Generating Cash From Your Backup Generator

Sergio Guerra, CPP Wind Inc.

Diesel backup generators are commonly installed in hospitals, data centers, universities, hotels, and other businesses for use in the event of power disruptions. These engines have quick response times that provide an unmatched reliable source of emergency backup power. Facilities that have these backup engines can also benefit from enrolling in demand response (DR) programs that offer economic incentives to participants who volunteer the use of their backup generators to supply electricity to the grid during certain periods of high electricity demand. In recent years, there has been an increase in the number of backup engines that have enrolled in DR programs in exchange for economic incentives. DR programs provide grid reliability, especially during periods of high electricity demand. Therefore, this is a win-win situation for backup engine owners and power utility companies offering these incentives. Generally, a backup generator with a capacity of 500 kilowatt (kW) or more is necessary to participate in DR programs. Participants in these DR programs agree with the local power company to use their backup engines when directed; usually during periods of peak electricity demand or power disruption. However, recent air quality regulations that apply to backup generators can be challenging to meet when participating in a DR program. That is the case because the applicable requirements for backup engine depend on whether the use is strictly for emergency purposes or for DR (considered non-emergency). Purely emergency use engines are subject to work practice standards while non-emergency engines are subject to emission limits that may require emission controls. Additionally, non-emergency engines may be subject to dispersion modeling requirements to show compliance with the national ambient air quality standards (NAAQS). At the moment the dispersion model used in permitting evaluations is extremely conservative and can show compliance issues. In conclusion, DR programs can be a profitable way to get additional cash for owners and operators of backup engines. However, the permitting implications should be considered thoroughly before enrolling in such a program to avoid any unintended adverse consequences.

Learning Objectives

  • What are demand response programs and how they work.
  • Benefits of demand response programs in improving the grid reliability.
  • Economic benefits to participants in demand response programs
  • Regulatory hurdles that have to be considered before enrolling in a demand response program


Sergio Guerra is a Senior Environmental Engineer specialized in Air Quality. He holds a PhD in Environmental Engineering from the University of Kansas. At CPP he leads the air permitting department which performs air dispersion modeling analyses and assists industrial clients in air permitting and environmental services. Mr. Guerra also has regulatory experience from working at the Kansas Department of Health and Environment reviewing air permit and dispersion modeling applications.


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