Semantic Hype or the Dawn of a New Era?
by hans b. püttgen, paul r. macgregor, and frank c. lambert
© CORBIS CORP.
IEEE power & energy magazine
AS THE ELECTRIC UTILITY INDUSTRY CONTINUES TO RESTRUCTURE, driven both by rapidly evolving regulatory environments and by market forces, the emergence of a number of new generation technologies also profoundlyinfluences the industry’s outlook. While it is certainly true that government public policies and regulations have played a major role in the rapidly growing rate at which distributed generation is penetrating the market, it is also the case that a number of technologies have reached a development stage allowing for large-scale implementation within existing electric utility systems. At the onset ofany discussion related to distributed generation, one question begs to be answered: Is the fact that electric power producing facilities are distributed actually a new and revolutionary concept? Have power plants not always been located across broad expanses of land? The answer to these questions clearly is that electric power plants have always been sited all across the service territories of theutilities owning them. Hence, the opening question: As with many so-called innovations that have been put forward during the recent past, is the entire concept of distributed generation a simple semantic marketing hype or are we actually at the dawn of a new elecISSN 1540-7977/03/$17.00©2003 IEEE january/february 2003
tric power generation era? We believe that a new electric power productionindustry is emerging, and that it will rely on a broad array of new technologies. This article sets the stage for further coverage of distributed generation to appear in future issues of IEEE Power & Energy Magazine.
Present Power Production Situation
Since the beginning of the twentieth century, the backbone of the electric power industry structure has been large utilities operating withinwell-defined geographical territories and within local market monopolies under the scrutiny of various regulatory bodies. Traditionally, these utilities own the generation, transmission, and distribution facilities within their assigned service territories; they finance the construction of these facilities and then incorporate the related capital costs in their rate structure which is subsequentlyapproved by the relevant regulatory bodies. The technologies deployed and the siting of the new facilities are generally also subject to regulatory approval. Three major types of power plants have been constructed primarily: ✔ hydro, either run-of-the-river facilities or various types of dams ✔ thermal, using either coal, oil, or gas ✔ nuclear. Until the end of the twentieth century, othergeneration technologies only had an incidental impact. Table 1 shows the installed capacities on a worldwide basis at the end of the twentieth century. As we look into the future, all three technologies mentioned above have their own sets of problems associated with them: ✔ Given their friendly environmental impact, hydro power plants are most often the preferred generation technology wherever andwhenever feasible. However, the identification of feasible new sites in highly industrialized countries is becoming increasingly difficult. In highly developed countries, where the cost-attractive traditional hydro facility sites have been almost entirely built, some power plants could be, and are, reconfigured to become pumped-storage facilities. On the other hand, while hydro electric power productionis saturating within industrialized countries, it represents very significant development opportunities in several devel-
oping regions of the world. While hydro power plants do not create any pollution related to their daily operation, they do bring significant environmental and often societal upheaval when they are constructed. Recently completed facilities or on-going construction projects...