A Distributed Utility (DU) includes small/modular generation, energy storage and geographically targeted energy efficiency and demand management systems used to complement central generation and utility power transmission and distribution systems.
Distributed generation and storage technologies are often referred to as "distributed" resources (DR).
Using the Distributed Utility concept
reduce cost of service to customers
by deferring or avoiding expensive upgrades to the power infrastructure
especially as usefulness and financial returns become less certain
tailor (and differentiate)
types, quality, and price of service to customers
possibly reduce overall environmental
impacts, depending on which kind of DRs are used, how they are used,
and what energy sources they offset.
In many cases, with DU technology
energy customers will be able to:
manage and hopefully reduce
overall cost of electric and/or all energy
increase power quality and/or
reliability on-site, as needed
utilize more environmentally
sound energy resources, and if applicable
use "waste" (i.e., excess)
heat for process or domestic needs (cogeneration, or combined heat
and power, CHP).
DU technologies and strategies
provide important means for energy services providers (ESPs), also known
as Energy Services Companies (ESCOs) to provide a full range of energy-related
products and services. DU "building blocks" are alternatives to conventional
solutions: central energy supply (i.e., natural gas and power generation)
coupled with an electricity transmission and distribution infrastructure.
For example, ESPs could assist
blocks of utility customers with high utility service cost if the ESP
can aggregate the customer demand and then serve it with DU-based alternatives
-- alternatives that reduce costs and/or increase benefits. The new
DU alternatives may even enable entry of new ESCOs into the energy marketplace.
Finally, as deregulation of the electric utility marketplace continues,
utilities are likely to be required to base the price of energy and
related services on more precise allocation of costs (costs attributable
to serving specific types of customers and/or customers in specific
geographical areas) than they have traditionally. If that occurs, the
risks and rewards associated with use of DU resources can be shared
in a more economically fair and efficient way among all stakeholders.
Distributed utility systems are
small and/or modular electric resources deployed in dispersed locations
within electricity or natural gas distribution systems (i.e., at or
near energy loads). In general, distributed resources (DRs) are deployed
so they address energy (electric, fuel, thermal, or mechanical) and/or
power delivery needs in a manner that optimizes value and/or minimizes
Leading DU technologies that convert
non-electric energy to electricity are diesel, gasoline, propane, or
natural gas fired internal combustion engines, combustion turbines and
microturbines, fuel cells, photovoltaics, wind, and Stirling engines.
Engines and combustion turbine DRs could also be used to provide mechanical
energy (e.g., for air or refrigeration compressors or for industrial
processes) in lieu of electric motors. Engines and combustion turbine
DRs can also be used in a way that produces thermal (heat) energy that
can be used.
Devices that store energy can be valuable DRs if they are deployed
so they significantly offset costs associated with:
purchase of electric energy
adding or upgrading energy
supply and/or delivery capacity (kiloWatts)
improving energy service reliability
improving the quality of electric
These include batteries, supercapacitors,
superconducting magnetic energy storage (SMES), and flywheels.
Systems that store thermal energy
also serve as distributed resources. Perhaps most important are systems
that create and store "coolth" at night when electric rates are low
-- for use during the day when cooling is needed and when electric rates
Side Management (DSM) and Energy Efficiency(EE)
DRs may include carefully targeted
energy efficiency (EE) devices which reduce the need for: a) energy
(fuel or electric) and b) capacity--equipment and infrastructure requirements
for energy supply and delivery. DRs can be demand side management (DSM)
technologies and programs specifically designed to limit maximum local
electric demand (and thus capacity requirements upstream, within the
Among others, DSM/EE DRs can be:
energy management systems (EMS)
time-of-use electric rates
direct load control (utilities
can turn devices off at the customer's site, by arrangement)
interruptable or curtailable
electric service options (customers are asked to shed load to reduce
demand on the utility's infrastructure (supply and/or delivery)
a few times per year, for short periods, in return for a reduced
electric rate) or
utility dispatch of customer's
grid-connected back-up power generation for local and/or for central
By deploying energy conversion,
storage, management, or efficiency technologies at or near end-use locations
with high marginal cost of service, several important advantages may
Potential DR Benefits for Utilities
or other Energy Services Providers
Less energy supply capacity
may be required for equal or better service.
Less energy distribution infrastructure
capacity may be needed to provide equal or better service.
New infrastructure capacity
can be added incrementally, only when and as needed; or, DR resources
can be more easily "redeployed."
Local and/or systemwide utility
service reliability may increase.
Energy losses associated with
transmission and distribution are reduced.
Environmental impacts may be
Excess heat from power generation
may be recovered and sold.
New products and services (relative
to traditional utility offerings) may be provided, such a) premium
quality power, b) "green" energy, c) thermal energy, and d) back-up
power or high reliability electric service.
Potential DR Benefits for Energy