تولید پراکنده کوچک در مقابل عرضه متمرکز: تجزیه و تحلیل هزینه - فایده اجتماعی در بخش های مسکونی و خدماتی

This paper aims at measuring the social benefits of small CHP distributed generation (DG) in the residential and service sectors. We do this by comparing the social costs of decentralised and centralised supplies, simulating “ideal” situations in which any source of allocative inefficiencies is eliminated. This comparison focuses on assessing internal and external costs. The internal costs are calculated by simulating the optimal prices of the electricity and gas inputs. The external costs are estimated by using and elaborating the results of the dissemination process of the ExternE project, one of the most recent and accurate methodologies in this field. The analysis takes into account the main sources of uncertainty about the parameter values, including uncertainty about external cost estimations. Despite these sources of uncertainty, the paper concludes that centralised supply is still preferable to small DG. In fact, the overall range of DG social competitiveness is restricted, even considering further remarkable improvements in DG electrical efficiency and investment costs. The results are particularly unfavourable for the residential sector, whereas, in the service sector, the performance of DG technologies is slightly better.

Restructuring and privatisation of electricity and gas industries is occurring world wide and clearly confirms the general tendency to abandon the traditional organisation based on the operation of large firms. Nevertheless, the impact of the market reforms in terms of social welfare is not clear yet. Although several analyses have been proposed in this field, the results do not converge. In the meanwhile, some recent dramatic events (i.e. the California energy crisis, the collapse of Enron and the black-out in the USA and in several European countries) and some profound changes introduced in those countries firstly promoting liberalisation processes have increased the number of those who question the real benefits of such an organisational change. However, while this issue is still being debated, technological change and innovation offer us the prospect of revolutionary new scenarios. In particular, the performance of the small power technologies (i.e. reciprocating engine and gas turbine) has improved remarkably over the last decade. This has aroused the interest of operators, regulators and legislators in distributed generation (DG), namely, the integrated or stand-alone use of small, modular power generation close to the point of consumption as an alternative to large power generation and electricity transport over long distances. DG can provide several benefits which can be divided into two categories.1 The first includes the so-called structural benefits whose existence does not depend on how markets are organised: avoided electricity transmission costs; reduced energy costs through combined heat and power generation;2 increased power supply reliability, etc. The second category includes the so-called market-related benefits whose extent depends on how markets are organised (e.g. decreased exposure to electricity price volatility). However, the realisation that DG could provide these benefits does not mean that decentralisation is undoubtedly preferable to large power generation, for the following reasons. First, fuel cost saving due to combined heat and power generation and avoided transmission costs might be offset by higher investment costs. Second, despite the higher overall energy efficiency, and consequently reduced greenhouse gases emissions (GHG), DG technologies might involve higher non-GHG emissions (SOx, NOx, particulate, etc.). Third, there are considerable differences between centralised and decentralised technologies in terms of the impact of non-GHG emissions (SOx, NOx, particulate, etc.). These differences might be due to micro-localisation effects. Unlike large power plants (high stack and extra-urban location), distributed technologies have low stacks and might be located in densely populated urban areas. Because of low stacks (emissions at extremely low altitudes), pollutant atmospheric dilution could be lower so that the increases in pollutant concentration close to the plant could be higher than those of a large power plant. Due to location, these high increases in pollutant concentration occur in highly populated areas and seriously damage human health. These combined effects might cause an environmental impact (per unit of pollutant emitted) higher than that of a large power plant. Taking into account these effects, we aim at evaluating what is the real social benefit of energy supply decentralisation. Nevertheless, we do not analyse all the possible typologies of DG. We focus on small DG that is supply decentralisation by means of plants with power size ranging from 5 kW to 5 MW (following the classification3 of Ackermann et al., 2001). Furthermore, we are interested in applications representative of a wide deployment of small DG plants. This implies that we should analyse the residential and service sectors. Therefore, we simulate the application of small CHP DG to a residential building and a hospital (as representative of the service sector).4 Moreover, this choice allows us to verify whether we are moving towards a radically different energy market paradigm. The results showed in this paper are based upon a detailed technical analysis of energy flows of the fuel cycles (centralised and decentralised systems). Environmental externalities are assessed by using the results of the dissemination process of the ExternE methodology,5 one of the most ambitious and internationally recognised attempts at coming up with “true” external cost estimates for the different power technologies (Krewitt, 2002). We are aware such a methodology could be largely imperfect. Nevertheless, we think that it could provide useful and reliable indications when used to compare technological alternatives and when the uncertainty about value estimations can be internalised into the estimating model. Finally, the analysis focuses on a simulation of a particular territorial context, the case of Italy. However, as we will explain in Section 2, this simulation is particularly significant, so that the results obtained can be generalised. The paper attempts to analyse all the issues affecting the comparison between centralised supply and DG: economics of electricity supply (including network effects); economics of combined heat and power generation; economics of supply reliability; valuation of environmental externalities, etc. In particular, the article is organised as follows. Section 2 illustrates the general approach and main assumptions of the analysis. Section 3 focuses on economics of CHP generation, comparing centralised and decentralised supply in terms of energy efficiency, the first rough performance indicator. Section 4 evaluates internal costs and benefits, which are calculated by simulating optimal prices of the electricity and natural gas inputs (by using a specific formulation of the peak load pricing problem). Section 5 focuses on external costs and benefits, which are calculated by using and elaborating the results of the dissemination process of the ExternE project. The results are presented in terms of cumulative probability distribution in order to evaluate the impact of statistical and political uncertainty, mainly regarding the estimation of the marginal cost of atmospheric pollutant emissions. Section 6 analyses the total costs and benefits (internal plus external). Section 7 attempts to verify the robustness of the final results by carrying out a sensitivity analysis and assessing the overall range of DG social competitiveness. In this section, among the other things, we account for the network effects of DG, the problem of electricity and gas transport congestions and the advantages of DG in terms of power supply reliability. The final section summarises the main results of the paper.

This paper has attempted to measure the social value of DG in the residential and service sectors by comparing decentralised solutions to large power supply. The paper seems to support the hypothesis that centralised supply is still preferable to extensive decentralisation. Rather, there is evidence in favour of increasing centralisation through the deployment of the totally electric solution, the heat pump, which emerges as the best technology. Moreover, the overall range of DG social competitiveness is restricted, even considering remarkable improvements in DG electrical efficiency (gas turbine up to 40% and gas engine up to 47%) and investment costs (50% of the current value). The results are particularly unfavourable for the residential sector, whereas, in the service sector, the performance of DG technologies is slightly better. Given this unfavourable framework, we have to ask ourselves why operators, regulators and legislators are so optimistic about small DG development in these sectors. Answering this question would require enlarging the perspective by analysing the influence of market distortions and supporting environmental policies. Market distortions (market power in power markets, as well as inefficient price regulation and energy taxation) might play a fundamental role in raising DG profitability beyond its real social value. Emerging market power might lead to set prices above marginal costs and this strongly raises DG profitability. Inefficient price regulation (via distorted tariff structures) and energy taxation (via “non-pigouvian” taxes) could play a similar role, in this respect. For instance, electricity two-part tariffs with high weight of the variable component (beyond the optimal proportion), as well as (too) high excise taxes on end-use electricity, combined with (too) low taxes on natural gas, could strongly increase DG competitiveness. Further research works in this field might provide empirical evidence of these effects. At the same time, too much emphasis on global environmental effects, and consequently on the extent of energy saving, might distort the perception of the real environmental value of DG. In this respect, despite the uncertainty about the external cost estimations, we have found that the global benefits of DG (due to lower emissions of greenhouse gases-GHG) are counterbalanced by the higher impact of local–regional pollutants (mainly due to NOx emissions). This result has two interesting implications. First, on the policy implication side, it helps us to reflect upon the ambiguity of environmental policies which focus on the reduction of GHG emissions and disregard the possible trade-off between the impact of GW and the impact of the local–regional pollutants (unless one totally denies the rationality of making tradeoffs between intergenerational environmental impacts). Second, on the methodological side, it underlines the importance of the economic evaluations of the environmental externalities (which allows us to compare different kinds of environmental impacts). Regarding this issue, we are aware that methodologies to evaluate external cost might be largely imperfect.37 In our opinion, however, they can provide useful indications when used to compare two technological alternatives and when the uncertainty about their estimations can be internalised in the evaluation model (like we have attempted to do in this paper). Resuming, one needs to be prudent in supporting deep energy supply decentralisation (in particular, up to residential sector). Small distributed plants might be useful in mitigating market power and increasing system reliability (this last advantage is important not only when we consider the normal power outages but also when we account for the risk of deliberate attacks). In several important market segments (i.e. industrial applications), they could really be competitive and in some circumstances (i.e. renewable energy sources), they really improve environmental conditions. Nevertheless, we should realise that, from the social welfare point of view, small DG social benefits are at least uncertain, in the residential and service sectors. Removing technical and economic barriers is welcomed but providing generalised subsides must be carefully evaluated. Finally, we must not conclude our treatment without pointing out two phenomena which could substantially change this framework. First, constraints (due to problems of public local acceptability) on large power generation and electricity transport development could strongly push DG deployment. In this case, DG would be, in fact, the only available solution to meet the increase in electricity demand. However, this also would point out how public risk perception could lead to a sub-optimal social-welfare equilibrium. Second, radical technological change can increase DG performance. We obviously refer to the development of the fuel cells which could reach 70–80% electrical efficiency, with a very low environmental impact (both global and local–regional). Unfortunately, fuel cell investment costs are still too high (1500–2000 USD/kW), so that the economic viability is far to be achieved. In this respect, evaluating social benefits of fuel cell development is certainly another issue which needs to receive attention in future research works in the field of DG economics and policy.