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The Impact of Distributed Generation

Distributed generation is getting increasing attention for impact on the electric utility industry.  DG has been the subject of a number of high profile articles in Business Week, the Wall St. Journal and several online business and industry news sites.  The Business Week article was particularly provocative, leading with the title, “Why the U.S. Power Grid’s Days Are Numbered“.

Residential DG, primarily solar, remains relatively sparse in the U.S. compared to Europe, especially Germany.  Commercial/Industrial DG is getting greater penetration with large initiatives such as Walmart installing solar on the top of every store, and low-priced natural gas leading industrial customers to generate their own power.  Although circumstances differ, the September 17, 2013, WSJ article, “In Post-Tsunami Japan, Homeowners Pull Away From Grid”, describes how Japanese homeowners could foreshadow even more disruption.  While residential fuel cells are not presently economical, higher volume production and deployment in Japan could certainly change that.  Low cost fuel cells could enable every customer with natural gas service to make the economic analysis about when or whether it’s worth turning to self generation. Read More »

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