Natural gas prices could limit DR market. (News).(distributed resources)

PALO ALTO, CA--The trend toward distributed resources (DR) could conceivably play an important role in energy markets, says the Electric Power Research Institute (EPRI) Journal Online. While DR can result in lost business for utilities, it can also benefit them by reducing peak power requirements and, more directly, by providing a market for services and products, the article says.

Most studies of the potential market for DR have assumed that long-term gas rates will increase in a gradual and uniform fashion, the Journal continues, but recent experience has shown that natural gas rates can peak at very high rates, as they did in late 2000 and early 2001. An EPRI research project studied the response of the DR market to changes in future gas prices in a range of plausible scenarios, and results suggest that relatively high natural gas prices and non-uniform annual price fluctuations may strongly affect the size and character of the DR market.

EPRI's project team developed four sets of 10-year gas rates. Each scenario has a different set of national wellhead gas rates for years 2002 through 2011. The team then calculated the corresponding state, industrial, commercial, and utility natural gas rates using ratios based on experience from 1996 through 2001. Researchers used this information to assess DR markets using the EPRI-developed DIStributed Power Economic Rationale Selection (DISPERSE) ...