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EDINBURGH, Scotland, May 31, 2006 (Refocus
Weekly)
One-quarter of the electricity output from new
power generation facilities last year was derived from decentralized
energy (DE) systems, almost double the share of 13% in 2002.
A high portion of DE generation is based on high-efficiency
cogeneration (CHP), which accounts for the majority of the capacity
and generation additions, according to the latest annual market
assessment from WADE. Standby and peaking DE systems have lower
shares, while “PV and onsite wind sectors continue to enjoy high
global growth rates although their share of the overall DE market
remains small.”
“DE's growing competitive position is based on a rapidly emerging
recognition of the economic benefits of generation at the point of
demand which results in reduced need for high cost investment in
transmission and distribution networks,” concludes ‘World Survey of
Decentralized Energy - 2006.' “Other drivers include the
environmental benefits, fuel savings and increased security of
electricity supply.”
Of power generation plants installed in 2005, 24% of electricity
output was derived from DE systems, which WADE classifies regardless
of project size, fuel or technology, or whether the system is
on-grid or off-grid. Among the technologies included under the term
‘DE’ are high-efficiency cogeneration, on-site green power and
energy recycling systems.
The share of DE power generation in the global market increased to
7.2% by 2004, up from 7% in 2002.
“The long discussed and expected transition from a central power
model to a ‘hybrid’
DE-central mix may possibly be underway, though slowly,” the report
notes. “WADE is optimistic that this market share will continue to
expand.”
WADE's goal is to achieve a 20% market share of total capacity for
DE by 2025, compared with the current level of 9%. “This goal now
appears achievable provided that persistent policy and regulatory
barriers (based on the continued conventional wisdom that remote
central generation based on large power plants remains the optimal
form of power generation and supply) are eliminated,” the report
notes. The share of DE generation in Denmark, the Netherlands and
Finland is 40% to 50%, which provides “clear evidence that such a
goal is not only achievable, but is consistent with the provision of
efficient and reliable generation.”
A profile on market development in Europe shows that DE “continues
to emerge slowly - but only slowly - from its extended downturn that
began in 1998,” with the most prosperous markets on the fringes of
the continent in the south, south-east and east (Italy, Turkey,
Hungary). “Elsewhere, they are sluggish, especially so for
industrial schemes.”
DE systems based on renewable energy represent more active markets
but, in certain countries, a clear decision on future investment in
nuclear “may have dramatic, and adverse, impacts on market
conditions for all forms of generation, including DE and renewable
energies,” it notes. The rising price for carbon offset projects in
emerging markets is surging and driving DE projects throughout
non-OECD countries, and “a rapidly-growing number of renewable- and
fossil-based DE projects in Brazil, China, India and elsewhere are
going forward on the basis of carbon price incentives.”
The model used to produce the report enables users to run any number
of scenarios that favour certain technologies or meet specific
environmental goals, and WADE developed a renewable scenario for the
UK as a direct alternative to the centralized baseline scenario.
WADE also ran scenarios for sensitivity analysis of changes in
fossil fuel-prices and the amount of investment in nuclear,
combined-cycle gas and in renewable energy facilities.
WADE is a research and advocacy organization established in 2002 to
accelerate global deployment of DE systems.
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