Distributed energy resource (DER) systems are small-scale power generation technologies (typically in the range of 3 kW to 50,000 kW) used to provide an alternative to or an enhancement of traditional electricity infrastructure. According to the US Department of Energy, global energy use will jump by 49% between 2007 and 2035 – as energy demand continues to increase our world’s centralized electrical power grids experience tremendous and unsustainable strain. This strain leaves us vulnerable to electricity shortages, rolling blackouts and electricity quality issues. Making matters worse, a large number of the centralized power grids are inefficient and “dirty” – squandering precious natural resources.
Most countries generate electricity in large centralized facilities, such as fossil fuel (coal, gas powered), nuclear, large solar power plants or hydro power plants. These plants transmit electricity long distances and negatively affect the environment.
Historically, central plants have been an integral part of the electric grid, in which large generating facilities are specifically located either close to the resources or otherwise located far from populated load centers. They, supply traditional transmission and distribution (T&D) grid which distributes bulk power to load centers and from there to consumers. These were developed when the costs of transporting fuel and integrating generating technologies into populated areas far exceeded the cost of developing T&D facilities and tariffs.
The Central Plants scale began to fail in the late 1960s and by the start of the 21st century they could no longer provide competitive reliable electricity to remote customers through the grid. The grid had become the main driver of remote customer’s power costs and power quality problems. Efficiency gains no longer come from increasing generating capacity, but from smaller units located closer to sites of demand. Distributed OnSite renewable energy is a economical environmentally safe choice for remote and non-remote projects. Distributed generation allows collection of energy from Alternative and Renewable sources that will lower environmental impacts and improved security of supply. There are many Distributed energy resource (DER) systems emerging worldwide.
Many manufactures have used onsite power generation as a source of electricity, although it wasn’t called onsite power production or distributed generation. In 1994, manufacturers generated 142.5 billion kilowatt-hours of electricity, on site and 90% of that was co-generated. They generated more electricity than they could use, so they sold or transferred 28 million kilowatt-hours to the Electric Utility companies.
Renewable Technologies and new regulations has changed the thinking toward moving power station closer to the end user. Smaller-scale technologies that can be used on site close to the end user is commonly referred to as distributed generation power. Today it is economical to generate some or all of the electricity on or near the sites. In some ways, we almost have come full circle back to when electricity was first available.
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Onsite power production are able to offer economic advantages over Central Plants. Smaller units offered greater economies from mass-production than big ones could gain through unit size. These increased values are due to improvements in financial risk, engineering flexibility, security, and environmental quality which offset their cost. Distributed generation reduces the amount of energy lost in transmitting electricity because the electricity is generated very near where it is used. This also reduces the size and number of power lines that must be constructed.