At Detroit Edison, We are Creating a 300-MW Virtual Power Plant using customer-owned generation located on the distribution system. These generators, dispersed throughout our distribution system, can be aggregated to act as one plant to provide the lowest-cost solution for peaking capacity. Our DR-SOC, an Internet-based system operation center, takes on a role similar to that of an aggregator by installing and securing Internet-based communication to intelligently operate distributed generators in parallel to our system.

Our integrated resource plan analysis in the Midwest Independent System Operator (MISO) footprint has shown that, for up to 250 hours per year, running an aggregated system of distributed generation (DG) is the lowest-cost option versus building a combustion turbine plant or making a power purchase.

Additionally, through our own work and leveraging the U.S. Department of Energy's Office of Electricity demonstration projects, Detroit Edison — DTE Energy's electric utility — has shown that DG can be used to provide capacity on overloaded distribution circuits, to increase circuit reliability and to aggregate DG capacity for the MISO energy market.

We have begun to create a network of dispatchable customer generating (DCG) assets to add low-cost peaking capacity to our generation mix, with the DCG becoming one of the assets in the stack, along with traditional generating capacity, demand response and energy efficiency.

As a brief overview of the DCG program, Detroit Edison will pay for all fuel, maintenance and repair costs associated with a customer's generator in exchange for up to 250 hours per year of dispatch rights for the contracted 10 years. Detroit Edison also provides 24-hour real-time monitoring, schedules fuel delivery, adds any switchgear or necessary relay upgrades and routinely tests the generators by operating them for short periods under load. The generator will always remain available to back up the customer's facility, and it operates in parallel with Detroit Edison to avoid any service interruption. Routine maintenance and testing helps avoid problems and further assures that the generator will start reliably when called upon.

Initially, we are targeting the 1-MW to 2-MW generation class range. Our goal is to build a 300-MW plant over the next 10 years with a long-range goal of 500 MW. In 2008, our goal is to connect 10 MW of customer-owned generation, but given the initial program response, we should achieve even greater penetration. We have identified several target markets including municipalities, water boards, data centers, universities, hospitals, research and design facilities, and industrial customers. We will be working with both Detroit Edison account representatives and generator manufacturers to develop leads dealing with generation that is already installed on-site and to locate potential new installations.

The DCG program positively impacts the ratepayer, the generator owner and the utility. Individual DCG units also will be available to manage local loading problems. With generation closer to customers' load, the electrical system benefits from lower losses and reduced capacity needs.

Detroit Edison has six mobile generators totaling 8.5 MW used primarily to manage emergency and temporary loading on distribution circuits as an alternative to building additional traditional T&D facilities. Our experience with this mobile fleet of generation has led us to develop a unique way of avoiding the use of a dedicated transfer trip scheme. The method reduces program costs and involves studying the circuit parameters with our distribution engineering workstation planning tool and intelligently managing the ratio between generation and circuit loading to meet a 3-to-1 ratio, as specified in the IEEE 1547 standards. We will apply this experience to our virtual power plant project. As stewards of our environment, we also are considering the use of biodiesel options for this peaking power plant in addition to our corporate initiative to use bio-diesel throughout our diesel vehicle fleet.

DG is a viable solution for many distribution problems — one that can be implemented so both utilities and end users achieve significant benefits, including greater reliability and improved cost efficiency. What will the future hold? With the advanced metering infrastructure Detroit Edison plans to put in place, we will be able to consider smaller DG standby generation customer assets to support the electric system. Even the use of plug-in hybrid electric vehicles in a vehicle to grid application could become a reality.

Haukur “Hawk” Asgeirsson is the manager of Power Systems Technologies at Detroit Edison, DTE Energy's electric utility. He is responsible for integrating distributed resources into the T&D planning and operating process. Since 2002, he has coordinated installation of 20 distributed generation projects to support the Detroit Edison distribution system.