Distributed generation

Distributed generation is a new trend in electric power generation. The concept permits the electricity "consumer", who is generating electricity for their own needs, to send their surplus electrical power back into the power grid.



Many factories, offices and especially hospitals require extremely reliable sources of electricity and heating for air conditioning and hot water. To safeguard their supply and reduce costs, some have installed co-generation or total energy plants, often using waste material, such as wood waste, or surplus heat from an industrial process to generate electricity. In some cases electricity is generated from a locally supplied fuel such as natural gas or diesel oil and the waste heat from the generator's thermal energy source is then used to provide hot water and industrial heating as well. It is often economic to have a co-generation plant when an industrial process requires a large amount of heat generated from non-electric sources such as fossil fuels or biomass.

Regulatory and technology issues

Until recently, regulatory and technology issues meant that domestic consumer-generated electricity could not be easily or safely coupled with the incoming electric power supply. Electric companies need to have the ability to isolate parts of the power grid; when a line goes down workmen have to be sure the power is off before they work on it. They also spend much effort maintaining the quality of power in their grid. Distributed power installations can make control of these issues more difficult.

With the advent of extremely reliable power electronics it is becoming economic and safe to install even domestic scale co-generation equipment. These installations can produce domestic hot water, home heating and electricity, with surplus energy being sold back to the power company. Advances in electronics have eased the electric companies safety and quality concerns. Regulators can act to remove barriers to the uptake of increased levels of distributed generation by ensuring centralized and distributed generation are operating on a 'level playing field'.

In the U.S., federal law requires that electric companies buy power from independent producers, subject to regulations and insurance coverage.

Distributed generation is not confined to fossil fuel. Some countries and regions already have a significant renewable power source in power grid-tied wind turbines and biomass combustion. Increasing amounts of distributed generation will require changes in the technology required to manage transmission and distribution of electricity. There will be an increasing need for network operators to manage networks 'actively' rather than 'passively' as is currently the case. Increased active management will bring additional benefits for consumers in terms of the introduction of greater choice with regard to energy supply services and greater competition. However, the switch to more active management may be a difficult one. Distribution networks are a natural monopoly and are thus tightly regulated to ensure that they do not draw excess profits at the expense of the consumer. Network investment is a key determinant of the costs that networks can pass on to consumers.

Networks act to maximise their profits within the framework provided by their regulation. Currently such regulation does not lend itself very well to incentivising innovative behaviour by networks. This is likely to prove to be a barrier both to the development of networks and to increases in the levels of distributed generation that is added to networks. However there are indications that regulatory authorities are becoming more aware of the potential barriers and are introducing regulation of connection charges and conditions to enable distributed generators to participate in the electricity market. Ofgem the gas and electricity regulator in Britain has also introduced incentives for electricity Distribution Network Operators (DNOs) who spend on research and development of innovative network solutions to accommodate distributed generation.

While there is the potential for a major portion of the electrical power supply to come from decentralized power sources, significant issues remain limiting the widespread use of this technology, including billing and energy credits, generation control and system stability. To maintain control and stability of the power system in some networks, the neighbouring consumers need to consume all the electric power that a producing consumer may produce. This ensures there is a net flow of electric power from generators to consumers in the distribution network, even though there may be a local outflow within the local distribution. With the growth of electricity markets and the requirement for open access to networks, the distributed generator may have more options for selling the excess production, either through physical or financial contracts (Hedges).

See also

Smart building

External links

Distributed electricity power

Decentralized power sources

Inverters - 230V/115V grid tied or off grid



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