Editor's Note: With this post we welcome Paul Sullivan onto the writing team. Paul is based in Auckland, New Zealand, and will be sharing insights and articles on technological advances in distributed energy generation, as well as case studies of successful D-G programmes in various countries. Welcome Paul!

On September 4, 1882, Thomas Edison flicked a switch in Pearl Street in Lower Manhattan, and sent electricity buzzing down the lines to 59 customers. In doing so, the prolific inventor made history once again, and changed our world forever. There had been electricity generation before of course, but the Pearl Street Station’s distribution system was the world’s first – never before had someone attempted the concept of a centralised power station with customers connected on the end of power lines (eei.org).

After over one hundred years and huge leaps in technology, humanity is looking to something of a paradigm shift in the way we view the creation and dispersal of energy. Distributed generation – the use of small scale generation close to users – has become somewhat of a buzz term in last twenty years, as we rise to the challenge of providing for our needs while trying to nurture our planet. This article is the first in a series to discuss this energy phenomenon, the benefits it can offer, and the challenges it faces.

The rise of the interest in distributed generation (often called “D-G”), has been due to several factors. Energy presents a key economic, environmental and political issue for humanity in the next century, and D-G seems to satisfy many current concerns, particularly in the context of climate change, rising energy prices, and the opening of the electricity markets in most Western countries.

As an energy option, D-G possesses multiple benefits, including:

• Using renewable energy effectively to decrease carbon emissions
• Providing an alternative to unreliable electricity supply and the need for rural electrification in developing countries
• Enabling local communities and individuals to constructively engage with the provision of key infrastructure, through both ownership and operation of electricity generation utilities
• Providing necessary back-up generation to essential services and commercial ventures
• Reducing loads on transmission and distribution electricity lines, meaning less funding is required to maintain and upgrade the assets*
• Giving users of electricity who have a stake in D-G assets the ability to sell electricity back into the grid

* In its report “Distributed Generation and Renewables Outlook to 2030”, the International Energy Association (IEA), projected that DG could reduce investment in transmission by US$130 billion in the period 2001-2030 (8% of total investment in transmission networks worldwide).

The debate over a definitive definition of D-G has been somewhat of an impediment to its advancement, and has given rise to difficulties around regulation. However, it is generally agreed that D-G can be defined as electricity generation which is:

• Small scale
• Located close to the source of demand
• Connected to distribution lines (although there is debate over whether the term should include those generators connected to transmission lines which fall within a certain size category)

There are really two main types of D-G, as defined by purpose. The first is D-G as a back-up form of generation. This is employed when a user requires the constant provision of electricity, and needs a contingency in case of an emergency. Examples include hospitals and other essential services, and, in the commercial sector, businesses such as manufacturing plants and information technology providers. Obviously any power cut to these users could have a devastating effect, from compromising whole servers to, to shutting down life-saving medical equipment. This type of distributed generation tends to be in the form of diesel generators.

However, for other purposes, diesel generators are not an appropriate technology to employ, given they use non-renewable fuel sources that pollute the atmosphere. Thus, the second type of distributed generation is the use of renewable technologies close to users as an alternative to centralised power generators. There have been a host of technological advances in power generation in the past few decades, but the main forms employed in the provision of renewable D-G are:

• Solar panels, often located on the roofs of buildings
• Small scale wind turbines
• Small scale hydro power, called “Microhydropower”
• Cogeneration technologies, which use natural gas to power small turbines, then use the exhaust to heat water or building

These technologies vary in their benefits – the following table sets out the advantages and drawbacks of each:

The next article in this series will delve further into the history of distributed generation and examine what advances have been made in D-G technology over the past few decades.

Bibliography

• Edison Electric Institute, “History of the Electric Power Industry”
• International Energy Association, Distributed Generation and Renewables Outlook to 2030, 2004

Further Reading:

• Do We Need to Go Nuclear