National energy efficiency standards can also make a major contribution to lighter loads. As result of a series of standards from the US federal government, for instance, refrigerators sold today use about one quarter of the electricity they did in the early 1970s, while providing more storage space and better consumer features. Numerous other examples demonstrate that thoughtful and prudent national standards can make a real difference.


As proponents of cogeneration and on-site power systems know, distributed generation (DG) offers an equally promising set of solutions and benefits. DG means producing electricity close to the user, rather than generating and transmitting it from large, remote central power plants. Over the last few decades, DG has become a viable and cost-effective strategy for generating clean, full-time power on-site from a range of technologies – turbines, engines, fuel cells, photovoltaic panels – powered by natural gas, biogas, propane, hydrogen, and solar and wind energy.

Northern’s new headquarters located in Waitsfield, Vermont.The facility will house the generating equipment to be used in the Mad
River Park MicroGrid power network (Bast &
Rood Architects)
Microturbine (Northern Power Systems)

These systems can operate in parallel with the main grid, providing some of the power required by a business or home while the grid provides the rest. In the event of an outage, the more advanced DG systems have the ability to isolate themselves almost instantaneously and continue to power critical systems in an office, factory or home.

DG can be more efficient than central station generation, because on-site power production avoids the transmission losses inherent in moving electricity over long distances. DG also allows heat from the generating process to be captured and used on-site for space heating or industrial processes. As a result, an office or factory deploying on-site generation can make effective use of waste heat, increasing reliability and cutting its overall energy costs by displacing natural gas, fuel oil or propane used to produce space or process heat.

– in international cogeneration markets

International markets for cogeneration and decentralized energy are poised to enjoy a period of expansion over the next few years, but modern markets are complicated and volatile. Risk management and effective management of ‘boom and bust’ cycles and variable regulatory environments will all be important. To be successful, suggest Michael Brown and Simon Minett, companies will need to develop strategies based on thorough market knowledge.

An expanding market is no guarantee that all suppliers to that market will flourish. This will be so especially where different market segments grow unequally, or have varying needs. The airline industry is a fine example. Air passenger traffic will almost certainly continue to expand in the future, yet the two main aircraft suppliers, Airbus and Boeing, have radically different strategies for capitalizing on this market expansion. The enormous new Airbus A380 can carry 555 passengers and its maker believes that there is a market for over 1100 of these giants; Boeing believes that the market is less than 350. Airbus believes that the current passenger model of connecting through major ‘hub’ airports will continue to be reinforced; Boeing thinks it will decline as more passengers prefer to fly non-stop on a point-to-point basis with more frequent services. One, or both, of them is likely to be wrong, perhaps very wrong. One of them certainly has not done its homework properly – it has the wrong strategy.

There are lessons here for the many hundreds of companies worldwide that operate in the cogeneration and decentralized energy (C/DE) sectors, whether as project developers, equipment manufacturers or service providers. In our view, the future prospects for this market are very good; but to capitalize effectively, market players will need to develop and implement well informed strategies that are based on a deep knowledge of the ever-changing market conditions under which C/DE operates. This article provides examples of some of the less familiar pointers to C/DE businesses as they seek to capitalize on the promising market conditions that may be just around the corner.


Emerging optimism for the C/DE market is widely based. There are certainly increasing indications that international markets for C/DE projects, equipment and services are picking up. While the overall picture remains patchy, confidence is beginning to flow back into the sector. Looking ahead, there are expectations that the period 2005-2010 might be good for the industry, possibly very good. Say it quietly, but there may even be a worldwide boom.