In this report, we present the results of an analytical cost/benefit study of residential "smart appliances" 1 from a utility/grid perspective in support of a joint stakeholder 2 petition to the ENERGY STAR program within the Environmental Protection Agency (EPA) and Department of Energy (DOE). The goal of the petition is in part to provide appliance manufacturers incentives to hasten the production of smart appliances. The underlying hypothesis is that smart appliances can play a critical role in addressing some of the societal challenges, such as anthropogenic global warming, associated with increased electricity demand, and facilitate increased penetration of renewable sources of power. The appliances we consider include refrigerator/freezers, clothes washers, clothes dryers, room airconditioners, and dishwashers. The petition requests the recognition that providing an appliance with smart grid capability, i.e., products that meet the definition of a "smart appliance," is at least equivalent to a corresponding five percent in operational machine efficiencies. It is then expected that given sufficient incentives and value propositions, and suitable automation capabilities built into smart appliances, residential consumers will be adopting these smart appliances and will be willing participants in addressing the aforementioned societal challenges by more effectively managing their home electricity consumption. 1 "Smart Appliances" are capable of either shifting their time of operation or curtailing their operation temporarily upon request. A more detailed definition is presented in Section 1.1.
This document was printed on recycled paper. Executive SummaryCombined heat and power fuel cell systems (CHP-FCSs) provide consistent electrical power and hot water with greater efficiency and lower emissions than alternative sources. These systems can be used either as baseload, grid-connected, or as off-the-grid power sources. This report presents a business case for CHP-FCSs in the range of 5 to 50 kWe. Systems in this power range are considered "micro"-CHP-FCS. For this particular business case, commercial applications rather than residential or industrial are targeted. To understand the benefits of implementing a micro-CHP-FCS, the characteristics that determine their competitive advantage must first be identified. Locations with high electricity prices and low natural-gas prices are ideal locations for micro-CHP-FCSs. Fortunately, these high "spark spread" locations are generally in the northeastern area of the United States and California where government incentives are already in place to offset the current high cost of the micro-CHP-FCSs. As a result of the inherently high efficiency of a fuel cell and their ability to use the waste heat that is generated as a CHP, they have higher efficiency. This results in lower fuel costs than comparable alternative small-scale power systems (e.g., microturbines and reciprocating engines).A variety of markets should consider micro-CHP-FCSs including those that require both heat and baseload electricity throughout the year. In addition, the reliable power of micro-CHP-FCSs could be beneficial to markets where electrical outages are especially frequent or costly. Greenhouse gas emission levels from micro-CHP-FCSs are 69% lower, and the human health costs are 99.9% lower, than those attributed to conventional coal-fired power plants. As a result, FCSs can allow a company to advertise as environmentally conscious and provide a bottom-line sales advantage. As a new technology in the early stages of adoption, micro-CHP-FCSs are currently more expensive than alternative technologies. As the technology gains a foothold in its target markets and demand increases, the costs will decline in response to improved manufacturing efficiencies, similar to trends seen with other technologies. Transparency Market Research forecasts suggest that the CHP-FCS market will grow at a compound annual growth rate of greater than 27% over the next 5 years. These production level increases, coupled with the expected low price of natural gas, indicate the economic payback period will move to less than 5 years over the course of the next 5 years.To better understand the benefits of micro-CHP-FCSs, the U.S. Department of Energy worked with ClearEdge Power to install fifteen 5-kWe fuel cells in the commercial markets of California and Oregon. Pacific Northwest National Laboratory is evaluating these systems in terms of economics, operations, and their environmental impact in real-world applications. As expected, the economic analysis has indicated that the high capital cost of the micro-CHP-FCSs ...
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