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Definitions and Abbreviations

In reading this material, the following definitions and abbreviations are generally assumed:

Independent Power
Electric power produced by an entity other than the electric utility in the area.
Independent power, is synonymous with "parallel generation," and "non-utility generation," also known as "NUG." (See below) For further information, see the Related Page on "Background Information" or contact APPrO the Association of Power Producers of Ontario, or contact one of the associations on the Sustainable Energy Organizations List.

Non-utility generation (or non-utility generator) - synonymous with independent power. See NUG below.

Parallel Generation:
Synonymous with independent power and NUG, above.

Private power:
Power produced from privately-owned generation facilities. (Most independent power in Canada is also private power.)

Electric Utility:
An electric power company that operates a power transmission system and has the legal right to produce and sell electric power ina given geographic area. Usually involves some form of legal monopoly over electric services in the geographic area.

Private Utility:
An electric utility that is privately owned, regardless of whether its shares are publicly traded or privately held. (Most US utilities are private, a few Canadian are as well). Synonymous with "IOU" orinvestor-owned utility.

Public Utility:
In Canada, a provincial crown cororation such as Ontario Hydro that is owned by the government. In the US, a public utility may be government-owned, non-profit, co-operatively owned, or a combination of theabove.

Refers to the privatization of ownership of a public utility. Does not necessarily imply the reduction of a utility's monopoly powers,or the purchase of independent power.

Environmental Assessment

Environmental Assessment Board

"Demand Side Management" or energy efficiency

is a highly efficient means of generating heat and electric power at the same time. Frequently displacing energy consumption by making use of heat that would normally be wasted in the process of power generation, it reaches efficiencies that double, and sometimes almost triple, conventional power generation. Although cogeneration has been in use for nearly a century, in the mid-1980s relatively low natural gas prices made it a widely attractive alternative for new power generation. In fact, cogeneration was largely responsible for a major shift in the character of new power plant construction that occurred in the 1980s and continued into the 1990s. Cogeneration accounted for well over half of all new power plant capacity built in North America during that period.

The environmental implications of cogeneration stem not just from its inherant efficiency, but also from its decentralized character. Because it is impractical to transport heat over any distance, cogeneration equipment must be located physically close to its heat user. A number of environmentally positive consequences flow from this fact: Power tends to be generated close to the power consumer, reducing transmission losses, stray current, and the need for distribution equipment significantly. Cogeneration plants tend to be built smaller, and owned and operated by smaller and more localized companies. As a general rule, they are also built closer to populated areas, which causes them to be held to higher environmental standards. In northern Europe, and increasingly in North America, cogeneration is at the heart of district heating and cooling systems. According to some experts, district heating combined with cogeneration has the potential to reduce human greenhouse gas emissions by more than any other technology except public transit.

To understand cogeneration, it is necessary to know that most conventional power generation is based on burning a fuel to produce steam. It is the pressure of the steam which actually turns the turbines and generates power, in a process that is inherently less efficient than cogeneration. Because of a basic principle of physics no more than one third of the energy of the original fuel can be converted to the steam pressure which generates electricity. Cogeneration, in contrast, makes use of the excess heat, usually in the form of relatively low-temperature steam exhausted from the power generation turbines. Such steam is suitable for a wide range of heating applications, and can effectively displace the combustion of carbon-based fuels, with all their environmental implications.

In addition to cogeneration, there are a number of related technologies which make use of exhaust steam at successively lower temperatures and pressures. These are collectively known as "combined cycle" systems. They are more efficient than conventional power generation, but not as efficient as cogeneration, which produces power and heat in a ratio of approximately 2-to-1. Combined cycle technologies can be financially attractive despite their lower efficiencies, because they can produce proportionately more power and less heat. Environmentally, combined cycle systems are more controversial, because they are not as efficient as true cogeneration.

Non-Utility Generation (NUG)
can be defined as electric power generated by a person or company other than the local utility. A "utility" is the company which holds the exclusive or near-exclusive legal right to distribute and retail electricity in a given geographic area. Also known as parallel generation or independent power. Non-utility generation enjoyed high rates growth in North America and around the world since about 1978, moving from almost non-existence to rivalling utility construction in many jurisdictions.

NUG tends to be associated with "alternative energy," renewable energy, appropriate technology, high-efficiency cogeneration, and other systems collectively described as "soft energy technology" by Amory Lovins in Soft Energy Paths. Lovins ascribes the following characteristics to soft energy technology: sustainability, diversity, flexibility, and being matched in scale and energy quality to the end-use. Although there is no absolute reason why non utility generators could not adopt the centralized systems known collectively as "hard technology", economic, business risk, legal, and environmental factors tend to force the centralized technologies into the hands of centralized utilities.

The predominant sources used by today's non-utility generators are natural gas cogeneration, small hydro, wood, wind, solar, and municipal and agricultural waste. The advent of NUG in any one jurisdiction has often been preceded by legislation requiring monopolistic utilities to purchase power from NUGs at negotiated rates.

A key effect of non-utility generation has been to introduce more competition into the power generation business, which had previously been the nearly-exclusive domain of the local power utility. This has had the benefits of dampening power rate increases, and opening a market for sustainable energy technologies that many utilities had been slow to develop on their own.

See also: Lovins, Amory B., Soft Energy Paths: Toward a Durable Peace, 1977, Friends of the Earth, San Francisco

See also Related Page on "Background Information"

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For queries or suggestions, please forward to:
APPrO, PO Box 1084 Station F, Toronto, Ontario, M4Y 2T7 Canada.
Street address: 25 Adelaide St. East, Suite 1602, Toronto, Ontario M5C 3A1
(416) 322-6549 fax 416-481-5785 Internet e-mail: appro@appro.org

Last update: 8 July 2000