Modeling and Analysis with Induction Generators, 3rd Edition

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14

Economics of Induction

Generator–Based

Renewable Systems

14.1 SCOPE OF THIS CHAPTER

The vision of the interaction of values, principles, and resource dynamics, of poli-

cies and social effects, constitutes the paradigm of economics, the environment, and

distributed generation. Such a paradigm brings together the views of environmen-

talists, economists, and end users. Environmentalists are interested in maintaining

the equilibrium, renewal, and regeneration of ecosystems; their main perspective is

embodied in the sustainability of natural systems. Economists and market decision

makers are interested in how natural resources or natural services can be used for

human benet. From this perspective, only things useful to human beings have any

value. Standard economic analysis so far does not consider the ecosystem to have

any intrinsic value, whereas the ecological view suggests that natural systems must

be protected independently of their use or economical value to humans. The end user

is interested in converting the available resources into products and services. If elec-

tric energy is good for home and industrial needs, the end user is interested in how

electrical energy will be priced and how reliable its availability will be.

Public utilities sell power to users at tariffs based on historic load demand and invest-

ments made to bring electricity to the end user. Public utilities also regulate how end

users are tied into the distribution system and monitor power quality, reliability, and

harmonic pollution affecting the end user. If the end user is interested in investing in

distributed generation because of reliability, harmonic pollution, or power quality con-

cerns, he or she may not be concerned about the ecological impact. On the other hand,

if the end user is investing in distributed generation of community or small-scale power,

he or she may be interested in keeping up with the environmental issues involved in

the broader impact of such installation. This chapter covers the fundamental economic

ideas that support decision-making criteria for renewable energy systems, particularly

those that need induction generators to convert the energy source into electricity.

14.2 OPTIMAL AND MARKET PRICE OF ENERGY

IN A REGULATORY ENVIRONMENT

A comprehensive understanding of the interaction of the environment and electric

energy users through an economic analysis sometimes binds incompatible perspec-

tives. Electric energy is not found in nature directly (except in lightning and statics).