Distributed Generating Systems (DG):

Distributed generation (or DG) generally refers to small-scale (typically 1 kW – 25 MW) electric power generators that produce electricity at a site close to customers or that are tied to an electric distribution system. Distributed generators include, but are not limited to synchronous generators, induction generators, reciprocating engines, micro turbines (combustion turbines that run on high-energy fossil fuels such as oil, propane, natural gas, gasoline or diesel), combustion gas turbines, fuel cells, solar photovoltaic, and wind turbines.

Container gas engine

Applications of Distributed Generating Systems (DG):

There are many reasons a customer may choose to install a distributed generator. DG can be used to generate a customer’s entire electricity supply; for peak shaving (generating a portion of a customer’s electricity onsite to reduce the amount of electricity purchased during peak price periods); for standby or emergency generation (as a backup to Wires Owner’s power supply); as a green power source (using renewable technology); or for increased reliability. In some remote locations, DG can be less costly as it eliminates the need for expensive construction of distribution and/or transmission lines.

Benefits of Distributed Generating Systems Distributed Generation: ƒ

• Has a lower capital cost because of the small size of the DG. ƒ
• May reduce the need for large infrastructure construction or upgrades because the DG can be constructed at the load location.
• If the DG provides power for local use, it may reduce pressure on distribution and transmission lines. ƒ
• With some technologies, produces zero or near-zero pollutant emissions over its useful life (not taking into consideration pollutant emissions over the entire product lifecycle ie. pollution produced during the manufacturing or after decommissioning of the DG system). ƒ
• With some technologies such as solar or wind, it is a form of renewable energy. ƒ
• Can increase power reliability as back-up or stand-by power to customers.
• Offers customers a choice in meeting their energy needs.


Although stationary reciprocating engines have traditionally been diesel engines but some issues like environmental issues and good access, have been promoting the users in recent years to use natural gas as the fuel instead. In Iran, a Persian gulf country with the second largest resource of natural gas in the world, even automobiles are increasingly using gas burning and dual fuel engines.

Due to Iran’s large gas resources and energy low price, DG technologies that use Natural Gas are more economical than other technologies.

Cogeneration & CHP

Cogeneration (cogen) through combined heat and power (CHP) is the simultaneous production of electricity with the recovery and utilization heat
When power is produced traditionally, a large portion of original energy of the fuel is wasted as heat and hardly more than 40 percent of this energy is transformed into electricity. Moreover, usually consumers are located far away from the power plant and this distance causes more waste of energy in distribution of electricity. One way to tackle these problems is using local cogeneration. In this modern method of power generation, power is produced at the location of consumption and the majority of lost heat is recovered to supply heat demands of the user.

This results in a considerable improvement in efficiency. Cogeneration is a highly efficient form of energy conversion and it can achieve primary energy savings of approximately 40% by compared to the separate purchase of electricity from the national electricity grid and a gas boiler for onsite heating. Combined heat and power plants are typically embedded close to the end user and therefore help reduce transportation and distribution losses, improving the overall performance of the electricity transmission and distribution network

Usual technology:

Reciprocating engines in general and gas engines in particular are known as competitive mover for power generator through last two decades.
Gas engines are appropriate choice for DG and cogeneration applications because of their robust and simple technology. However, they do need regular maintenance and servicing to ensure availability. They are available over a wide range of sizes ranging from 10 of kilowatts to more than 10 MW and can be fired on a broad variety of gas fuels with excellent availability, which made them suitable for numerous applications in residential, commercial, institutional and small-scale industrial loads. Recently by considerable improvement in cost, efficiency, reliability and environmental issues, gas engines application are going to be more popular. Low operating cost, ease of maintenance, and wide service infrastructure are their other advantages. Furthermore, gas engines have simple technology and developing countries have suitable facilities to localize their production technology. The architecture of a typical packaged internal combustion engine based cogeneration systems are shown in below Figs:









The heat from the generator is available in from 5 key areas:

1- Engine jacket cooling water
2- Engine lubrication oil cooling
3- First stage air intake intercooler
4- Engine exhaust gases
5- Engine generator radiated heat, second stage intercooler
1, 2 and 3 are recoverable in the form of hot water, typically on a 70/90˚C flow return basis and can be interfaced with the site at a plate heat exchanger.

Benefits of Gas Engine CHP

The high efficiency of a CHP plant compared with conventional bought in electricity and site-produced heat provides a number of benefits including
• On site production of power
• Reduced energy costs
• Reduction in emissions compared to conventional electrical generators and onsite boilers

Economic Justification and Government Supports

According to warranted price of the electricity purchase and utilizing subsidized gas, and with regard to the construction costs (small-scale construction costs of power plants include: machine tools, equipment, raw materials and human resources …) and costs saved by using CHP system to generate heat, it can be said that the internal return rate of investment (IIR) in cogeneration power plants is acceptable, and the investment return period is less than four years.

The DG and particularly CHP sector investors will have the following support from Iran government:

• Make electricity guaranteed purchase contract by the Ministry of Energy
• Make bank facilities payment
• Receive fuel price margin
• Reduced tax rates from 65% to a flat fixed 25% rate of tax income despite and tax holidays for at least four years from startup.
• Large pool of trained and efficient manpower at very competitive costs
• Low Utility and Production Cost

Hamian Sanaat Kimia co. (HSKCO) works as an EPC in the field of distributed power generation in response to electric industry change and growing technology in recent years because of problems with construction and maintenance of large power plants and transmission and distribution networks, and due to having adequate experience in small-scale generators and gas power plants.

The most important issues in CHP projects are: equipment sizes, as well as the effects of those selections on available plant performance and heat recovery, Heat recovery options. The design of each system in the cogeneration plant, including: fuel, combustion air, exhaust, emission controls, electrical and obtaining a construction permit.

HSKCO offers following services to Iranian and foreign investors:

• Services related to obtaining necessary licenses for power plant construction
• Perform feasibility studies including the locating, network computing, network connection determination, environmental review and infrastructure requirements such as water, fuel and access road
• Financial consultation
• Procurement
• Installation, implementation, and establishment
• Education and utilization
• After sales services including spare part supply and maintenance