Request for Proposals for Propane Distributed Generation Market Assessment

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Request for Proposals for Propane Distributed Generation Market Assessment
July 14, 2008

General Information
The Propane Education & Research Council (PERC) is a non-profit 501(c)(6) trade organization authorized by the Propane Education and Research Act of 1996 (PERA), Public Law 104-284. PERC was created “to enhance consumer and employee safety and training, to provide for research and development of clean and efficient propane utilization equipment, and to inform and educate the public about safety and other issues associated with the use of propane.” This Request for Proposals (RFP) is not subject to any federal or state procurement law or regulation.

A 21-member board of directors appointed by the National Propane Gas Association and the Gas Processors Association governs PERC. Members include propane retail marketers, propane producers, propane transporters, and agricultural cooperatives, as well as representatives of allied service and supply industries.

Project Overview and Objectives
To evaluate and quantify markets, applications, and trends in the United States for distributed generation (DG) where propane would be used as the energy source and estimate propane volume potential by technology, market segment, and region. Applications include premium generator sets, combined heat and power systems (CHP), and renewable hybrid power systems. The size of systems to be studied should be limited to residential applications and commercial and institutional applications where propane has a distinct advantage, such as resorts and off-grid applications. While there is not capacity restriction, there may be practical limits that restrict applications to less than 1 megawatt.

In most countries, central power is generated primarily with nonrenewable fuels and has to be transmitted to an end site for use. However, the energy transmission systems needed to distribute the power to end users are vulnerable, expensive, unsightly, and energy inefficient (31.4 percent of the U.S. electrical generation efficiency average). On the other hand, on-site electricity generation can provide real energy benefits over centralized power generation by avoiding traditional energy production losses and problems. These on-site systems are referred to as distributed generation (DG).

The Propane Education & Research Council (PERC) has been exploring a variety of opportunities to use propane in the DG market since 2000. Lately, advances in DG technology have enabled propane systems to reliably generate electric power and recover usable heat at higher efficiencies than was previously possible. PERC has surveyed numerous systems throughout the world to identify the best performing and most advanced equipment and is working with manufacturers to develop and demonstrate these newer systems to perform in this growing market area.

Advanced gensets, or generator sets consisting of a combustion engine that drives an electrical generator, can provide longer maintenance intervals and higher efficiency. By operating with maintenance intervals up to 10,000 hours and service lives of up to 40,000 hours, these advanced systems can attain electrical efficiencies comparable to those of the electric grid.

Significant advances have been made with small combined heat and power (CHP) systems that can have CHP efficiencies of up to 90 percent, and this market study should consider systems featured in PERC’s DG demonstration program to evaluate the performance of advanced CHP systems in real-world applications.

Research is proving that these advanced DG systems, when combined with renewable resources such as solar panels and wind turbines, can provide highly reliable electric power and heat efficiently and with low emissions. These DG hybrid systems can attract significant positive attention for propane, where CO2 emissions alone can be reduced by more than 80 percent when compared with centralized power. PERC has supported several recent demonstrations of this new hybrid technology that should be considered in this market study.

The DG market remains a key market to increase the use of propane fuel using new technologies. Advances in propane gensets make propane a fuel of choice for distributed generation. This RFP seeks to identify and define the market opportunity for propane in this market in the United States.

Proposals to Provide Services Sought / Scope of Work

  1.  Baseline Information
    1. Brief background on U.S. energy markets and future trends
    2. Description of the propane DG/CHP and hybrid products available
    3. Explanation of methodology to be used, data sources, and calculations to make market estimates
  2. Identification and Description of the End-use Markets for DG Products.
    1. Residential
    2. Agricultural
    3. Recreational (resorts, lodges, camps, recreational vehicles, etc.)
    4. Commercial
    5. Telecom and remote data sites (include radar, pipeline, road monitoring, and other telemetry)
    6. Other
  3. Economic Information
    1. Determine natural gas and electricity service availability and its pricing by location
    2. Determine the capital, operating, installation, and maintenance costs that must be met in different regions of the United States for propane DG systems to be affordable and competitive for residential, commercial, and agricultural applications in both on- and off-grid applications
    3. Determine where CHP or renewable incentives exist (federal, state, and local) and how this will affect CHP and hybrid DG purchase decisions
    4. Determine where high electric rates and capacity restrictions would allow use of advanced propane gensets for small-site peak shaving where natural gas is not available or needs propane backup
  4. Potential Decision Making
  5. Identify barriers to market entry
      1. Identify public policy initiatives influencing purchase decisions (such as incentives, grid interconnection, net-metering, and regulations)
      2. Explain how the benefits of propane DG systems satisfy the end user’s needs
      3. Explain why the end user would choose propane DG over alternative options
  6. Commercialization Planning Based on the Preceding Information
      1. Estimate the size of the DG market’s technical and market potential by region and application and include information on electrical grid availability
    2. Identify partners and recommend market channels that can help penetrate these markets
    3. Identify energy industry and user venues where propane should be exposed
    4. Identify government programs and agency contacts whose support for commercialization should be sought
    5. List specific steps recommended for commercialization in different segments
    6. Forecast the number of product installations each year from the date of commercialization for the next 10 years
    7. Identify technology needs and gaps

The contractor must demonstrate and describe its ability to anticipate, coordinate, and carry out all aspects of the project. Primary qualifications include expertise and significant experience in information gathering, interpretation, and writing, and an understanding of smaller power service areas and electrical generation. Project completion dates will be an important factor in selecting a contractor. PERC anticipates the award date for the project to be October 10, 2008. Eligible applicants for this solicitation are profit organizations, not-for-profit institutions and organizations, educational institutions, and individuals.

Other Requirements
Responding proposals must include the following specifications. The specifications are derived from PERC’s funding request form. The funding request form may be used and is available upon request.

  1. Statement of the Project
    • Background information about the project
    • Prior projects upon which the proposed project is based or which had the similar goals and objectives as the proposed project
    • Goals, objectives, and anticipated results of the project and planned deliverables
    • Identification of essential personnel expected to participate in the project
    • Status of essential personnel as employee of the applicant, consultant, or contractor
  2. Timeline for the Project
    • Commencement date
    • Completion date
    • Key project stages and activities
    • Dates upon which deliverable(s) will be presented to Council
    • Final Report due date (due not more than 60 days from completion date)
  3. Budget and Statement of Costs
    • Specifically include direct costs, salaries, overhead and subcontractor costs, fees, and expenses
    • Statement of how much the applicant is contributing toward the cost of the project in cash, in-kind, and services
    • Detailed statement of other funding sources contacted or to be contacted, the expected amount of funding from each, the status of each application of funds, and any conditions placed upon the use of funds. Proposals with matching grants will be looked upon more favorably than others
    • Budget to be broken down by task
  4. Cost-Benefit Analysis
    • An examination of the value of all favorable effects (benefits) to safety, consumer awareness, and propane consumption relative to the amount of funding being requested
    • An assessment of the cost-effectiveness of the proposed work (the ratio of cost per unit of desired results)
    • If applicable, a discussion of possible alternatives that could achieve similar purposes
  5. Evaluation Statement
    • Description of roles, responsibilities, performance measures, evaluation methodologies, and data sources


  1. PERC, in its sole discretion, also reserves the right to not award to any contract on the proposals received.
  2. PERC may request additional information from any submitter.
  3. Neither this RFP nor the submission of any proposal creates any contract or obligation on the part of PERC.
  4. Should PERC identify a proposal(s) suitable for award, the submitter(s) will be required to sign a written agreement for the services sought. This contract will be an indefinite quantity contract which will permit PERC to order the successful submitter(s)’ review of as few as one program. The quantity ordered beyond the minimum set forth in any resulting contract shall be at the discretion of PERC.
  5. PERC will not accept any information in any proposal that is designated confidential or proprietary or contains confidential or proprietary information. PERC cannot and will not guarantee that should such information be submitted that it would be maintained as confidential. Should a submitter desire to submit proprietary or confidential information, it should contact PERC in advance to discuss whether and how such information may be effectively submitted.

 Additional Information
Proposals will be subject to an objective merit review procedure of PERC’s Research and Development Advisory Committee. The Committee will consider the following elements:

  1. Clarity, adequacy, and completeness of the proposal.
  2. Suitability of experience and availability of key personnel identified in the proposal.
  3. Evidence of team’s experience and success in similar projects.

Please send all questions regarding this Request for Proposals and your intentions to bid in writing via email to Greg Kerr at For copies of the following PERC documents, please visit our website at

  1. Propane Education and Research Act
  2. Fact Sheets
  3. Press Releases
  4. Propane Vision and Technology Roadmap

Submitting Proposals
Proposals are required to be contained in a single file and must be sent in electronic PDF or Microsoft Word 2003 or earlier format to They are due at PERC’s office no later than 5:00 p.m. Eastern on August 15, 2008. A disk may also be mailed to:

Gregory Kerr
Propane Education & Research Council
1140 Connecticut Avenue, NW, Suite 1075
Washington, DC 20036
202-452-8975 (phone)