The August 2003 blackout of the northeastern U.S. and CANADA caused great economic lossesand inconvenience to New York City and other affected areas. The blackout was a warning to therest of the world. That the ability of conventional power systems to meet growing electricitydemand is questionable. Failure of large power systems can lead to serious emergencies.Introduction of on-site generation, renewable energy such as solar and wind power and theeffective utilization of exhaust heat is needed, to meet the growing energy demands of theresidential and commercial sectors.

Additional benefit can be achieved by integrating these distributed technologies into distributedenergy resource (DER) systems. This work demonstrates a method for choosing and designingeconomically optimal DER systems.

An additional purpose of this research is to establish a database of energy tariffs, DERtechnology cost and performance characteristics , and building energy consumption for Japan.This research builds on prior DER studies at the Ernest Orlando Lawrence Berkeley NationalLaboratory (LBNL) and with their associates in the Consortium for Electric ReliabilityTechnology Solutions (CERTS) and operation, including the development of the microgridconcept, and the DER selection optimization program, the Distributed Energy ResourcesCustomer Adoption Model (DER-CAM). DER-CAM is a tool designed to find the optimalcombination of installed equipment and an idealized operating schedule to minimize a site'senergy bills, given performance and cost data on available DER technologies, utility tariffs, andsite electrical and thermal loads over a test period, usually an historic year. Since hourly electricand thermal energy data are rarely available, they are typically developed by building simulationfor each of six end use loads used to model the building: electric-only loads, space heating, spacecooling, refrigeration, water heating, and natural-gas-only loads. DER-CAM provides a globaloptimization, albeit idealized, that shows how the necessary useful energy loads can be providedfor at minimum cost by selection and operation of on-site generation, heat recovery, cooling, andefficiency improvements.