Distributed generation: The path to lower transmission losses?

Quick Take:  A Frost & Sullivan report suggests that lower transmission losses from distributed power generation make it more feasible than centralized generation. Problem is, reports like this tend to gloss over the impact DG has on the power grid. They often act as if we will be able to plug DG into the grid any time any place without penalty. In reality, a large expansion of DG would require modernization of the grid... and someone has to pay for those costs. – Jesse Berst

The Frost & Sullivan analysis, Decentralized Power Generation: Technology Penetration and Roadmapping, finds that distributed generation (DG) units – which generate energy near its end use rather than in centralized plants – are able to significantly reduce transmission losses.

The report suggests that small power generating units distributed throughout a city electric grid will be able to partly cover energy demands and ease the load on the main transmission lines between the central power plant and distributing stations.

 “Building dwellers are increasingly realizing the merit of adopting small gas engines or micro turbines in the near term, and fuel cells in the long term, to generate domestic combined heat and power (CHP),” said analyst Tomasz Kaminski. “Besides domestic CHP units, roof-mounted small wind turbines and photovoltaic (PV) panels will also be popular among end-users, as they allow them to sell excess energy produced by their generation units back to the grid.”

Solar thermal heating is the most used DG technology currently, according to Frost & Sullivan, while electricity storage technologies are expected to be the most popular in seven to nine years.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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