Techno-Economic Comparison between Centralized and Distributed Energy Resource Systems: A Case Study of an Underground Transportation Infrastructure System in Changsha, China

Abstract

Due to their higher energy efficiency and better economic performance, distributed energy resource (DER) systems are expected to be one of the main energy supply forms in the future and have gained increasing attention in recent years. Thus, there is a need to boost our understanding of how to apply DER systems in different types of actual cases. This paper investigates a techno-economic analysis of a DER system applied in a real case in a hot-summer and cold-winter zone in China, where the climate is considered to be Cfa according to the Köppen–Geiger climate classification system. An urban underground transportation infrastructure system located in Changsha (China) was chosen to analyze the techno-economic performance of a natural-gas-fired DER system in comparison with a centralized energy system (CES). First, a scientific and reasonable application program of the natural-gas-fired DER system was developed by an overall load analysis (electric load, air-conditioner load, and domestic hot water load during the operating period). Based on this load analysis, this research combined the energy consumption and the actual operating situation and then compared and analyzed different types and capacities of equipment in this case. Moreover, a comprehensive analysis of the economic benefits was estimated by comparing the natural-gas-fired DER system with conventional CESs. Overall, the total annual cost of the DER system was reduced by 18.73%, and its additional investment can be paid back within about 2.2 years. A better economic benefit was achieved by applying the natural-gas-fired DER system in an actual case, which will help encourage the widespread application of DER systems.

1. Introduction

Currently, building energy consumption accounts for more than 65% of primary energy consumption and over 70% of greenhouse gas (GHG) emissions [1]. The accelerated growths of energy demand and pollutant emissions are great economic and environmental challenges for developing countries, especially China [2]. Thus, distributed energy resource (DER) systems have been increasingly applied to supply power at the local community level [2]. DER systems enable the adequate improvement of energy efficiency and a substantial reduction in pollutant emissions with an economical cost [3].

A DER system, in contrast to a centralized energy system (CES), refers to a small–medium scale energy conversion and a supply system installed with the nearest distance to the end users. It can produce energy in local areas, serve the end users directly [4], and, at the same time, be a guarantee for the energy supply of a CES [5]. Developing DER systems is a positive way to optimize the national energy structure, to save energy, to reduce emissions, and then to realize sustainable development. Due to these benefits, a large number of scholars and researchers have focused on their advantages. Considering the social, environmental, and economic impacts, DER systems propose optimizing and upgrading a more integrated and sustainable energy structure by realizing the “cascade utilization” of energy resources [6,7,8]. Furthermore, the method of generating energy in local areas will reduce a large part of the transmission losses on account of shortening the distance between the generator and users [9,10]. In general, a potential utilization of energy with an overall efficiency of 70–85% can be predicted [8,11,12]. Additionally, the CES method produces higher levels of GHGs and other polluting gas emissions, which increases the environmental pressure [13]. Compared to a CES, DER systems bring about decreased carbon emissions [14]. Moreover, as a more decentralized energy production mode, DER systems can be treated as a method of supplementing and assuring the central power provider. The mode of locally produced and consumed energy can greatly reduce power outages from a CES [9,15].

Economic efficiency, as a significant advantage of DER systems, is also quite attractive. The reductions in the primary energy demand and facilities of power grids, conversions, or substations enable DER systems to provide a higher economic efficiency, which is a significant advantage of them [16]. Meanwhile, the DER mode proposes a transformation of the economic structure in the energy supply system [17]. The end users become not only consumers but also producers [18]. Ye et al. [19] evaluated the energy and cost performances of DER systems and CESs, which showed that the energy cost of the DER system was significantly reduced by 20~30%. Mandloi et al. [20] discussed the energy management strategy with a DER system and proposed a model for its cost optimization. Babagheibi et al. [21] discussed how to optimize the economic profit of and to provide flexibility services to micro-grids by implementing DER systems and building a local flexibility market so as to ensure the safety and reliability of the distribution system. Rodriguez-Molina et al. [22] examined four different business models for applying a DER system. Yang et al. [23] compared the relationship between the investment and return of a DER system through estimating the total costs of energy, equipment, and operation. Zhang et al. [10] conducted a sensitivity analysis of natural gas price and pool purchase price (PPP), providing strong support for national policy surrounding DER systems in China. Eid et al. [24] presented a novel approach to identifying the cost of electric flexibility from DER systems, comparing it with traditional markets, and they conducted a useful techno-economic analysis of flexibility for DER systems and the traditional method through a case study in the Netherlands. Li et al. [25] formulated coordination frameworks to deeply analyze the techno-economic and environmental performance of DER systems. Bacca et al. [26] provided a mixed-integer optimization model to evaluate the influence of the cost and allocation of a renewable energy project in a smart grid environment. Xu et al. [27] built a semiparametric regression model to reveal the possible nonlinear relationships between economic variables in order to investigate DER systems in China.

In this paper, an urban underground transportation infrastructure system, located in Changsha (Hunan, China), was chosen to analyze the techno-economic performance of a DER system, comparing it with a CES. Changsha is located in a hot-summer and cold-winter climate zone and has a typical subtropical monsoon humid climate (Köppen–Geiger: Cfa), similar to the majority of the areas of the middle and lower reaches of the Yangtze River. This climate type has a large temperature difference throughout the year, while the heating load in winter and the cooling load in summer are both at a relatively high level. It has been proven that the application of a DER system in this climate condition could better provide its advantages [3]. Therefore, choosing this city for the case study shows the significant effect of applying a DER system.

The energy resource of a DER system can be either traditional fossil energy, such as coal, oil, and natural gas, or renewable energy, such as solar energy, wind energy, geothermal energy, and biomass energy [2]. In practical applications, DER systems usually take natural gas as the main source and partly combine ground-source heat pumps, photovoltaic power generation, or other auxiliary modes according to the environmental conditions of the specific projects. Considering the generality of the research, we chose natural gas as the resource of the DER system in this case, and we temporarily ignored the auxiliary mode of renewable energy limited by specific environmental conditions. A tri-generation system, namely, a combined cooling, heating, and power (CCHP) system, was set as the operating mode of the DER system. This type of system can meet the electric, heating, and cooling demand simultaneously in a single process. The electricity is generated by burning natural gas with a power generation unit (PGU), and the waste heat of the generation process is used to supply the heating and cooling demand, such as the exhaust gas or the cooling water with a high temperature [10]. Because of their characteristics of higher energy efficiency, CCHP systems have been widely used in DER systems [28]. Despite these studies, to our knowledge, no studies have investigated the concrete performance of DER system application in an underground infrastructure system in the hot-summer and cold-winter zone in China.

This paper aimed to analyze the technical performance of a natural-gas-fired DER system in different equipment and configuration methods in order to compare the techno-economic benefits between a CES and a DER system. The findings of this analysis provide valuable insights into the potential of DER systems in meeting the energy needs of modern society while also highlighting the need for further research and development to optimize their performance and ensure their widespread adoption. As such, this paper serves as a guiding reference for decision-makers, engineers, and energy enthusiasts interested in exploring the possibilities offered by DER systems.

2. System Description

This paper studied a natural-gas-fired DER system applied in a municipal underground transportation infrastructure system. To evaluate the techno-economic performance, we compared the DER system in this case with a conventional CES in China as a reference system. Figure 1 shows the schematics and energy flows of the DER system mode in contrast with reference system mode. The green part on the right is the DER system mode, while the red part on the left is the CES mode. The energy of the end users includes the following: electric power demand for lights and equipment, E; heating demand for space heating in winter and domestic hot water all year round, Q_h; and cooling demand for space cooling in summer, Q_c. Section 2.1 and Section 2.2 give detailed descriptions of the reference system and the DER system, respectively.

2.1. Description of Reference System

The conventional CES is used in this study as a reference system to compare and evaluate the techno-economic performance of the natural-gas-fired DER system. As shown in the left part of Figure 1, in this mode, a heating ventilation air-conditioning (HVAC) system supplies the heating and cooling demand of the end users. The total electricity consumed directly by the users and by the HVAC system is purchased from the centralized power grid. According to ref. [29], the energy flow of the CES can be described as follows.

The high-voltage electricity from the central grid needs a substation transition to low-voltage electricity. Considering the energy loss caused by the transition, the total electricity energy from grid in this mode, ${\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{C}\mathrm{E}\mathrm{S}}$, is:

$${\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{C}\mathrm{E}\mathrm{S}}=\frac{{\mathrm{E}}_{\mathrm{s}\mathrm{u}\mathrm{b}}}{{\mathsf{\eta }}_{\mathrm{t}}}=\frac{\mathrm{E}+{\mathrm{E}}_{\mathrm{h}\mathrm{v}\mathrm{a}\mathrm{c}}}{{\mathsf{\eta }}_{\mathrm{t}}}$$

(1)

where E_sub is the total electrical energy after being transitioned by the substation, E_hvac is the electricity supplied to the HVAC system, and η_t is the transition efficiency.

The electricity needed by the HVAC system can be replaced as follows:

$${\mathrm{E}}_{\mathrm{h}\mathrm{v}\mathrm{a}\mathrm{c}}=\frac{{\mathrm{Q}}_{\mathrm{c}}}{{\mathsf{\delta }}_{\mathrm{c}}^{\mathrm{C}\mathrm{E}\mathrm{S}}}+\frac{{\mathrm{Q}}_{\mathrm{h}}}{{\mathsf{\delta }}_{\mathrm{h}}^{\mathrm{C}\mathrm{E}\mathrm{S}}}$$

(2)

where ${\mathsf{\delta }}_{\mathrm{c}}^{\mathrm{C}\mathrm{E}\mathrm{S}}$ and ${\mathsf{\delta }}_{\mathrm{h}}^{\mathrm{C}\mathrm{E}\mathrm{S}}$ are the coefficients of the performance of the cooling and heating units in the electric HVAC system, respectively.

The fuel energy consumption in the reference mode, F^CES, is:

$${\mathrm{F}}^{\mathrm{C}\mathrm{E}\mathrm{S}}=\frac{{\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{C}\mathrm{E}\mathrm{S}}}{{\mathsf{\eta }}_{\mathrm{e}}{\mathsf{\eta }}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}}$$

(3)

where η_e and η_grid are the electricity generation efficiency and the grid transmission efficiency, respectively.

Thus, the total fuel energy consumption in the reference mode can be calculated as:

$${\mathrm{F}}^{\mathrm{C}\mathrm{E}\mathrm{S}}=\frac{\mathrm{E}}{{\mathsf{\eta }}_{\mathrm{e}}{\mathsf{\eta }}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}{\mathsf{\eta }}_{\mathrm{t}}}+\frac{{\mathrm{Q}}_{\mathrm{c}}}{{\mathsf{\eta }}_{\mathrm{e}}{\mathsf{\eta }}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}{\mathsf{\eta }}_{\mathrm{t}}{\mathsf{\delta }}_{\mathrm{c}}^{\mathrm{C}\mathrm{E}\mathrm{S}}}+\frac{{\mathrm{Q}}_{\mathrm{h}}}{{\mathsf{\eta }}_{\mathrm{e}}{\mathsf{\eta }}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}{\mathsf{\eta }}_{\mathrm{t}}{\mathsf{\delta }}_{\mathrm{h}}^{\mathrm{C}\mathrm{E}\mathrm{S}}}$$

(4)

2.2. Description of Natural-Gas-Fired DER System

Natural-gas-fired DER systems are an important trend that can increase energy efficiency by achieving an energy cascade utilization, which can help in realizing sustainable development. A DER system uses natural gas as its primary energy source and arranges the power equipment close to the end users. It is often operated as a tri-generation energy supply system, namely, a CCPH system, which comprises a cooling system, heating system, and power system.

The right part of Figure 1 illustrates the energy flows and supply principle of the DER system in this study. The operating principle of the DER system is to generate electricity by burning natural gas and to then recover and reuse the waste heat, including the high-temperature exhaust gas and cooling water. Thus, the natural-gas-fired DER system is composed of two central energy supply equipment units: the prime motor, also known as the PGU, and the waste heat reutilization unit (WHRU), including a heat exchanger (HE), a hot-water-driven absorption chiller (AC), etc. The AC in the cooling system utilizes the recovered heat from the PGU and produces cooling to meet the cooling demand, while the heating system exchanges the waste heat from the PGU to meet the heating demand. In addition, the central grid supplements electricity when the DER system does not produce enough to meet the electricity demand. Alternatively, the electricity generated by the DER system can be sold back to the grid while producing excess electricity. The energy consumption of the natural-gas-fired DER system can be calculated as follows [30].

The equation of the electricity in the DER system mode is:

$$\mathrm{E}+{\mathrm{E}}_{\mathrm{a}\mathrm{d}}={\mathrm{E}}_{\mathrm{p}\mathrm{g}\mathrm{u}}+{\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{D}\mathrm{E}\mathrm{R}}-{\mathrm{E}}_{\mathrm{e}\mathrm{x}}$$

(5)

where E_ad is the additional electricity consumption of the equipment in the DER system, such as pumps, E_pgu is the electricity generated by the PGU in the DER system, ${\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$ is the supplemental electricity from grid when E_pgu is not enough, E_ex is the excess electricity generated by the PGU and sold back to the grid, and ${\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$ and E_ex cannot occur simultaneously.

The electricity generated by the PGU and the supplemental electricity from grid are calculated, respectively, as follows:

$${\mathrm{E}}_{\mathrm{a}\mathrm{d}}={\mathrm{F}}_{\mathrm{p}\mathrm{g}\mathrm{u}}{\mathsf{\eta }}_{\mathrm{e}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$$

(6)

and

$${\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}^{\mathrm{D}\mathrm{E}\mathrm{R}}=\mathrm{E}+{\mathrm{E}}_{\mathrm{a}\mathrm{d}}-{\mathrm{E}}_{\mathrm{p}\mathrm{g}\mathrm{u}}={\mathrm{F}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}{\mathsf{\eta }}_{\mathrm{e}}{\mathsf{\eta }}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}$$

(7)

where F_pgu is the fuel energy consumption of the PGU in the DER system mode, F_grid is the fuel energy consumption for supplementing electricity by the gird, and ${\mathsf{\eta }}_{\mathrm{e}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$ is the PGU generation efficiency.

The waste heat produced by the PGU, Q_pgu, is:

$${\mathrm{Q}}_{\mathrm{p}\mathrm{g}\mathrm{u}}={\mathrm{F}}_{\mathrm{p}\mathrm{g}\mathrm{u}}(1-{\mathsf{\eta }}_{\mathrm{e}}^{\mathrm{D}\mathrm{E}\mathrm{R}})$$

(8)

The heat recovered by the waste heat recovery system, Q_r, is:

$${\mathrm{Q}}_{\mathrm{r}}={\mathrm{F}}_{\mathrm{p}\mathrm{g}\mathrm{u}}(1-{\mathsf{\eta }}_{\mathrm{e}}^{\mathrm{D}\mathrm{E}\mathrm{R}}){\mathsf{\eta }}_{\mathrm{r}}$$

(9)

where η_r is the efficiency of the waste heat recovery system.

The heat supplied to the cooling and heating system is:

$${\mathrm{Q}}_{\mathrm{r}}={\mathrm{Q}}_{\mathrm{r}\mathrm{c}}+{\mathrm{Q}}_{\mathrm{r}\mathrm{h}}$$

(10)

where Q_rc and Q_rh are the heat supplied to cooling and heating system, respectively.

The heat required by the AC of the cooling system in the DER system mode, Q_c, is:

$${\mathrm{Q}}_{\mathrm{c}}={\mathrm{Q}}_{\mathrm{r}\mathrm{c}}{\mathsf{\delta }}_{\mathrm{c}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$$

(11)

where ${\mathsf{\delta }}_{\mathrm{c}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$ is the coefficient of performance of the hot-water-driven AC.

The heat produced by the HE of heating system in the DER system mode, Q_h, is:

$${\mathrm{Q}}_{\mathrm{h}}={\mathrm{Q}}_{\mathrm{r}\mathrm{h}}{\mathsf{\eta }}_{\mathrm{h}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$$

(12)

where ${\mathsf{\eta }}_{\mathrm{h}}^{\mathrm{D}\mathrm{E}\mathrm{R}}$ is the efficiency of the HE.

Therefore, the total fuel energy consumption in the DER system mode, F^DER, can be calculated as:

$${\mathrm{F}}^{\mathrm{D}\mathrm{E}\mathrm{R}}=\frac{\mathrm{E}+{\mathrm{E}}_{\mathrm{a}\mathrm{d}}-{\mathrm{E}}_{\mathrm{p}\mathrm{g}\mathrm{u}}}{{\mathsf{\eta }}_{\mathrm{e}}{\mathsf{\eta }}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}}+\frac{{\mathrm{Q}}_{\mathrm{c}}}{(1-{\mathsf{\eta }}_{\mathrm{e}}^{\mathrm{D}\mathrm{E}\mathrm{R}}){\mathsf{\eta }}_{\mathrm{r}}{\mathsf{\delta }}_{\mathrm{c}}^{\mathrm{D}\mathrm{E}\mathrm{R}}}+\frac{{\mathrm{Q}}_{\mathrm{h}}}{(1-{\mathsf{\eta }}_{\mathrm{e}}^{\mathrm{D}\mathrm{E}\mathrm{R}}){\mathsf{\eta }}_{\mathrm{r}}{\mathsf{\eta }}_{\mathrm{h}}^{\mathrm{D}\mathrm{E}\mathrm{R}}}$$

(13)

2.3. Economic Evaluation Criteria

To quantifying compare the economic performance of the DER system and the reference centralized system, the annual total cost saving rate, which is defined as the ratio of the DER system’s annual total cost saving compared to the centralized system’s annual total cost, was chosen as the economic evaluation criteria [10].

The annual total cost saving rate, R_ATCS, is:

$${\mathrm{R}}_{\mathrm{A}\mathrm{T}\mathrm{C}\mathrm{S}}=\frac{{\mathrm{A}\mathrm{T}\mathrm{C}}^{\mathrm{C}\mathrm{E}\mathrm{S}}-{\mathrm{A}\mathrm{T}\mathrm{C}}^{\mathrm{D}\mathrm{E}\mathrm{R}}}{{\mathrm{A}\mathrm{T}\mathrm{C}}^{\mathrm{C}\mathrm{E}\mathrm{S}}}$$

(14)

where ATC^CES and ATC^DER are the annual total cost of the centralized system and the DER system, respectively.

The system’s annual total cost, ATC, including the annual capital cost, maintenance cost, and energy cost, is:

$$\mathrm{A}\mathrm{T}\mathrm{C}={\mathrm{C}}_{\mathrm{c}\mathrm{a}\mathrm{p}}+{\mathrm{C}}_{\mathrm{m}}+{\mathrm{C}}_{\mathrm{E}}$$

(15)

The annual capital cost of the system, C_cap, is:

$${\mathrm{C}}_{\mathrm{c}\mathrm{a}\mathrm{p}}=\frac{\mathrm{r}{\left(1+\mathrm{r}\right)}^{\mathrm{n}}}{{\left(1+\mathrm{r}\right)}^{\mathrm{n}}-1}({\mathrm{C}}_{\mathrm{S}\mathrm{I}}+{\mathrm{C}}_{\mathrm{s}\mathrm{u}\mathrm{b}}+{\mathrm{C}}_{\mathrm{G}\mathrm{S}})$$

(16)

where r is the interest rate, n is the service lifetime of system, C_SI is the static investment of the system, C_sub is the substation investment, and C_GS is government subsidies.

The annual maintenance cost, C_m, is:

$${\mathrm{C}}_{\mathrm{m}}=\sum _{\mathrm{i}=1}^{\mathrm{m}}\sum _{\mathrm{k}=1}^{\mathrm{l}}{\mathrm{O}}_{\mathrm{k},\mathrm{i}}{\mathrm{C}}_{\mathrm{m}\mathrm{k}}+{\mathrm{C}}_{\mathrm{d}}{+\mathrm{C}}_{\mathrm{s}\mathrm{m}}$$

(17)

where O_k and C_mk are the hourly operating power and the unit maintenance cost of the k^th equipment item, respectively, m is the system operating hours, l is the number of equipment items, C_d is the annual depreciation charge of the equipment, and C_sm is the annual cost of the system management.

The annual energy cost, C_E, is:

$${\mathrm{C}}_{\mathrm{E}}=\sum _{\mathrm{i}=1}^{\mathrm{m}}({\mathrm{E}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d},\mathrm{i}}{\mathrm{C}}_{\mathrm{g}\mathrm{r}\mathrm{i}\mathrm{d}}+{\mathrm{F}}_{\mathrm{p}\mathrm{g}\mathrm{u},\mathrm{i}}{\mathrm{C}}_{\mathrm{n}\mathrm{g}})$$

(18)

where C_grid and C_ng are the hourly costs of electricity from the grid and natural gas, respectively.

2.4. Comparative Analysis Process

Based on the above sections on the configuration of the systems and the evaluation criterion, we carried out a case study through four steps: data collection, system design, cost analysis, and economic comparison.

Data collection: We prepared the data collection encompassing two primary parts: building operating load data and economic data. In gathering the building operating load data, meticulous measurements and statistical records were obtained for the detailed load figures of the various electrical equipment items utilized during the operational phase of the building; to comprehensively assess the economic benefits, comprehensive datasets were assembled, including energy prices, market prices for related equipment, and investment and maintenance cost figures.

System design: Based on the building operating load data and the climate conditions in Changsha, we proposed a DER system configuration scheme and gave recommendations for the related equipment. Then, we designed the DER system configuration for the research case and conducted a comparative analysis of techniques with the reference system.

Cost analysis: according to the economic data and the technical analysis of the DER and the reference systems, we put forward a cost comparison analysis between the DER system and the CES, including the initial investment cost, the operating cost, and the maintenance cost.

Economic comparison: based on the cost analysis, and according to the method of economic evaluation mentioned in Section 2.3, we compared and analyzed the initial investment and long-term operation economic benefits of the DER system and the CES.

3. Case Analysis

3.1. Basic Information

In this paper, a natural-gas-fired DER system was implemented in an urban underground transportation infrastructure system. This case, located in Changsha, is the accessory occupancy of an inter-city railway station. The total land area of the construction is 25,504.00 m², with an overall area of 22,594.00 m², which includes an underground subway station and commercial building (area: 7786.39 m²), an underground garage (area: 10,537.00 m²), and a multistory building.

3.2. Load Analysis

This section presents the current data and the predictive calculation of using the natural-gas-fired DER system. Based on the documents of the HVAC system and the related electric equipment, Section 3.2.1, Section 3.2.2 and Section 3.2.3 give the statistics and analyses of the electric load, heating (cooling) load, and domestic hot water load, respectively.

3.2.1. Electric Load

Table 1. Electric load.

No.	Item	Value (kW)	No.	Item	Value (kW)
01	Elevators	55	11	Basement charging equipment	457
02	Commercial electrical substation	841	12	Emergency lighting	53
03	Underground garage	50	13	Firefighting system	20
04	Sewage disposal pump	23.5	14	Fire pump control cabinet	63
05	Exterior lighting	50	15	Firefighting blower	212.3
06	Network room	25	16	Fire booster pump	1.5
07	Safeguard system	20	17	Screw chillers	221.4
08	Power distribution room	10	18	Air-conditioner cooling tower	10
09	Bus station power distribution	100	19	Boiler room water pump	37
10	Ventilation and air-conditioner fans	141	20	Air-conditioner room water pump	63

indicates the current electric load data of the construction. All the electric loads can be categorized into five sets. The calculated value of each set in using the natural-gas-fired DER system, E_cal, is:

$${\mathrm{E}}_{\mathrm{c}\mathrm{a}\mathrm{l}}={\mathrm{E}}_{\mathrm{s}}\mathsf{\mu }$$

(19)

where E_s is the statistic value of the electric load, and μ is the electric load coincidence factor. The electric load coincidence factor is the ratio of the maximum integrated electric load of the entire power system to the sum of the maximum load of each power consumption unit. In general, the value of the electric load coincidence factor is between 0 and 1, indicating that the electric load of each unit may not peak at the same time. We set the electric load coincidence factor based on the system operation statistics and the recommended value range of the Power System Design Manual [31].

The following analyses are based on the data summarized in Table 1, considering a working day from 7:00 a.m. to 10:00 p.m.

(1)

The electric load of the first–ninth items in Table 1 sum to 1173.5 kW. This was predicted in accordance with the working time of the auxiliary facilities office. The maximum electric load coincidence factor was set to be 0.8, and the calculated electric load of this part was predicted to be about 938.8 kW.

(2)

The electric load of the 10th item (ventilation and air-conditioner fans) in Table 1 is 141 kW. Considering the complex operation of the power-consuming equipment in this type of electric load, the electric load coincidence factor was set to be 0.5, and the calculated electric load was assumed to be about 70.5 kW.

(3)

The electric load of the 11th and the 12th items in Table 1 sum to 510 kW. On account of the equipment operating intricately, the electric load coincidence factor was set to be 0.1–0.3, and the calculated electric load range was assumed to be about 51–153 kW.

(4)

The electric load of the 13th–16th items in Table 1 sum to 296.8 kW. This part is mainly for firefighting. Due to the complexity of the operation and the security requirements of the power supply, all equipment in this part was provided by the municipal grid.

(5)

In case of being supplied by the natural-gas-fired DER system, the electric load of the 17th–20th items in Table 1 might be canceled.

(6)

Using the natural-gas-fired DER system, the electric load of the power-consuming equipment needs to be increased to 180 kW. The calculated electric load of this part was predicted to be about 90 kW when the maximum value of coincidence factor is 0.5.

In conclusion, by setting the operating period of a typical day from 7:00 a.m.–10:00 p.m., the total basic electric load of the case was calculated to be within 1150.3–1252.3 kW.

Table 2. Basic electric load of the natural-gas-fired DER system.

Items	Statistic Value (kW)	Coincidence Factor	Calculated Value (kW)	Remark
1st–9th	1173.5	0.8	938.8
10th	141	0.5	70.5
11th, 12th	510	0.1–0.3	51–153
13th–16th	296.8	-	-	Provided by the municipal grid
17th–20th	-	-	-	Canceled
Power-consuming equipment	180	0.5	90
Total			1150.3–1252.3

indicates all the data mentioned above.

3.2.2. Air-Conditioner Load

• Climatic calculation parameters

Changsha is located in central-southern China and has a typical subtropical monsoon climate. It has four distinct seasons, which are humid and changeable in spring and early summer and dry and sunny in late summer and autumn. The cold winter period is short, and the hot period is long. The annual frost-free period is about 275 days. The annual average temperature is about 16.8–17.2 °C, with an extreme maximum temperature of 39.7 °C and an extreme minimum temperature of −11.3 °C. Figure 2 illustrates the climate data in Changsha, such as the temperature changes, the air moisture content, and the gross solar radiation intensity all year round.

Table 3. Outdoor air design conditions in Changsha.

No.	Item	Calculation Parameters
01	Local altitude	44.9 m
02	Average outdoor wind speed and direction in winter	2.3 m/s(NNW)
03	Average outdoor wind speed and direction in summer	2.6 m/s(C NNW)
04	Outdoor design temperature for heating in winter	0.3 °C
05	Outdoor design temperature for ventilation in winter	4.6 °C
06	Outdoor design temperature for the air-conditioner in winter	−1.9 °C
07	Outdoor design relative humidity for the air-conditioner in winter	83%
08	Outdoor design dry-bulb temperature for the air-conditioner in summer	35.8 °C
09	Outdoor design wet-bulb temperature for the air-conditioner in summer	27.7 °C
10	Extreme maximum temperature	39.7 °C
11	Extreme minimum temperature	−11.3 °C

Provided by design code for heating ventilation and air-conditioning of civil buildings BG 50736-2012 [32].

summarizes the main outdoor air design conditions in Changsha.

Table 4. Inner design temperatures and occupancy profiles of main spaces.

Spaces	Temperature (°C)		Occupant Density (m2/person)	Lighting Load Density (W/m2)	Equipment Load Density (W/m2)
	Summer	Winter
Hall (entrance)	28	16	2.5	8	20
Platform	28	18	1	10	20
Commercial	25	18	5	10	13
Office and service	26	20	5	9	15
Stairs and aisle	28	16	10	8	0
Washroom	30	16	10	5	0

According to the statistical data of this case and, combined with the stipulations in the design standard for the energy efficiency of public buildings GB 50189-2015 [33], the design code for heating ventilation and air-conditioning of civil buildings GB 50736-2012 [32], and the code for the design of metro GB 50157-2013 [34].

shows the design load parameters of main areas in this case, such as the air-conditioning design temperature, occupant density, and lighting load density.

• Air-conditioner load rate

According to the above discussion and reference materials and combined with the operating experience, the air-conditioner characteristics of this case were predicted as follows:

(1)

The air-conditioner cold-load rate of a typical day was calculated, and a value of 75% was obtained.

(2)

For the air-conditioner heat-load rate, in the winter heating period, the air-conditioner heat-load curve changes more gently. In theory, the average air-conditioner heat-load rate should be larger than 75%. However, in order to eliminate the statistical deviation caused by the low-load situation of the transition period of winter, the average air-conditioner heat-load rate in winter can be appropriately reduced. Thus, the average air-conditioner heat-load rate was reasonably determined to be 75%.

• Air-conditioner load analysis

Based on above parameters, we present the analyses of the air-conditioner load as follows:

(1)

The cooling period is from May to September every year, amounting to 5 months in total. The system operates for 15 h every day, from 7:00 a.m. to 10:00 p.m. The average air-conditioner cold-load rate of a typical day is about 75%.

(2)

The heating period is November, December, January, February, and March every year, amounting to 5 months in total. The system operates for 15 h every day, from 7:00 a.m. to 10:00 p.m. The average air-conditioner heat-load rate of a typical day is about 75%.

(3)

The transitional season is in April and October every year, and the system operates mainly with mechanical ventilation.

In conclusion, the DER system in this case operates for 365 days per year, of which the cooling and heating periods last for 150 and 150 days, respectively. The total cooling (heating) load, Q_c (Q_h), can be estimated as:

$${\mathrm{Q}}_{\mathrm{c}}={\mathrm{q}}_{\mathrm{c}}\mathrm{A}{\mathrm{N}}_{\mathrm{c}}$$

(20)

$${\mathrm{Q}}_{\mathrm{h}}={\mathrm{q}}_{\mathrm{h}}\mathrm{A}{\mathrm{N}}_{\mathrm{h}}$$

(21)

where q_c and q_h are the cooling and heating load indexes, respectively, A is the area of the air-conditioned space, and N_c and N_h are the correction factors of the cooling and heating load, respectively.

In this construction, only the commercial part is equipped with an air-conditioning system, with an area of 7786.39 m². Based on the objective and energy-saving design concept, q_c and q_h were set to 175 W/m² and 70 W/m², respectively. In consideration of the climatic and constructional conditions, N_c and N_h were set to 0.86 and 1.5, respectively. Therefore, the total cooling load of the air-conditioners in summer is about 1171.85 kW, and the total heat load in winter is about 817.57 kW.

3.2.3. Domestic Hot Water Load

In order to improve the total energy efficiency of the DER system and to enhance the social impact of the energy station, this case considers providing domestic hot water for the auxiliary facilities in this construction. In addition, excess domestic hot water can be sold to nearby users.

Based on the requirements of the design code for city heating networks CJJ 34-2010 [35], the average heat load index of domestic hot water was set to 2–3 W/m². It was preliminarily estimated that the total heat load of domestic hot water is within 16–23 kW.

3.3. Technical Analysis

3.3.1. Operation Strategy of the DER System Mode

In order to achieve a heating/cooling power balance, this program frames the capacity range of the equipment according to the basic electric load. In this study, the DER system operates under the following electricity load (FEL) strategy, which is intended to meet the electricity demand preferentially and to satisfy the heating (cooling) demand by secondary products [5], and it connects to the municipal power grid in the mode of centralized-grid-connected with power-on-grid. For the electric supply unit, the electricity generated by the PGU directly satisfies the electric demands of the construction and the system. Moreover, when the DER system cannot afford the load demand of the construction, additional electricity is supplied from the municipal grid. However, when the power produced by the PGU exceeds the total load demand of the construction, the excess part is sold back to the grid. For the heating (cooling) supply unit, the exhausted heat produced from the PGU is reused to meet the heating or cooling demand. In order to reduce investment and maintenance costs, there is no heat storage unit in this system. The excess heat generated by the PGU is cooled by a cooling tower and then released into the environment. In this way, the system can deliver an optimized operation performance and considerable economic benefits via the utilization of an energy cascade.

3.3.2. Main Equipment Selection

• Power generator unit

In the DER system, the PGU is installed near the end users, which reduces the transmission losses of power and increases the energy efficiency. Currently, there are three main types of conventional gas generator sets: micro gas turbines, small gas turbines, and natural gas ICEs.

Table 5. Comparison of main parameters of different types of gas generator sets.

Items	Micro Gas Turbine	Small Gas Turbine	Natural Gas ICE
Generating capacity	30 kW–1000 kW	610–19,100 kW	5–18,320 kW
Generating efficiency	26–33%	19–39%	29–48%
Available forms of waste heat	Medium-temperature exhaust gas	High-temperature exhaust gas	High-temperature exhaust + hot water
Temperature of exhaust gas	240–309 °C	369–555 °C	356–618 °C
Temperature of jacket cooling water	/	/	70–84 °C/85–98 °C
Gas inlet pressure	1 kPa–965 kPa	1000–3447 kPa	1–410 kPa
Noise	≤75 dB (A)	≤85 dB(A)	70–130 dB (A)
Emission of NOx	≤9 ppm	≤42 ppm	≤244 ppm

compares their main performance parameters. Due to the inflexibility and low power generating efficiency, the micro gas turbine generator set cannot adapt to the various daily/seasonal fluctuation demands of the heating, cooling, and electric load in this system. In addition, the high cost per kilowatt, which is from about 16,000 RMB/kWh to 24,000 RMB/kWh, might lead to more economic inputs. Therefore, the micro gas turbine generator set was not considered in this program.

By comparing small gas turbine generator sets with natural gas ICE generator sets, Figure 3 show the variation characteristics of the thermal efficiency and power generation efficiency of these two models under different load rates.

As can be seen from above figure, the power generation of the ICE is higher than that of the small gas turbine. The former has many outstanding advantages, such as its low unit cost, simple operation, etc. Its power generation efficiency can generally reach from 35% to 44%. Furthermore, all these advantages mentioned above seem more obvious in systems of a smaller scale. Thus, ICEs are widely used in small-scale DER systems.

However, the waste heat recovery of ICEs is more complex. If it cannot be reused immediately, the waste heat must be cooled down by a cooling tower; otherwise, the system cannot operate safely.

The thermal efficiency of ICEs is lower than that of the gas turbine generator set. As the load rate decreases, the power generation efficiency decreases, while the unit thermal efficiency increases gradually. This is because the temperature of the exhaust gas at the outlet increases when the load rate decreases, although the exhaust gas flow of the ICE is simultaneously reduced. Thus, the overall energy utilization efficiency of an ICE power generation unit is higher.

Considering the concept of the FEL strategy and the characteristic of changeable load demand, it was proposed to select a natural gas ICE as the power generation unit in this natural-gas-fired DER system. In this case, the nominal output power of the ICE was set to be 520 kW with a comprehensive energy utilization efficiency of 89.37%. Figure 4 illustrates the power generating efficiency and the heat exchange efficiency of the natural gas ICE sets under partial-load conditions, respectively. The advantages are listed as follows:

(1)

Higher power generation efficiency;

(2)

More available types of waste heat;

(3)

Higher efficiency of waste heat utilization;

(4)

Better partial-load characteristics;

(5)

Less environmental impact.

• Exhaust heat reutilization unit

The reutilization of waste heat in the system is the main way to increase the energy efficiency and achieve the utilization of an energy cascade. According to the analyses in the above sections, a single-effect hot-water-driven LiBr absorption chiller with a rated refrigerating capacity of 580 kW, an exhaust gas–water heating exchanger with a flue gas volume of 2509 m³/h, a water jacket heat exchanger with a heat exchange capacity of 950 kW, and a plate heat exchanger with a heat exchange capacity of 1470 kW were selected as the exhaust heat utilization unit in this DER system.

3.3.3. Technology Configuration of the Natural-Gas-Fired DER System

As mentioned above, the natural-gas-fired DER system in this case consists of five units: a PGU unit, a waste heat recovery unit, an electricity supply unit, a heating supply unit, and a cooling supply unit. Figure 5 shows the technical configuration of the DER system in this case. The system includes two ACs and two natural gas ICEs, and the latter includes an exhaust gas–water HE and a water jacket HE. In addition, the system is also equipped with a closed cooling tower for emergency cooling of the ICEs, some water pumps, and other auxiliary equipment such as a fixed-pressure water-supplying device, an automatic water-treatment device, etc.

In this case, the annual operating period is long, and the heating/cooling load pressure is relatively high, while the peak load period is comparatively short. Considering all these operating characteristics, two sets of natural gas PGUs and ACs were proposed for installation in order to guarantee operation at full load and with a high efficiency the whole year round. When the load is low, one set operates with the other one prepared. When the load is high, both sets operate to ensure the energy supply.

The mode of waste heat reutilization and the energy cascade utilization is listed as follows.

In the summer operating conditions, there are two forms of exhaust heat from the natural gas ICEs: flue gas and cooling water with a high temperature. The high-temperature hot water is produced by the exhaust gas–water HE, the water jacket HE, and the lubricating oil cooler. The three sources of hot water become the heat source that drives the ACs, which provide chilled water at 10 °C to the central air-conditioning terminal equipment. The second set of PGU and AC equipment will be turned on when there is an increase in the air-conditioning load.

In the winter operating conditions, the exhaust heat from the PGU is used to heat the water through the HEs. Then, the hot water at 60 °C enters the heating terminal equipment to supply heating to the users, and the excess part is used directly for domestic hot water. When there are extremely low outdoor temperatures, the second set of PGU and AC equipment will be turned on.

In order to make the natural-gas-fired DER system operate normally, stably, and reliably, it is necessary to coordinate and control the operation process and conditions of all kinds of equipment. The centralized control system for the design of the DER system can communicate with all the equipment in the system through different protocols or interfaces, realize the control of all the equipment, and improve the stability, the reliability, the automation level, and the efficiency of the DER system.

3.3.4. Implementation Conditions of the Natural-Gas-Fired DER System

We proposed the following implementation conditions of the natural-gas-fired DER system, including the grid interconnection technology, the layout conditions of the main equipment, and the space conditions of the energy station.

• Grid interconnection technology

The power generated by the PGU is connected to the low-voltage distribution cabinet of the supporting facilities of this project through the system’s own grid-connected cabinet in grid-connected and grid-uploaded modes. It forms a parallel relationship with the municipal power grid. The power generated can be fully used for the internal consumption of the building, and if the power generation is insufficient, it will be supplemented by the grid.

• Layout conditions of main equipment

As the operation and maintenance requirements of various equipment items in the energy station are different, in order to ensure that each equipment item has sufficient space for maintenance and good conditions for operation, as well as to provide a comfortable working environment for the energy station duty and inspection personnel, this scheme divides the energy station room according to the system processes, equipment functions, operating characteristics, and other factors. The static equipment system and vibrating equipment system, gas metering system and gas transmission pipelines, humid operating environment and dry operating environment will be set in relatively independent rooms and areas respectively with sufficient inspection channels and overhaul sites. Finally, the building space of the energy station will be controlled within a reasonable and scientific range, creating good spatial structure conditions for maintenance and noise-reduction measures.

• Space conditions of energy station

The energy station in this case is mainly divided into the areas of process equipment, such as the PGU room and pump room, as well as the duty control room, electrical control equipment room, gas metering room, and other production and office areas. Among them, the areas of the process equipment have a building area of 412 m² and a height of 7 m; the production and office areas have a building area of 68 m² and a height of 3.5 m. The total land area of the energy station building is about 480 m², which is equivalent to the land area of the air-conditioning equipment building.

3.3.5. Risk Analysis of the Natural-Gas-Fired DER System

In the failure mode and the risk analysis of the DER system, we need to comprehensively consider various potential risk factors. Among them, equipment failure and energy supply security are two particularly critical aspects.

In the case of accidental shutdown of the PGU, the system is equipped with two sets of gas internal combustion generator groups, which can be used as backups for each other. When one of the groups is shut down due to an accident, the second group will be started to meet 50% of the total electrical load. If both groups are shut down due to accidents, the system will have no power supply capacity, and all the power consumption will be provided by the power grid. The system will have no air-conditioning and heating capabilities.

In the case of accidental shutdown of the AC unit, the system is equipped with two sets of single-effect hot-water-driven LiBr absorption chiller units, which can be used as backups for each other. When one of the groups is shut down due to an accident, the second group will be started to meet 50% of the total cooling load. If both groups are shut down due to accidents, the system will have no air-conditioning capacity, and the internal combustion generator will be cooled by the emergency closed cooling tower.

In the case of a municipal natural gas supply outage, in the case of selecting single-fuel models, the system will have no power supply or air-conditioning capacity. All power consumption will be provided by the power grid.

According to the above failure mode analysis, equipment failure may lead to system operation interruption or performance degradation, thus affecting the stability and reliability of the entire system, while an energy supply outage may make the system unable to operate normally, causing serious production losses or safety risks. Therefore, in the process of system design and operation, we need to take effective prevention and response measures to ensure the normal operation of the equipment and a stable energy supply so as to reduce the impact of these risks on the DER system.

Risk response for equipment failure: Due to the local climate characteristics in Changsha, the system has a sufficient period for equipment maintenance throughout the year, which is about one month before the summer cooling period and the winter heating period, respectively. Therefore, a reasonable configuration and proper maintenance of the system can greatly ensure the stability and reliability of the equipment.

Risk response for energy supply outage: The interruption of municipal gas supply is an extremely low-probability event. Once it occurs, the municipal department will quickly activate the emergency plan to restore the gas supply as soon as possible. During this period, the building’s energy demand will be fully guaranteed by the municipal power grid to ensure that normal operation in the building will not be affected.

4. Economic Analysis and Discussion

4.1. Main Techno-Economic Indexes of the DER System

Based on the analysis of the electric load in Section 3.2.1, the analysis of the air-conditioner load in Section 3.2.2, and the selection of the equipment in Section 3.3.2, the annual working time of each unit in the natural-gas-fired DER system can be predicted as follows:

(1)

The natural-gas-fired DER system operates for 15 h per day and 365 days per year, so the annual working time of the natural gas ICE is 5475 h;

(2)

The cooling period is 150 days per year. The air-conditioning system operates for 15 h per day. So, the annual working time of the AC is 2250 h.

According to the selection of the equipment in Section 3.3.2, the installed power generation capacity of the system is 520 × 2 kW (two sets, mutual backup), which generates an electric power of 5,694,000 kWh/a, provides an electric power of 5,068,000 kWh/a, supplies cooling (heating) at 11,575 (8564) GJ/a, and consumes natural gas at 1,478,000 Nm³/a.

Table 6. Main techno-economic indexes.

Item	Value	Item	Value
Installed power generation capacity	520 × 2 kW	Annual cooling (heating) supply	11,575 (8564) GJ/a
Annual power generation	5,694,000 kWh/a	Annual natural gas consumption	1,478,000 Nm3/a
Annual power supply	5,068,000 kWh/a

lists the main economic and technical indexes of the system.

Considering the main indexes shown above and the selection of the equipment in Section 3.3.2, the system cost can be estimated, and the total investment of this system was determined to be about RMB 10,940,000, and the power generation cost per kilowatt was determined to be RMB 10,519/kW.

4.2. Economic Benefits Comparison

The economic benefits of the natural-gas-fired DER system in this study and the CES (namely, the system using an electric air-conditioner fully supplied from the centralized grid) were compared, and the analyses are presented in this section. (all charges refer to the reference value in

Table 7. Charges reference value.

Item	Reference Value	Item	Reference Value
Price of natural gas	3.089 RMB/Nm3	Depreciation charge of equipment	(1–0.05)/15 years
Commercial electricity price	0.802 RMB/kWh	Energy management charge	0.06 RMB/kW

)

4.2.1. Initial Investment

(1)

Compared with the CES, the static investment of the natural-gas-fired DER system increased by RMB 4,940,000.

(2)

Because the pipe network after the host unit and the end equipment of both systems are consistent, this part of the investment did not change.

(3)

The power load requirement from the centralized grid of the natural-gas-fired DER system is less than that of the CES. Therefore, this part of investment was reduced by RMB 200,000.

(4)

According to the methods of promoting the development of natural-gas-fired DERs in Changsha [2017], No. 9, enacted by the Changsha Municipal People’s Government, the special fund support standard of DERs is 2000 RMB/kW. In this case, the system can profit from a subsidy of RMB 2,080,000.

Synthesizing the above analyses, it can be concluded that the initial investment of the natural-gas-fired DER system was increased by 44.33% compared to the CES.

4.2.2. Operating Investment

Due to the highly efficient generation mode and the cascading utilization of energy, the DER system brings in large economic benefits compared with the CES mode. The main economic analyses are as follows:

(1)

The service lifetime of all equipment was set to be 15 years.

(2)

Cost of power consumption: The natural-gas-fired DER system does not require additional power supply from the centralized grid, except in some peak or emergency periods. In contrast, the annual electricity consumption cost of the single centralized-grid-supplied electrical HVAC system needs RMB 5,930,000.

(3)

Natural gas consumption: the natural-gas-fired DER system consumes 1,478,000 Nm³ of natural gas per year, which costs RMB 4,685,260.

(4)

Depreciation charge of equipment: it was estimated that the depreciation charge of the natural-gas-fired DER system is RMB 240,000 higher than the CES after 15 years.

(5)

Operation and maintenance charge: according to the operation and maintenance costs of the systems, it was estimated that the annual operation and maintenance charges of the natural-gas-fired DER system is RMB 500,000, which is RMB 30,000 higher than that of the CES.

In conclusion, according to a period of system operation of 15 years, the natural-gas-fired DER system will save 15.02% compared to the CES. The total annual cost of the natural-gas-fired DER system is about RMB 5,201,260, saving 18.73% compared to the CES. The investment payoff period of using a natural-gas-fired system is expected to be about 2.2 years.

4.2.3. Economic Comparison

Figure 6 compares the initial and operating investment costs of the natural-gas-fired DER system and the CES. As shown in these figures, we found that the initial investment of the natural-gas-fired DER system is higher, reaching RMB 2,660,000 (44.33%), which is the main cost increase when applying the DER system. However, in the long-term operation process, the DER system showed obvious advantages.

Firstly, the natural-gas-fired DER system reduced the annual energy consumption costs by RMB 1,244,740 (20.99%) compared with the CES, which means that users can save a lot of energy expenses through using the DER system. This is mainly due to the efficient energy utilization and flexible dispatching capacity of the DER system, which minimizes energy losses.

Secondly, although the system operation and maintenance costs of the natural-gas-fired DER system increased to RMB 46,000 (9.79%) compared with the CES, considering its energy consumption cost savings, overall, the operation cost of the DER system is still low. This is mainly due to the advanced energy management and control system adopted by the DER system, which makes the equipment operation more stable and the failure rate lower, thereby reducing maintenance costs.

Therefore, due to the significantly efficient energy utilization and the relatively low operating cost of the natural-gas-fired DER system, it could have a short payback period for the initial investment, which is proven by an increment of a static investment payoff period within 2.2 years in this specific case.

4.3. Discussion

4.3.1. Initial Investment

Although the initial investment of natural-gas-fired DER systems is 44.33% higher than that of CESs, this is due to their efficient energy utilization and energy conversion modes. This increase in investment not only helps to reduce subsequent operating costs but also provides significant economic benefits for long-term operation. In particular, considering the government’s subsidy policies for DER systems, the return on investment will be further improved.

In addition, with the development of technology and the gradual expansion of market demand, the cost of DER systems will gradually decrease. On the one hand, technological innovation and large-scale production in the related industry chain will reduce equipment costs; on the other hand, with the widespread application of DER systems, their operation and management costs will also gradually decrease. This will further increase the investment return rate of DER systems, attracting more investors to enter this field. Then, it could form a virtuous cycle of economic benefits.

4.3.2. Operating Investment

In terms of operation, natural-gas-fired DER systems are obviously superior to traditional CESs due to their efficient operation mode and energy cascade utilization. Firstly, DER systems do not require additional power supply except during peak or emergency periods, which greatly reduces their power consumption costs. Secondly, although DER systems consume a large amount of natural gas each year, their operating costs are still lower than those of CESs. In addition, although the equipment depreciation expenses are increased, these costs can be partially or fully offset by considering the government’s subsidy policies for DER systems.

4.3.3. Cost Saving and Economic Benefits

From a long-term operation perspective, DER systems, despite their higher initial investment, operation, and maintenance costs, offer significant cost savings in the long run due to their efficient energy utilization and energy conversion modes. In addition, the government’s subsidy policies further improve the economic efficiency of DER systems.

From the perspective of economic benefits, DER systems have a high rate of return on investment. Because they reduce energy procurement and transmission costs, the applications of DER systems have a short payback period, attracting a large number of investors to enter this field. At the same time, the government’s support policies for DER systems further reduce investment risks and increase the attractiveness of their application. Therefore, from a long-term perspective, it is feasible to use DER systems, and they have large economic benefits.

5. Conclusions

In this work, a scientific and reasonable application program of a natural-gas-fired DER system configuration was established by an overall load analysis (electric load/air-conditioner load/domestic hot water load). Based on the load, energy consumption, and actual operating situation, the economic performance of different types and capacities of the natural-gas-fired DER system was compared and analyzed. Moreover, a complete technical structure and concrete equipment selection of this natural-gas-fired DER system are presented in detail.

The characteristics of local power generation and energy cascade utilization of the DER system were studied. It was found that the DER system had a better operation performance and higher economic benefits. For this specific case, with respect to the CES, the natural-gas-fired DER system could save 15.02% in an operating period of 15 years, the total annual cost of the DER system was reduced by 18.73%, and the additional investment could be paid back within about 2.2 years.

In conclusion, this study has provided a comprehensive analysis of the technical and economic performance of a natural-gas-fired DER system. The findings of our research demonstrate the potential of DER systems to offer cost-effective, reliable, and environmentally friendly energy solutions for modern society. However, further studies and development are needed to optimize the performance of these systems, reduce their initial investment costs, and ensure their widespread adoption. The insights gained from this study provide experience in practicing and applying natural-gas-fired DER systems that can be applied to different studies and projects so as to propose new perspectives regarding DER system design.