Capstone Turbine Cost
A Buyer's Decision: Diesel Gensets or Microturbines?
March 12, 2001
Supervisors in Ventura County, California, began investigating the possibility of upgrading their facility's 22-year-old, diesel generator-based backup power system after having to rely on it 27 times since June 2000. The county's Government Center participates in Southern California Edison's interruptible rate program, which gives the facility a lower year-round electric rate in exchange for curtailing its utility usage when requested. In January alone, the Government Center had its utility supply interrupted during 14 days. The county's existing backup system needs to be replaced due to age and inefficiency.
A county General Service Agency report recently recommended purchasing six to nine new diesel generators at a price tag of $4 million. The report dismissed microturbines, fuel cells, and photovoltaics as too expensive. The report calculated that a fuel cell-based system would cost the county $20 million, while photovoltaics could cost up to $55 million. Delivery and installation time was also a major driver for recommending the diesel generators. However, a presentation by Capstone California's president Mike Tingus persuaded the board of supervisors to reconsider microturbines as a possible option.
Tingus said Capstone could provide 67 natural gas-fired microturbines and have them installed by the summer for a total cost of $4.8 million (about $71,642 per microturbine). That cost could be cut by $2 million under a state rebate program for cleaner energy sources. For the Ventura County Government Center, one advantage of installing microturbines rather than diesel generators is that, due to air regulations, the diesel generators would only be allowed to operate for less than 200 hours per year. The microturbines would not face that restriction. Whereas the diesel generators would only be able to operate to "keep the lights on" during a blackout, microturbines would also be able to operate when grid electricity prices are high. Therefore, one of the county supervisors promoted microturbines as being a more flexible backup system.
During the meeting, board members expressed a number of doubts about pursuing microturbines, questioning their reliability and the impact of rising natural gas costs. Tingus addressed these concerns by explaining the annual maintenance requirements of microturbines (a spark plug and air filter replacement) and noting that natural gas prices would likely be far cheaper in the summer months than in the winter. One council member suggested that the microturbine purchase could be overkill, believing the electricity shortage could end later this year when new power plants go on-line.
At the conclusion of the meeting, the board voted to pay a consulting company $60,000 to begin making architectural and engineering plans for installing the diesel generators, but it also voted unanimously to order its staff to further research the option of installing microturbines or a combination of diesel generators and microturbines. |
