Industrial Use of Distributed Generation in Real-Time Energy and Ancillary Service Markets

Industrial consumers of energy now have the opportunity to participate directly in electricity generation. This report seeks to give the reader (1) insights into the various types of generation services that distributed generation (DG) units could provide, (2) a mechanism to evaluate the economics of using DG, (3) an overview of the status of DG deployment in selected states, and (4) a summary of the communication technologies involved with DG and what testing activities are needed to encourage industrial application of DG. Section 1 provides details on electricity markets and the types of services that can be offered. Subsequent sections in the report address the technical requirements for participating in such markets, the economic decision process that an industrial energy user should go through in evaluating distributed generation, the status of current deployment efforts, and the requirements for test-bed or field demonstration projects