Understanding the potential benefits of distributed generation on power delivery systems

Distributed generation offers the potential to offset traditional utility investments in distribution, transmission and generation facilities, and improve service to customers. Matching this potential to specific customer needs, and evolving technologies with current economics remains an ongoing challenge. Recent successes have involved strong customer needs, usually of commercial customers, matched to fossil fuel distributed generation systems that meet reliability and economic targets. Many utilities, through its subsidiaries, have been active participants in this marketplace. Distributed generation is starting to expand its reach to address electric utility power delivery needs as a means to offset the cost of system expansion. This paper provides an example method to analyze this potential. It also shows that while power delivery savings can be significant, these must also be matched with additional customer benefits to make distributed generation economical. Also, once the potential fit of the technology and economics is established, a wide range of local and operational issues surface that challenge field implementation.