Power plants are one of the most prominent features of the electric grid. They’re large, intricate structures where electricity generation takes place, and they’re a key part of the power systems that provide us with electricity service. But small-scale options are beginning to change the way the energy industry handles power generation.
Distributed energy resources (DERs) are an emerging category of energy technologies in which power is either generated onsite at a residence or commercial building, or else very close by. Because power is generated from multiple local sources rather than one distant, centralized power station, DERs have the added advantage of addressing the inconvenience — and sometimes catastrophic consequences — of power outages not to mention the aging power grid in the U.S.
Let’s explore distributed energy resources, how they work, and what they might mean for our energy future.
What Is Distributed Energy?
Distributed energy is an electricity generation system that uses a variety of small-scale devices rather than one centralized system operator and distribution network. Distributed energy resources often have a capacity of one megawatt (MW) or less, but they can also include utility-scale generators with greater capacity.
More broadly, “distributed” and “centralized” energy refer to two different approaches to creating an energy distribution system. It’s worth trying to understand how the distributed and centralized approaches are distinct. An easy way to do this is to consider a couple of examples from the extreme ends of the spectrum.
In a maximally centralized energy system, a single electric utility (probably the government or a government-backed monopoly) would be responsible for all electricity generation on the power grid within a specific country. On the other hand, in a maximally distributed energy system, all power generation would occur at individual buildings, and everyone would effectively be their own grid operator.
Of course, today most power generation systems are nowhere near these two extremes. In the United States, for example, electricity is sold to consumers by a variety of different entities, including investor-owned utilities, public-sector firms, cooperatives, and other providers. Since power companies tend to be fairly large, we are closer to a centralized system than a distributed one, but we’re still far from being fully-centralized.
What Are Examples of Distributed Energy?
Distributed energy resources can be used to supplement electricity needs in a number of different locations. While many DERs use clean energy sources, it’s worth noting that some can run on fossil fuels. Here are some ways in which distributed energy resources are used as upgrades to residences and industrial sites.
- Solar photovoltaic (PV) and rooftop solar panels: Clean energy has become more popular over the past few decades, and today as much as a third of solar energy produced in the United States comes from small solar installations such as the solar panels seen on the rooftops of homes. These are examples “photovoltaics” in which energy from the sun is absorbed and converted to electricity.
- Small wind turbines: Though we usually picture wind turbines as very big structures, there are also much smaller models that can contribute electric power generation to a home. As long as you live in a place with enough wind energy, these microturbines could be a viable option.
- Fuel cells fired by natural gas: Among the many ways of generating power from a fuel source, fuel cells are the most efficient. Fuel cells can take a variety of fuel sources, including biogas, natural gas, and plain hydrogen.
- Backup generators: There are many different kinds of backup generators that can provide power in case of an emergency (such as an extreme weather event) when you experience electricity disruptions.
What Is Distributed Energy Storage?
Power isn’t just generated and used immediately. A variety of energy storage technologies exist to store energy and make it available when it’s needed.
Distributed energy storage refers to technologies that complement distributed energy resources, making it possible to create power onsite or nearby and keep it handy for later use.
This isn’t simply a matter of convenience. Without good energy storage technologies, it would be impossible to ensure the reliability that modern, advanced industries require. Unreliable energy would make many aspects of life — from medical procedures to cross-country flights — much more precarious, reducing the functionality of the systems we rely on.
Perhaps the most common form of energy storage is battery storage. Batteries are found in remote controls, baby monitors, and many other everyday devices.
A related but less common example is electric vehicles, which can store power in their lithium-ion batteries. In addition to their function as energy loads, electric vehicles can also act as power generators, putting stored energy back into the grid when demand is high.
What Is Distributed Renewable Energy?
Distributed energy refers to creating and storing energy somewhere near the point at which it will be used rather than generating and transporting it from a far-off location.
In principle, distributed energy can come from almost any fuel source, including fossil fuels, solar panels, and backup generators. Nevertheless, in the ongoing battle for sustainability, many are exploring the possibility of building DERs that rely solely on renewable energy.
Rooftop solar panels are one obvious example of distributed energy resources powered by clean energies. There are also efforts aimed at using reliable renewable options such as hydroelectric power, biomass, and wind turbines small enough to power residences or offices.
How Does Distributed Energy Reduce Carbon Emissions?
Human activity, especially large-scale industrial activity, produces carbon dioxide. This greenhouse gas significantly contributes to the overall warming of the planet and climate change. For this reason alone, it’s important to explore a variety of different ways to reduce carbon emissions —and this is one place that distributed energy resources can help.
One way in which DERs can reduce carbon emissions is by making it easier to switch to alternative fuel sources. As solar panels become more prevalent and affordable, it will be possible for more of a home’s energy budget to come from solar power instead of fossil fuels such as natural gas, for example.
Likewise, electric vehicles are a type of distributed energy resource that can decrease reliance on oil substantially, acting as a key component in the transition to cleaner energy.
What Are the Benefits of Distributed Energy?
Over the past 10 years, the use of DERs has increased, and this is in no small measure because they provide a variety of benefits to end users — including the ability to reduce carbon emissions when using renewable sources for power generation. We can broadly group these benefits into two categories: energy efficiency and energy reliability.
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Distributed Energy Resources Can Increase Energy Efficiency
Choosing a cost-effective DER can save on energy costs, meaning lower energy bills and less financial strain. Because electricity is generated locally rather than from a distant power plant, less energy is lost in transmission, resulting in better energy efficiency.
In fact, the U.S. Energy Information Administration estimates that “about 5% of the electricity transmitted and distributed in the United States in 2017 through 2021” was lost during transmission. Furthermore, DERs can scale up and down based on demand, or if they feature energy storage systems that let them draw on reserves later, it also becomes easier to “balance” the generation of power on the main grid.
Distributed Energy Resources Can Increase Energy Reliability
According to the U.S. Department of Energy, “More than 70% of the nation’s grid transmission lines and power transformers are over 25 years old, creating vulnerability.” DERs can directly contribute to increased energy reliability because it means power service is less vulnerable to a single point of failure.
In other words, if 100% of your energy comes from the local supplier and that supplier has a disruption, you’ve lost 100% of your energy. If you have solar panels, a backup generator, and/or a small wind turbine, however, you’ll be able to meet at least some of your energy needs while the local supplier fixes the issue.
In addition, distributed energy resources can also be networked into a microgrid that can act independently of the main electricity grid. Whereas the U.S. power grid refers to the sum total of power stations and transmission lines, which carry power across the country from California to New York and everywhere in between, a microgrid is a much smaller, local grid version comprised of an interconnection of homes and buildings.
Whether they’re used to power individual homes or to form microgrids, DERs make the power grid more flexible and resilient. For both individual users and businesses, distributed energy resources offer a panoply of different benefits that make them attractive options.
DERs Could Make for a Cleaner, More Resilient Energy Grid
We’re still in the early stages of understanding distributed energy resources and how they’ll impact the power grid, but the evidence so far is very promising. Whether it’s lowering a monthly energy bill by installing rooftop solar panels, protecting yourself from inclement weather with a backup generator, or contributing to the fight to reduce carbon emissions and improve the sustainability of energy production, there are myriad occasions in which it makes sense to generate and use power locally.
As the demand and need for distributed generation of power continue to grow, new approaches to DERs will be developed, making the grid less susceptible to single points of failure while cutting carbon emissions and costs. In the meantime, you can learn more about how you can boost your energy efficiency at home to save money and even help save the planet.
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