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Importance of Natural Gas in Distributed Generation

Distributed Generation resources (DG) are parallel and stand-alone electric generation units located within the electric distribution system at or near the end user. DG can be beneficial to both electricity consumers and the energy utility.

It is generally accepted that centralized electric power plants will remain the major source of electric power supply for the near future. DG, however, can complement central power by providing incremental capacity to the utility grid or to an end user. Installing DG at or near the end user can also in some cases benefit the electric utility by avoiding or reducing the cost of transmission and distribution system upgrades.
For the consumer the potential lower cost, higher service reliability, high power quality, increased energy efficiency, and energy independence are all reasons for interest in DG. The use of renewable distributed energy generation and "green power" such as wind, photovoltaic, and geothermal or hydroelectric power can also provide a significant environmental benefit.

Some of the primary applications for DG include:

  • Premium power - reduced frequency variations, voltage transients, surges, dips or other disruptions
  • Standby power - used in the event of an outage, as a back-up to the electric grid
  • Peak shaving - the use of DG during times when electric use and demand charges are high
  • Low-cost energy - the use of DG as baseload or primary power that is less expensive to produce locally than it is to purchase from the electric utility
  • Combined heat and power (cogeneration) - increases the efficiency of on-site power generation by using the waste heat for existing thermal processes

Users of DG have different power needs. Hospitals need high reliability (back-up power) and power quality (premium power) due to the sensitivity of equipment. Industrial plants typically have high energy bills, long production hours, and thermal processes and would therefore seek DG applications that include low-cost energy and combined heat and power. Computer data centers require steady, high-quality, uninterrupted power (premium power). DG technologies are either available now or are being developed to meet these needs.