Distributed Generation

Canada’s current power grid was designed to transmit electricity from a power plant often in a remote location to large-scale industrial users and households in large populated areas. This grid was not designed to meet the needs of the growing demands of a digital society or the increased use of renewable power production. Consumers however are increasingly demanding low cost and more reliable and cleaner electricity.

As a result, renewable energy sources are becoming a more critical component of Canada’s energy mix. These renewable and cleaner energy technologies involve much smaller scales of production than the traditional large hydro, nuclear or thermal power plant. The approach that employs small-scale technologies to produce electricity close to the end users of power is referred to as Distributed Generation (DG).

But the question remains, how can these smaller scale energy sources fit within the larger traditional electrical systems and what are the advantages and disadvantages of each approach? Distributed Generation power often utilizes renewable energy technologies including run-of-river, tidal current, windmills and various biomass-generating technologies. Natural gas powered generators could also be used in a Distributed Generation capacity.

As opposed to the traditional grid where electricity is carried long distances to the end user, Distributed Generation offers a number of tangible advantages over the traditional grid. Distributed Generators often provide lower-cost electricity and greater reliability and security with a lower environmental footprint than traditional power generators. Central power plants, while historically producing relatively cheap electricity based on coal-fired thermal plants, nuclear or large-scale hydroelectric dams have the distinct disadvantage of lengthy transmission lines, heavier carbon footprints especially for coal fired systems, and higher security risks.

These disadvantages can be mitigated through employing smaller modular generating facilities such as solar panels that are very near to the end users. Furthermore, the end user is able to sell back to the grid unused electricity, whereas, a considerable amount of power is lost in the transmission and distribution for traditional systems. According to the International Energy Agency, “broad deployment of Distributed Generation could result in cost savings of nearly 30% of total electricity costs by mitigating transmission and distribution losses and displacing expensive infrastructure” In many regions of Canada large, centralized power plants in addition to greenhouse gases emit significant industrial emissions including, sulfur oxides, particulate matter and nitrogen oxides.

Greater use of Distributed Generation technologies can substantially reduce both greenhouse gas and industrial emissions. Distributed Generation technologies as they are independent of the grid are better able to provide emergency power to hospitals, police stations, airports and water and sewage treatment infrastructure. Distributed Generation technologies including solar power, wind, tidal, wave, run-of-river and fuel cells provide considerable market opportunities for Canadian developers and potentially thousands of jobs will result as these opportunities are realized.

In addition to the considerable business (and employment) opportunities associated with Distributed Generation, there are many isolated communities in Canada that are off the grid and are generating power through very expensive and highly polluting diesel generators. Power is essential for the socio-economic development of every region of Canada and is a basic infrastructural requirement. Smaller generating technologies will enable these remote communities to produce cheaper and cleaner power, which is urgently needed by both households, and will provide electrical power for potential new industries to emerge such as aquaculture and sawmills that could offer these isolated communities’ economic stability.

Without adequate generating capacity communities that are off the grid have virtually no potential to attract new industries even if they have a significant resource base including fish, mining and forest products. Small generating technologies offer a new dynamic for these communities to possibly grow and thrive. And, once they are on the grid any unused electrical power can be re-distributed and provide financial gain to the community.

Table 1.1 Matrix of Distributed Generation Benefits was originally published in a United States Department of Energy report The Potential Benefits of Distributed Generation and Rate-Related Issues That May Impede Their Expansion [February 2007] illustrates the significant benefits of the Distributed Generating model. The only disadvantage that is not illustrated in Figure 1.1 is that many of these smaller energy technologies are currently more expensive than the larger more traditional power facilities. But this is changing, as these smaller technologies are becoming more cost effective and experiencing declining costs.

The graphs below show potentially rapidly declining cost curve scenarios that were developed by United States National Laboratory for Energy Renewal for wind, solar voltaic, geothermal, solar thermal and biomass. In addition to the considerable benefits associated with Distributed Generation technologies, the introduction of the so-called “smart grid” will undoubtedly provide additional benefits by saving energy, reducing costs and increasing reliability by through the use of two-way communication that works interactively with electrical appliances, electric vehicle charging systems and the two-way flow of small-scale renewable energy between the user and the grid depending on power-flow needs. The potential benefits of Distributed Generation are substantial.

However, the Distributed Generating model is not a threat to the continuing viability and sustainability of the electrical grid. Both large scale and small facilities in an optimal system will efficiently provide power to both large industrialized areas and to remote communities. And, the greater emphasis on Distributed Generating systems both within and off the grid will result in considerable cost savings, lower greenhouse gas and industrial emissions, improved power quality (less brown outs and black outs), improved security of the electrical supply and highly skilled and high paying jobs.

The opportunity is there, but we must take the necessary steps to capture it. Kenneth White is an economic consultant who works and lives in Port Coquitlam British Columbia. His web site is href=”http://www.actonwhite.com” target=”_blank”>www.actonwhite.com