On-Site Diesel Generation- How You Can Reduce Your Energy Costs

Abstract

Interruptible power rates, Utility special rate negotiations, and the emergence of a spot electrical power market all can lead to lower industrial energy costs. The installation of low cost on-site diesel powered generation, or the proposed intention to install, provides the means for obtaining lower purchased power costs. The functionality of a standby power system and its inherent value in the coming free market purchase of electrical energy are added benefits. Project feasibility, conceptual design, on-site generation facility requirements, interconnection requirements, and operation and maintenance costs will be examined. Installation costs in the range of $350 to $400 per KW and operating costs of approximately $0.06 to $0.07 per kWhr compared to purchased power rates determine the feasibility of an on-site generation system. In some cases avoided demand charges offer an opportunity for savings such that special rates are not needed for a feasible project. Depending on the manufacturer, low capital cost diesel generators are available in 1000 to 2000 KW blocks. Capacity requirements determine the number of engines required. Large capacity installations are somewhat restricted by voltage and current ratings. Some variants for multiple engine generator installations will yield greater reliability or lower costs depending on objectives. Specific requirements for basic building blocks of an on-site generation system will be examined as well as an example of a 5,500 KW installation. IEA provides an alternative to installing and operating an on-site generation system. IEA owns and operates diesel standby generation systems for customers, with responsibility for all maintenance and operation as well as associated costs. This allows customers to focus on core business, not the generation of electrical energy.