Ultrasystems Inc. on Wednesday unveiled a new, scaled-down cogeneration power system that company officials said is being positioned for a "burgeoning" market.
The system, which is the size of a freezer, is designed to give restaurants, laundries and other small businesses lower electric rates and greater independence from electric utility companies.
Ultrasystems President Philip J. Stevens predicted that micro-cogenerators, defined as on-site power plants that produce both hot steam or water and electricity from a single fuel source, will be as revolutionary to the power industry "as the personal computer was to the computer industry."
Stevens said that by 1995, micro-cogenerators will make up a $16-billion national market and reap sizable revenue for Ultrasystems. "We are hoping it will be bigger than anything else we have done," he said, although he declined to make sales projections.
The first micro-cogenerator that Ultrasystems is marketing produces 20 kilowatts of power an hour with a four-cylinder engine that uses natural gas. Stevens said that the system, distributed by Ultrasystems' new subsidiary, Micro Cogen Systems Inc., will be leased to users such as laundries, condominium complexes and fast-food restaurants. They will be charged an electric rate discounted by as much as 20% from what they otherwise would pay for electricity generated by their local utility.
'Nuclear Rate Shock Zones'
Ultrasystems officials said they expect to start signing lease agreements within 30 to 60 days.
Stevens said that despite a recent dramatic decline in the price of oil, electric rates in certain parts of the country are being boosted by the high construction costs of nuclear power plants coming on line and being absorbed into the rate base. Such "nuclear rate shock zones," he said, include New York City, Boston, Philadelphia and San Diego.
"San Diego is our No. 1 (marketing) target," Stevens said. He noted that San Diego County's electric rates, ranging from 11 cents to 13 cents a kilowatt-hour, are among the highest in the nation, in part because San Diego Gas & Electric Co. shared in the construction cost of the Diablo Canyon and San Onofre power plants. Parts of south Orange County, which are served by SDG&E, will also be an initial marketing area for the new micro units, Stevens said, while the units will be introduced to the remainder of Orange County and in Los Angeles County late next year.
Predicts Expanded Market
The market for cogeneration systems will greatly expand, Stevens predicted, after 1990. At that time, he said, the amount of energy being produced by large fossil fuel and nuclear power plants will begin to fall short of growing demand and the nation may be threatened with rolling brown-outs. He observed that construction of major power plants came to a halt several years ago.
Besides the 20-kilowatt unit, Stevens said Ultrasystems plans to build a variety of smaller units, including one as small as 2.5 kilowatts to furnish electricity and hot water for household use.
Keith G. Davidson, assistant director of Cogeneration and Gas Cooling at the Gas Research Institute in Chicago, said that the first cogeneration systems built in 1980 were large systems generating at least 10,000 kilowatts and designed for industrial plants. But the trend, he said, has been "to smaller and smaller systems."
Other Firms Enter Field
Within recent months, he said, several companies have announced plans to introduce cogeneration systems of 20 kilowatts or less, including Van Weld Inc. of Albuquerque, N.M., and Cogenic Energy Systems of New York. He said that Thermal Electron Corp., near Boston, already manufactures a 60-kilowatt unit.
Thermex Corp. of Anaheim has developed a 10,500-watt cogeneration system for household use.
Ultrasystems officials said that small cogeneration systems save money largely because they are highly efficient in converting fuel to energy and can be built through mass production at less cost for the amount of power generated than large power plants. However, Davidson emphasized that the small cogenerators, much like automobile engines, need routine maintenance, even to changing spark plugs and oil and adjusting the valves.
'Make Systems Reliable'
"The challenge is to make the systems reliable enough and with minimal service cost," Davidson said.
Anthony J. Williams, president of Ultrasystems' Micro Cogen Systems, said the company is also anxious to discover how its new 20-kilowatt cogenerator performs in everyday conditions and in April will make about five test installations at business locations in San Diego and possibly Orange County.
While acknowledging that other companies also are entering the micro-cogeneration field, Williams said that Ultrasystems has a head start, including a patent pending on the insulation and encapsulation it uses in its Micro Cogen 20 model. "We expect to have a couple years' lead," he said.