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The key drivers for distributed generation include the systems’ relatively low pollution contribution, high efficiency, and reliable supply of high quality power at a competitive price. Advantages of Distributed Generation Although the field of distributed generation covers a broad range of technologies, a number of key advantages are common to all. First and foremost, on-site production of energy minimizes both transmission and distribution losses and costs, and helps to bypass congestion in existing transmission grids. This reduces the likelihood of regional brown- or blackouts, a growing problem in the United States that costs the national economy upwards of $100 billion per year.47 In fact, a number of companies whose business success depends on reliable, high-quality power have chosen to become independent of the grid by installing DG systems on their premises. Distributed generation also provides advantages to businesses or organizations that require substantial heat, and it offers opportunities to those that have access to low cost fuels including landfill gas and biofuels or renewable energies such as wind and solar. Aside from meeting their energy needs and protecting themselves from volatile electricity prices, these companies can sell their excess electricity to utilities. Further, from an investment point of view, it is generally easier to locate sites for DG technologies than for large-scale power plants. Grid system operators benefit from increased distributed generation, because they are able to defer upgrades of transmission and distribution systems, reduce losses from their distribution systems, and oftentimes provide network support and other services. Emissions of greenhouse gases, as well as sulfur and nitrogen oxides, are also greatly reduced due to higher efficiencies for carbon-fuel based generators and the increased use of renewable energy sources. Similarly, these increased efficiencies and additional renewable energy resources decrease U.S. dependence on energy imports. Finally, all technologies offer new market opportunities and create greater industrial competitiveness in the United States. The implementation of new energy management models will also provide businesses with expertise and knowledge of immense export potential. Disincentives and Barriers to the Expansion of Distributed Generation DG technologies running on carbon-based fuels perpetuate U.S. dependence on foreign energy resources and release dangerous emissions. Yet their superior efficiencies compared to common centralized power plants make them an important source of power in tomorrow’s energy economy. Ultimately, they face barriers similar to those of “green” distributed energy resources, which prevent them from increasing their market share despite a lengthy list of environmental and economic benefits. Such barriers include technological obstacles and economic disincentives in connecting to existing electric 96PDF Image | Shaping Energy Technology Transition
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