Distributed Generation – an Old Idea Reconsidered

Development of Central Station Generation

In 1882 Thomas Edison used a form of distributed generation when he lit his first commercial light bulbs with power from a dynamo located on Pearl Street in New York’s financial district close to the point of use. Edison attempted to maintain this business model, selling lighting systems throughout the world, using a small generating source and a short distribution line going from the generating source to the point of use.

Edison's first form of distributed generation
Edison’s Pearl Street Generating Station

George Westinghouse, with the help of Nicola Tesla, saw the shortcomings of Edison’s system. They developed an alternating current system that relied upon large remote central station generating plants whose electricity could be delivered long distances to multiple customers. Because Westinghouse’ system was much more efficient than Edison’s he won the War of the Electric Currents.

Remote central station power plants using a complex delivery system of transmission lines have now become the standard in the industry.  And distributed generation fell out of favor for more than 100 years.

The following video explains how electricity is generated at a central station power plant:

The following video explains how the electric transmission system delivers electricity from a central station power plant to a local distribution system for final delivery to customers:

Flaws with the Central Station Model

Westinghouse’ system was, however, far from perfect.  The fossil fueled central station generating stations emit pollution and greenhouse gases. And, because of their size, the central station plants must be added in large chunks, often before they are needed by utility customers.

The transmission system used to deliver the power requires rights-of-way in controversial areas, is maintained by utilities with different levels of commitment to that maintenance, is subject to potential outages due to weather, faulty equipment and terrorist attacks and causes energy losses of as much as 10%. Even with these flaws, for more than 100 years, Westinghouse’ system has been the best method available for the delivery of reliable and affordable electric service.

Reconsideration of Distributed Generation

Reliance on large central station generation may, however, be changing. Distributed generation, that is small scale generation located close to the point of use, and similar to what Edison used in his early lighting systems, may be an efficient substitute for at least some portion of the current system of remote central station plants and transmission network.

Distributed generation can come in the following forms:

  • Back-up generation used to ensure continued operation during an outage of the larger grid. This type of distributed generation has historically been used by health care facilities but has recently be expanded to more and more residential and commercial facilities.
  • A combination of generation sources (possibly including small scale thermal generation along with one or more renewable resources) that provide service to a major institution such as a university, a hospital or a government campus as well as the surrounding community. This is sometimes referred to as a micro-grid and can be operated either along with, or independent from, the larger grid.
  • Site specific generation, such as an industrial facility’s cogeneration plant or residential roof top solar panels where the energy generated can be sold to the larger grid.
  • Behind the meter generation where the output is used solely to reduce the owner’s purchases from their local utility. None of the output from these systems are sold to the larger grid.
Rooftop solar as distributed generation

The United States Department of Energy paper entitled The Potential Benefits of Distributed Generation and Rate-Related Issues That May Impede Their Expansion provides a more detailed discussion of the various forms of distributed generation.

Distributed Generation Can Provide Both Individual and System Benefits

Distributed generation is currently installed primarily by customers who see a benefit from such use. Their benefit may be in the form of back-up service in the event of an outage, a reduction in costs, or a desire to consume electricity that that is produced without carbon emissions.

Distributed generation can also provide benefits to the overall utility system in the form of reduced losses during long distance transmission, reduced pollution from central station thermal plants and improved system reliability.  Distributed generation has not, however, historically been viewed very favorably by utilities. In fact, they have found ways to discourage their use by customers.

In recent years, however, regulatory agencies have reduced the utilities’ ability to discourage customer installed distributed generation. And utilities are now well aware of the benefits that they can gain from this distributed generation.

Utilities will not, however, fully realize the system-wide benefits until they can fully incorporate the benefit of distributed generation into their system operations and planning. And that will not occur until they fully implement the Smart Grid under which they will have complete information regarding the operational status of all distributed generation on their system. The following is an example of how a utility can use distributed generation and the Smart Grid to benefit its system.

I. David Rosenstein worked as an attorney and consulting engineer in the electric utility industry for 40 years. When he retired he wrote a book entitled Electrifying America: From Thomas Edison to Climate Change that describes the evolution of the electric industry from the time Edison invented the light bulb until today. Each of his posts in this Blog describe a different aspect of the past, present or future of the electric industry. 

Leave a Reply