Independent power producers (IPPs) are non-utility generators (NUGs) that are typically not owned by the national electricity company or public utility. IPPs generate electricity for sale to the national electricity network. They can also sell power to a single third-party via customer via a power purchase agreement (PPA). IPPs may use the national electricity networks distribution system if mechanisms exist to permit this or via a private wire direct to the customer.
The IPP also has the potential being used as a district energy scheme. With district heating schemes heat is recovered from the engines using cogeneration and sold to a local customer or customers. District cooling schemes use absorption chillers to convert heat into cooling that can be used in air conditioning or refrigeration plants.
This third party could be the national electricity company or may be via private wires to a specified company and is typically in grid parallel mode. Investors in IPPs need to ensure security of revenues and fuel supplies. This may be achieved through several mechanisms including PPAs, sovereign guarantees or feed in tariffs.
Gas engines can also be combined with other energy generation or storage technologies as hybrid solutions or as part of a microgrid.
Benefits of gas engines to IPPs
Using gas engines for IPPs has a number of benefits including:
- Facilities can be built as modular solutions consisting of individual engines
- Significant flexibility in ramping up and down power production. An individual engine can operate down to 50% of the full fuel gas input.
- Facilities can be deployed rapidly compared to other major centralised power plants
- Gas engines have high electrical efficiency. Total fuel efficiency can exceed 90% if the unit is established for cogeneration, either linked to a local heat user or district heating network.
- Supporting local electricity grid through distributed generation
- Heat recovery systems can be added to support district heating networks
- Cooling can be generated via absorption chillers to support district cooling networks.
For more information about how gas engines can be used by independent power producers please contact your local Clarke Energy office.