Friday, April 22, 2011

Distributed Generation

Using Globally, Generating Locally

Undershot waterwheel on small creek
~ In the developed parts of the world we are all quite familiar with centralized electricity generation. Megawatts of high-voltage electrical power are created by large coal, gas, nuclear, or other installations and sent over the transmission grid to areas of large demand where it is transformed to lower voltage and distributed to individual homes and businesses.

The alternative is distributed or point-of-use energy generation. Water wheels have been used for thousands of years to create mechanical energy for grinding grain, sawing lumber, and pumping water for drinking or irrigation. Windmills have been used similarly. These and other technologies are still in use in much of the developing world today, along with distributed power from less sustainable sources like diesel generators.

Distributed and point-of-use generation have advantages and disadvantages over centralized power generation. Centralized generation requires an electrical grid, which is both costly and difficult to create since it demands an enormous right-of-way footprint. Our current electrical grid was developed higgledy-piggledy over time and increasingly reveals its growing decrepitude. It is less suitable to the many of the new forms of generation, especially variable renewable energy, like wind, which now comprises 40% of all new generation in the United States.

Restructuring our energy economy is a monumental, but critically needed undertaking. Promoting greater energy efficiency, developing utility-scale renewable energy generation and creation of a new, smart, electrical grid are important certainly, but getting less visibility is the rediscovery and resurgence of distributed energy, especially that based on sustainable sources. Distributed renewable energy generation has a huge potential market where there is no electrical grid, primarily in the developing world, but also in off-grid locations such as remote communities, military and offshore marine uses, and isolated scientific or other installations.

Distributed renewable energy generation will also often make sense even alongside centralized generation and grid distribution for several reasons:
  • Operating cost: where there is no fuel expense the operating cost of distributed energy can be very low, limited only to maintenance and financing. Where excess is generated, it can be reverse-metered and make money.
  • Environment: as the likelihood of the introducing some carbon tax or cap-and-trade system grows, a carbon-neutral solution gains appeal.
  • Security and independence: locally produced and used power is not as subject to disruptions from foreign fuel supplies, labor unrest, hostile state or terrorist action.
There are many distributed generation approaches, both new and re-imagined from older ideas. Apart from small solar and small wind, which are quite widely recognized and have decades of recent installations, there are some intriguing others:
The ones that capture human power are especially tantalizing, since they appear at first to be free and nearly limitless from something otherwise wasted. However, I can't help but wonder if we were drawing energy from all our kinetic activities all day long, wouldn't we get rather hungry? No free lunch (or breakfast or dinner) means that the operating costs are just hidden in another way. Energy that comes from nature, however, be it flowing water, waves, solar, etc. does not require any significant input of human productivity to generate on a day-to-day basis.

The biggest disadvantage of distributed energy generation is capital cost. Economies of scale have largely favored centralized generation; to be cost-effective, distributed energy generation solutions must be simple, mass-produced, easily transported and require minimal installation time and expertise. Lots of companies, including ours, are seeking to create just these kinds of products.

The current political and economic debate rightfully focuses on building the energy infrastructure that will both create a current economic stimulus and to lay a foundation for future growth and prosperity. President-elect Obama, as well as many think-tanks, institutes, and progressives--call them the Obama Ohana--cheer large-scale and large-dollar solutions for enormous renewable energy projects and massive smart grid building. I support these, but a similar impetus should also be given to partially decentralizing energy generation. A federal investment bank providing grants and loan guarantees, like a clean energy bank modeled on the very successful Ex-Im Bank, would be a powerful and cost-effective measure to nurture good ideas into the next generation of businesses to solve our nation's energy needs, rebuild our industrial base, and create jobs.

Not all big problems need big solutions. In an era when "too big to fail" should imply too big to exist, it's time to start thinking and acting locally.

Reposted from the Hydrovolts blog of 12/13/08 with minor changes.


  1. Interesting post. What about this?

  2. Good to see rigorous analysis to bring more flexibility to our power generation infrastructure. Thanks for the comment; has this been implemented anywhere? Corrected link.