight hours a day and ideally would like to operate longer if that were to become a permanent installation. This does allow us to monitor a bit of the reliability of the generator as well as the type of revenue that we would be able to generate for it once both our expenses and the revenue are known."

Expectations for success are high since the distributed-generation system marries two systems with long histories and mature developments. "The key advantage is the high efficiency of the unit," states Hodgins. "Its power density matches diesel and the life cycle costs. Those factors are going to have an advantage over the existing technologies. Another benefit is the responsiveness to change in loads. This is a direct-injection engine and is very similar to a diesel engine, and its ability to react to changing loads is equivalent [to] or better [than] today's diesel engines. So it also could be used in standby-type applications where there are very high load swings."

Maintaining this equipment is not difficult, reports Hodgins. "It's very similar to the diesel technology. Therefore, for people who understand diesels, this is a very simple system to understand. It doesn't add an ignition system and other complexities that make it quite a bit different than the diesel engines they are working on today. It really just uses a different fuel."

Dealing the Deck
Deciding whether distributed generation is appropriate requires a careful analysis of various factors, says Hodgins. "Once you've got a site that you know the requirements for, you then need to look at how that's going to be operated. It really gets down to a life cycle cost exercise, which I think is pretty straightforward. But looking at the cost of your inputs, the one variable that often is hard to value is the reliability improvement that you might get. Ultimately I think it gets down to [this]: What are my life cycle costs of operating this unit? Those costs get a lot easier if you have a unit on-site for standby or for power that is now used for peak shaving or for taking advantage of fuel and electricity prices that move around. Being able to generate electricity gives you some flexibilities that make that decision easier to make. But ultimately I think for most people it gets down to the life cycle cost of it. And under that, you obviously have to meet emissions regulations and so on. Comparison of your options is what it comes down to."

Both Manz and Hodgins are excited about this pilot project and see distributed generation growing into the future. "I see it as an analogy to the model of PCs versus [the] mainframe to computing," Hodgins continues. "Today most of the power is from large central stations with long transmission lines, stations, and substations. Distributed generation is putting the power production close to the sources that are utilizing them. By networking these distributed-generation systems together, you can have a system that's supported and very reliable. As we move forward in places like North America that have established grid, there are challenges with increasing [urgency for] the current facilities to provide more power and also the upgrades that might be needed for distribution systems. We think that going into a distributed model may be cheaper in the long run than doing those things with fewer losses. There are more and more difficulties in permitting these large plants or in getting the rights of way for these transmission power lines. We think it would make sense at least to look at the option of having the distributed generation."

Using natural gas as a fuel source provides a great deal of convenience, especially if distributed generation is included in the design for a building. "Having it integrate into the building is certainly the way to go," states Hodgins. "A natural-gas fuel source is plumbed through the building anyway for heating and air conditioning, so usually you have access to that and don't have to have separate storage of diesel fuel at the top of the building. There could be some advantages to that system by integrating it today."

A downside to using natural gas as a fuel source for distributed generation is concern about its current supply and pricing, but Hodgins doesn't see this as a real issue. "I'm quite amused by these pronouncements of this big problem when there is so much more gas today than there are petroleum resources. There is a huge supply of natural gas. What we are seeing in the North American market is a temporary supply problem where just getting it from these resources to the users is constricting the ability. If you look worldwide, gas supplies and gas reserves are much higher than [those of] petroleum. So it's surprising to me that there is so much focus on [not having] enough natural gas. We have a good supply; we have to get it to the markets in the right quantities."

Manz sees opportunities to create synergisms for additional energy savings. "One of the interesting opportunities with this generator is the opportunity to improve its efficiency by using the heat that's generated [for] our facilities. We've done a feasibility study using the waste heat from the generator and being able to offset our heating costs and using that heat to increase the overall efficiency. The district heating component of using all of that heat from the generator improves the overall cost benefit from it as well."

Distributed generation isn't the only area Grande Prairie is exploring. "We also just had a ground break on a cogeneration plant that would use waste (hog fuel) from a sawmill and generate electricity and heat," Manz reports. "We've had at least a couple of those types of projects occur here in the city or close to the city within the last year. Distributed energy is going to grow significantly. I think that the future for distributed natural-gas–fired generation is going to be somewhat influenced by the future costs of natural gas. We've seen increasing trends in the cost of natural gas, and it's the difference between natural-gas costs and electrical costs that really makes this technology viable. It depends on where natural-gas costs are going to go in terms of this particular generating unit and its future viability. But I think there is a great future for the distributed-power generation. Certainly the type of blackouts that occurred earlier this year in eastern North America add more reasons for looking at alternatives to centralized generation."

LYNN MERRILL is director of public services for the City of San Bernardino, CA.

DE - Jan/Feb 2004