A joint venture has entered the Energy Cloud, pioneering new value propositions for stakeholders across the energy value chain. Dubbed edgeGEN, this offering allows energy retailers and commercial and industrial (C&I) facilities to capitalize on real-time economic opportunities on the grid.
edgeGEN consists of Cummins’ natural gas generator sets (gensets) equipped with Tangent Energy’s Tangent AMP distributed energy resource management system (DERMS). The system’s key focus is predicting (and reacting to) customer coincident peak demand, a rare occurrence that can nonetheless represent a significant portion of an electric bill. By focusing on these high-value instances, edgeGEN has the potential to provide high economic value to the grid with a small amount of fuel.
The business case for the product includes value propositions on both sides of the meter. Municipal utilities and energy retailers, the exclusive channel partners for the offering, save costs by incentivizing customers toward desired behavior like cutting demand during peak hours. C&I customers can be rewarded monetarily while in some cases also realizing the benefits of resilient power to ride through outages. Bringing it all together is a financing structure that typically requires no money down from the host facility.
Established Technology in a New Skin
Gensets remain the de facto backbone of many onsite generation systems for several reasons. They are dispatchable quickly any time of day, can have the cheapest levelized cost of energy of any distributed generation (DG) source, and can reliably deliver 1,000 times or more annual energy per square meter than solar PV. They account for 40% of the average microgrid generation capacity in Navigant Research’s Microgrid Deployment Tracker—more than any other technology.
Though some argue that the dramatic cost declines in developing technologies like solar plus storage will lead to the displacement of gensets, we see this convergence as a key opportunity. As intermittent renewables grow, there will be increasing demand for fast-ramping gas generation, as noted in recent reports about California by the National Renewable Energy Laboratory (NREL) and the Union of Concerned Scientists. Additionally, according to a report funded by the German government, distributed natural gas generation must play a growing role in thermal energy storage. Both on- and off-grid, growing access to cheap natural gas is only accelerating this trend.
Offerings like edgeGEN have room to grow. Other DER and demand response can be integrated on the same platform, one that has flexibility to evolve alongside the coming growth in transactive energy. Municipal utilities and energy retailers, especially in areas with high capacity and transmission tags, should consider the value of incorporating smart gensets and complementary DER. Facility owners should consider the offering while also considering the true value of resilient power as a potential bonus. With growing renewables penetration, persistently cheap natural gas, and regulatory bodies recognizing the value of dispatchable DG, the opportunities in this space are promising.
Tags: Distributed Generation, Distributed Natural Gas, Energy Cloud, Generator Sets, Microgrids
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