Generation Drivers / Benefits
For the past 60 years, electricity production and supply have been performed by
centralized, regulated electric utilities who owned and operated power generation
facilities as well as the transmission and distribution lines. Investor-owned
utilities are regulated by state public utility commissions (PUCs), while cooperative
and municipal utilities are governed by local jurisdictions.
Since the 1970s,
federal and state public policy has encouraged the opening of the electric power
system to entities other than the electric utilities. This has created a competitive
landscape for power generation and has opened the transmission system to access
by paying users. A significant shift in the U.S. regulatory system began with
the Energy Policy Act (EPAct) of 1992, which required interstate transmission
line owners to allow all electric generators access to their lines. Many states
today are at various stages of electric utility deregulation.
is one reason for the high level of interest in distributed energy resources.
for DG include:
- Desire for
alternative renewable resources such as solar and wind.
- Need for higher
quality power in some commercial and industrial facilities as a result of increased
use of microelectronic devices.
- Remote power
applications and the desire to reduce the cost of transmission line upgrades.
- Meets requirements
for reduced emissions.
DG can provide many benefits, including:
- More reliable
power, especially for those in areas where outages are common.
- The variety
of DG equipment allows customers to choose the best solution for an individual
- Some DG equipment
is able to provide high-quality, premium power for sensitive applications.
- DG equipment
efficiency improvements are achieved when used in combination with combined heat
and power equipment for heating, cooling, and dehumidification applications.
- Cost savings
can be realized by reducing the peak demand at a facility, therefore lowering
- DG equipment
can provide power to remote applications where traditional transmission and distribution
lines are not an option. Locations such as cellular towers, small remote towns
or drilling platforms in the ocean are outside the electric grid and benefit from
DG as a primary power source.
benefits of DG solutions include a reduction in emissions for some technologies
(e.g., solar, wind, fuel cells).