New dawn for distributed energy

The future of small-scale distributed energy for commercial applications is looking very promising, says Scott Sklar, with new markets springing up all over the world for devices that improve power quality and reliability as well as reduce costs to consumers.

Markets for commercial applications of solar and other forms of clean distributed energy have never been better. Defined here as ‘energy produced on the customer’s side of the meter’, distributed energy systems include advanced batteries and controls, fuel cells, heat engines, micro hydropower, minigeneration (natural gas), modular biomass, PV, small wind, cogeneration and solar thermal. In terms of sales volumes, Germany, Japan and the US (primarily the state of California, with Illinois, Massachusetts, New Jersey and New York following strongly) lead the world. While these markets have until recently been largely supported by public funding from national and local governments, market forces are, increasingly, driving the continuing expansion of distributed energy systems.


Power reliability and power quality offer a critical business benefit. Shown here is a solar pumping unit installed in California to power an irrigation pump and lighting system for the barn and farm offices (Locke Ranch, Inc.)

Market forces driving the commercial and industrial use of clean distributed electricity generation fall into four distinct areas.

First, the industrialized nations have made a significant transition over the last 20 years to digital controls and electronic equipment (communications, computing and security, among others). This newly sophisticated equipment is much more susceptible to the power surges, swells and transients within electricity grids which, due to age, over-capacity and changes in generation (particularly at peak times), have had a hard time maintaining a good-quality power supply. In fact, utilities try not to admit there is a problem since these costs fall to the customer and they do not want any potential liability to fall on them. Traditional grounding and battery banks to absorb electric power swings have had limited success in these situations.

A second Indian miracle

The growth of local, bagasse-fuelled cogeneration capacity in India amounts to the start of a second ‘Indian miracle’, resulting as it does in increased amounts and reliability of electricity supplies to some of India’s rural villagers, writes Thomas R. Casten. There is also scope for much more bagasse and other industrial waste-fuelled generation to benefit both local people and the environment.

A distributed generation (DG) revolution has begun in India with 87 new local power projects producing 710 MW from sugar cane waste. Even if the existing generation and transmission was adequate, these projects would save Indian society US$131 million per year while reducing both conventional pollution and greenhouse gas emissions. When fully implemented, the DG revolution could save India nearly $1 billion per year and slash carbon dioxide emissions by 38 million tonnes per year, compared with conventional central generation.

But existing generation is not adequate, with about 75 million households, or 69% of rural households, without access to electricity. The Ministry for Power seeks to add 100 GW of generation to the existing 108 GW, and estimates a need for $1 billion/MW for generation and $0.5-1.0 billion/MW for new transmission and distribution (T&D) equipment. Hence, the rapid construction of new power plants by the private sector, fuelled by sugar cane waste and located in the heart of rural areas, has a value far beyond the savings compared with central generation.

India could save nearly $1 billion per year with its 87 new local power projects, producing 710 MW from sugar cane waste (UNICA)


In the 1960s, world population began to exceed food production, leading to widespread starvation in under-developed countries. Some scholars concluded that world agricultural systems could never support the growing population, and they went so far as to suggest the world practice ‘triage’ on much of Asia, writing off India and China and concentrating efforts on feeding people in other countries. Before the ink on these Malthusian analyses dried, a miracle began to take shape – the green revolution.

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