Policies – WADE : World Alliance for Decentralized Energy

Policy to Promote DE

Every region in the world has unique culture, climate, legal heritage, market structure and development priorities, so not all policies are equally suited for every region. Nevertheless, regions have enough in common that, in all cases, it is a valuable exercise for area X to take a look at what area Y is doing in the process of determining its own regulatory framework. Invariably policy makers look at nearby neighbours and trading partners for inspiration in coming up with effective policy. Even though at first glance it may appear there is little in common, looking at other areas a little farther away may bring some unexpected inspiration.

Regulation is more than rules. Effective regulation can take many forms as shown in the table below.

Types of Regulations
laws and legislation	renewable portfolio standards (RPS), cap and trade schemes, certificate trading schemes, emissions rules, disclosure labelling, feed-in laws, delegated accountability, legislated directives, etc.
standards	interconnection standards, procedural standards, building standards, product quality standards, etc.
voluntary guidelines	quality guidelines, DE targets, etc.
financial	tax schemes, accelerated depreciation, grant programs, system benefits charges, financing schemes, etc.
pricing mechanisms	locational pricing, dynamic pricing, etc.

Best Practice

Almost every jurisdiction in the world has some basic energy policy. To date very few have policies that focus specifically on DE. Nevertheless there are various policies can be pointed out around the world that can be considered “best practice” to the extent they address issues, directly or indirectly of direct relevance to DE. Important policies, studies and planning documents relevant to DE include:

Jurisdiction	Document
Canada	Distributed Generation Technical Interconnection Requirements
Canada	Green Energy Act Introduced to Ontario’s Provincial Parliament
Canada	Quest White Paper English
Canada	Quest White Paper French
The European Union	The European Cogeneration Directive
The European Union	The Internal Electricity Market Directive
The United States	The Potential Benefits of Distributed Generation and Rate-Related Issues That May Impede Their Expansion
The United States	The Energy Policy Act
Brazil	Law 10,848 on the Commercialization of Electricity
Brazil	Executive Decree 5,163/04
Spain	RD 436/2004
Spain	RD 2366/1994
UK	Meeting the Energy Challenge. A White Paper on Energy
UK	Review of Distributed Generation

The IEA also maintains two useful databases:
Energy Efficiency Policies and Measures Database
Global Renewable Energy Policies and Measures Database

Term	Acronym	Notes
Decentralized Energy	DE	Electricity production at or near the point of use, irrespective of size, technology or fuel used - both off-grid and on-grid. DE includes high efficiency cogeneration (CHP), on-site renewable energy and industrial energy recycling and on-site power.
Renewables/ Renewable Energy	RE	Energy sources that are naturally replensihed in the short term, including non-carbon technologies such as solar energy, hydropower and wind as well as carbon-neutral technologies such as biomass. There is considerable overlap between renewables and DE. When renewables are used to generate power where it is required renewables can be said to fall within the DE definition. On the other hand large wind farms, that are built remotely from where the electricity is used, do not fall under the DE definition.
Distributed Generation	DG	Often used interchangeably with DE although sometimes DG refers to power only whereas DE includes thermal energy and electrical power.
Microgeneration		Very small scale applications of DE- usually at the scale of an individual home.
District Energy (District Heating/Cooling)	DE/DH/DC	Production of steam, hot water or chilled water, or a combination of the three, at a single central plant for distribution to other buildings through a network of pipes. The term is closely related to DE. It often, but not always, overlaps with DE. When district energy systems employ waste heat from electricity generation to supply heating/cooling networks they can be considered DE. In some cases, however, district energy plants are used in heat only applications in which case they are not considered DE.
Combined Heat and Power	CHP	The simultaneous production of both electricity and useful heat. CHP can be on any scale from very large applications in refineries to tiny machines in individual homes. CHP is one type of DE.
Cogeneration		Term used interchangeable with 'combined heat and power'. Cogeneration is the simultaneous production of both electricity and useful heat. Cogeneration can be on any scale from very large applications in refineries to tiny machines in individual homes.
Combined Cooling Heating and Power/Cooling Heating and Power	CCHP/ CHP	CCHP is the simultaneous production of electricity and useful heat and cooling (usually by a heat powered chiller). CCHP is one type of DE.
Trigeneration		Term used interchangeably with CCHP. Trigeneration is the simultaneous production of electricity and useful heat and cooling.
Uninterupted Power Supply	UPS	Term often used to describe on-site power, especially in the context of emergenecy power for computers. The term is usually associated with fossil-fired generators and implies power only applications, however it can also refer to applications where waste heat is recovered in which case greater environmental benefits would be realized.
Backup Generator		Usually associated with fossil-fired generators and implies power only applications, however it can also refer to applications where waste heat is recovered in which case greater environmental benefits would be realized. Renewable technologoiges are also increasingly being employed to provide backup power.
Captive Power		Term closely related to DE often used to describe on-site power. The term can imply either power only or cogeneration applications.
Embedded Generation		Closely related term often used to describe on-site power. The term can imply either power only or cogeneration applications.
Micro grid		A collection of DE technologies grouped together in a specific area and often connected at a single point to the larger grid.
Distributed Resource	DR	Often used interchangeably with 'Decentralized Energy' or 'Distributed Generation' but because a resource can also be either supply or demand side DR also includes conservation measures at the point of consumption.