DG Facts

DG Program Contact Person:
Ellen Berman
Email: eberman@cecarf.org
Phone: 202-659-0404

Distributed Generation Facts

What is distributed generation?
What kinds of technologies are considered within the definition of distributed generation?
What are the potential benefits of distributed generation?
What are the significant barriers to a greater use of distributed generation?
Who can use distributed generation?
Will a customer’s decision to implement distributed generation increase the price for electricity?
How will this affect America as a whole?

What is distributed generation?

Distributed generation is a system composed of generation located near the energy consumer’s site that may be highly integrated with the electric grid to provide multiple benefits on both sides of the utility meter. Top

What kinds of technologies are considered within the definition of distributed generation?

DG resources encompass a wide variety of new and emerging technologies that utilize an equally wide array of fuel or power sources, including solar, wind, biomass, natural gas, petroleum, and even geothermal and micro-hydro energy sources. A few of the more prominent technologies include solar (photovoltaic) cells, wind turbines, fuel cells, and natural gas or diesel micro-turbines. Top

What are the potential benefits of distributed generation?

DG resources have the potential to enhance grid-connected applications by improving transmission and distribution reliability and infrastructure while providing base load energy, peak shaving, back-up power, remote power and cooling, heating and power applications. More specifically, DG has the potential to:

Lower cost electricity and higher net energy efficiency;
Enhance end-user energy source and design choices;
Improve overall system reliability;
Enhance environmental quality;
Generate cost-effective peak load accommodation strategies;
Improve power quality and reliability for specific end-user needs, particularly in the digital economy;
Become a central component in creating a new platform for integrated consumer services involving the convergence of electricity, natural gas, and telecommunications grids
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What are the significant barriers to a greater use of distributed generation?

The benefits of distributed generation require that it be properly integrated with an improved national electric power system, incorporated into the economic structure, and accommodated by appropriate regulatory and administrative regimes. Since the electric generation and distribution infrastructure was developed on a model of using large-scale central generation plants with an intricate web of transmission (grid) lines, the regulatory, power engineering, and economic systems are particular to that model. Generally, there are three main barriers:

Regulatory barriers, whereas laws overseeing large-scale generation and distribution facilities are not always appropriate for small-scale DG
Technological barriers, whereas issues such as interconnection standards and the performance of emerging DG technologies are not yet viable
“Mindset” barriers, where the deployment of DG resources may entail a revolutionary rethinking of how the energy infrastructure could be revamped.
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Who can use distributed generation?

Distributed generation, when properly deployed and using appropriate technologies, can reach beyond niche markets to provide customers of all types - residential, commercial, industrial and small business - with more reliable and higher quality electricity, more affordable electricity and more environmentally friendly power.Top

Will a customer’s decision to implement distributed generation increase the price for electricity?

There are many reasons for customers to utilize distributed generation. In some applications, especially where combined heat and power are desired (where the DG resource generates the electricity and its “waste” heat is recaptured for industrial uses or heating and cooling), the efficiencies can be high enough to result in a lower overall cost for the customer. However, customers may also be interested in DG for many other reasons, including greater environmental benefits, more reliable power, or greater control over the quality of the power received. In the later examples, the overall benefits may outweigh the costs. Instances of blackouts, poor power quality and uncertain reliability take a very high toll in terms of lost productivity. The value of reliability needs to be carefully considered in the economic equation. Top

How will distributed generation affect America as a whole?

The nation as a whole benefits from measures that relieve stresses on the transmission system and help ensure more reliable, more affordable and more environmentally friendly power supply. Top