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Central Generation versus Decentralized Energy
By far the most common means of generating electricity in most countries around the world is via centralized generation. Whether a central plant is a 1000MW coal plant, a wind farm, a large dam or a nuclear reactor the model is the same. The plant is typically located some distance from where the power is required. Electricity is generated on large scale then transmited at high voltage via transmission towers often great distances. Voltage must then be stepped down to a distribution level, sometimes more than once, and further transmited to end customers. Between 5 and 10% grid losses are common as a result of transmiting power large distances. This means that central generators must generate 5-10% more power than is required. Indeed, an additional 5-10% of generating capacity is required to meet meet demand and this means additional capital funds must be spent that could be avoided if DE was instead employed.
Different Infrastructure Requirements
Building decentralized energy ensures optimum use of existing energy infrastructure such as gas pipelines and electricity distribution and transmission wires. As more and more DE is built in a region the infrastructure needs are likely to evolve. We may witness a shift may occur from building both fuel pipelines and power wires to more of an emphasis on pipelines and other fuel delivery infrastructure for distributed generators. Pipelines are a much more efficient way of moving energy than high voltage wires and therefore more environmentally friendly. As very small generators become more common we will also see an increase in investment in smart metering and power control devices. High tech computers will be phased in to replace obsolete technologies. Work by WADE suggests that these shifts are likely to displace the need much infrastructure spending and save utilities and governments fortunes.
Reduced need for T&D
Because DE generates electricity where electricity is needed (on-site) the need for power transmission and distribution investment can also be greatly reduced. Logic tells us that if you are generating power where you need it there is no need to build wires to take the power where it has to go. There remains a good argument for keeping wires around for backup purposes in case the onsite power breaks; but, need for wires investment becomes less of a priority. Evidence tells us that dollars can go further if invested in on-site generation rather than transmission and distribution.
Reduced need for generation capacity to meet anticipated demand
There is an even more compelling argument for DE investment when you consider something called “peak lines losses”. Some electrical energy that is generated is invariably lost when it is transported via wires: the more power running through the wires the greater the losses. Therefore the biggest losses occur at “peak” times- the time of the day when businesses and homes are demanding the most power. If DE is built near the areas which demand the most power at peak times DE can not only alleviate the need for investment in wires but also the need for central generation itself.
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