Oyster Bay, NY - July 29, 2004

The Californian energy industry was in the news again this week, as hot weather sent electricity consumption to all-time highs. Assurances were given that thanks to recent increases in generating capacity, blackouts like those of the past are unlikely.

But if demand continues to increase, generating capacity will once again fall short. The inefficiency of the transmission network compounds the problem according to Atakan Ozbek, director of energy research at ABI Research. Losses often account for almost 10% of what is produced in the developed countries such as the US and occasionally as much as 30% in the developing countries. "While power plants may have been modernized," he says, "the transmission network is ageing badly."

Distributed power generation is not a cure, but Ozbek says it can ease the burden on overstretched networks in the industrialized world, and provide a full solution in some remote or developing regions.

ABI Research's report, "Distributed Generation: Growth Forecasts for Fuel Cells, Photovoltaics, Wind Turbines, Reciprocating Engines, and Small Gas Turbines," outlines technological issues and growth prospects as well as the business and regulatory landscape in the DG sector worldwide.

Distributed generation doesn't just mean building more regional power plants. Even a single large factory, or an industrial park, can have a small plant that serves it alone. Large utilities have often seen such ideas as threats to their business, but, says Ozbek, they should see them as an opportunity instead. A steel company wants to make steel, not electricity: power utilities could build and operate such a dedicated power plant to the benefit of all.

"Distributed generation can ease the pain," Ozbek says, "sometimes momentarily, and sometimes for a longer period. Even if five or ten percent of the total comes from distributed generation, it can help."