What is distributed power generation?

What is distributed power generation? 

Distributed generation describes a type of energy generated nearby the location where it is to be consumed. Often used in renewable setups, distributed generation can be more localised, able to deal with local demand, and more cost-effective.  

Distributed generation tends to be more reliable than centralised power systems because the setup can keep the power on even if there are issues with the main energy grid.  

Solar photovoltaics, small wind, fuel cells, and microturbines are examples of renewable energy that can benefit from distributed generation.  

How does distributed generation work? 

1. Connection to the local grid or behind-the-meter systems 

Front-of-meter systems pass through an electric meter, but behind-the-meter systems, by contrast, don’t pass through an electric meter at all. Behind-the-meter systems are commonly utilised in setups such as residential solar panels. Microgrids might also use this setup, formed of a battery, transmission, and a generation source. These systems are often a good solution for smaller renewable energy arrays.  

2. Role of inverters, storage systems, and smart meters 

As more renewable energy types enter the grid, special attention must be paid to their integration, including the power conversion, storage and energy measurement. This includes using power inverters to convert AC power from DC power - the initial power format generated by renewables. Smart meters allow the residential or commercial energy procurers to measure and track the amount of energy consumed and where. Finally, small fuel cell storage systems allow unused energy to be stored and used later, potentially avoiding power outages where the main grid would cause failure.  

3. Integration with home, commercial, and industrial sites 

Situations such as home, commercial, and industrial sites can all benefit from distributed power generation. Residential can utilise small solar and wind setups to service the home, whereas commercial can benefit from the cost savings associated with distributed generation, as well as green brand recognition. Industrial sites might benefit from the ability to sell back unused energy to the main grid.  

Technologies used in distributed generation 

Rooftop solar PV and battery storage are a favoured by residential setups due to their ability to both generate and store an appropriate amount of energy for the average home, while other sources, such as small wind-setups might only be suitable for regions with good wind flow. Combined heat and power (CHP) units utilise the energy wasted from energy generation, using the excess heat for heating purposes. Biogas uses organic waste to generate heat and energy, while fuel cells convert excess energy from various sources into usable electricity.  

Benefits of distributed power generation 

Due to its localised approach and the ability to react in real-time to power outages, distributed power generation can reduce transmission losses and improve overall energy efficiency in small generation areas. Distributed power generation also enhances energy security and grid resilience by alleviating the reliance on the main grid. Relying on the main grid for all energy needs can cause security issues, partly due to connectivity issues with legacy equipment and threats from energy hackers, which can cause blackouts and leaking of personal data from grid users. This method also supports decarbonisation by reducing the reliance of residential energy consumers and small businesses on fossil fuels. By offering alternative, affordable, small-scale solutions, distributed generation encourages more widespread renewable energy adoption. This empowers consumers by allowing them to make their own choices about the types and price of energy they procure or generate and also links up local communities to provide energy for their immediate area.  

Challenges of distributed generation 

Distributed generation has to deal with grid integration complexity, including elements such as frequency and voltage deviations, which can be caused by differences in inertia when compared to the behaviour of the main grid. Voltage fluctuation can also damage some types of transmission equipment, requiring more intense proactive maintenance and increased repair costs. Interconnection standards also vary between different renewable energy types, and the grid is yet to be modernised, meaning that more complex regulatory requirements are needed. This, combined with the intermittent nature of renewables, can cause some technical limitations. Upfront costs can also be an issue, as many renewable technologies are not as tried-and-tested as some traditional solutions, return on investments isn’t guaranteed as much as in fossil fuel-centric projects. Balancing supply and demand in real-time is also more possible, because energy consumption can be moved from peak hours to off-peak hours when demand outstrips supply, which reduces strain on the grid during these periods.  

Distributed generation and the future of energy 

Distributed generation will play a key role in smart grids and demand-side management, due to its flexibility and ability to provide back up power via storage batteries. This local element will also make it vital in the electrification of transport and buildings. The system will also allow businesses to align with net-zero and energy independence goals, as they can more easily opt to use energy sources that feed into Environmental, Social and Governance (ESG) goals and to hit impending carbon emission targets. Relying on the main grid and its fluctuating costs may not afford them the same freedom as distributed generation. Distributed generation also fosters emerging models, including developing new energy markets. This might include peer-to-peer trading on purpose-built energy markets, or the more widespread use of virtual power plants. 

As energy systems evolve, distributed generation enables cleaner, resilient, and flexible power, aligning with smart grids, net-zero goals, and future needs.