Distributed generation (DG), also known as on-site generation, distributed resources (DR), distributed energy resources (DER) or dispersed power (DP) is the use of small-scale power generation technologies located close to the load being served. The DG marketplace includes energy companies, equipment suppliers, regulators, energy users and financial and supporting companies. For some facilities, DG can lower costs, improve reliability, reduce emissions, or expand energy options. DG may also add redundancy that increases grid security. Facilities can also recover and utilize heat from their DG systems, a practice known as combined heat and power.
The portfolio of DG technologies includes reciprocating engines, microturbines, combustion turbines, small steam turbines, fuel cells, photovoltaics, and wind turbines. Each technology has varying characteristics and emission levels.
DG is currently being used by some customers to provide some or all of their electricity needs. There are many different potential applications for DG technologies. For example, some customers use DG to reduce demand charges imposed by their electric utility, while others use it to provide premium power or reduce environmental emissions. DG can also be used by electric utilities to enhance their distribution systems.
Most traditional DG is interconnection to the grid. The electric power system was designed to produce electricity at large power plants in remote locations, send it over high-voltage transmission lines, and deliver it on lower-voltage utility distribution systems to passive customers. Increasingly, electricity is produced by smaller, cleaner distributed generation units at or near customer sites and connected to the utility distribution system. The traditional one-way power flow – from power plants to customers – is turning into a two-way street.