Distributed Electric Power Generation Ready for Prime Time

8/21/2003 - For years, distributed generation technologies - fuel cells, microturbines, reciprocating gen sets, static turbine switches, and others - have been considered 'alternative' and optional. The primary markets for these systems were the Federal Government, mission-critical aware companies, and forward-thinking regional utilities. No industry mandate or regulatory compliance issues drove the investment and installation of distributed generation (DG) and grid power alternative (GPA) technologies.

And so, when the lights went out on Friday, too many public sector offices, important business facilities and local utilities were stopped cold. For these organizations, DG/GPA was a little known or perhaps too expensive solution.

The distributed generation industry has more than a decade of well-documented, successful implementations in hundreds of infrastructure settings. Some of the largest industrial manufacturers in the world operate business units focused on the design, development, installation and support of DG/GPA technologies and systems. Their solutions are not inexpensive - until the grid is strained and power goes brown or black.

Electricity consumption in the US has grown more than 30% per year for the past 15 years. During that time peak load demands have grown even faster. The recent blackout in the Northeast and Midwest put an exclamation point on the need for increased, or better allocated investment in North America's power infrastructure.

Hindsight is allegedly 20/20. In 2002 20.3% of companies interviewed estimated downtime costs at between $10,000 and $100,000 per hour. More money should have been invested in a number of infrastructure support initiatives including DG/GPA. For the companies with the most significant losses, they now have their own ROI models to justify a DG project.

For the companies with limited vision that continue to support mission-critical services or national security initiatives, there should be a federal mandate requiring an alternative power plan - one that includes DG/GPA. For companies in either category that cannot reasonably afford a DG/GPA solution, the DG/GPA industry and the United States government should collaborate on alternative financing for mandatory distributed generation.

For nearly a decade, VDC has been covering the DG/GPA industries in North America. Our most recent report, published in the second half of 2002, provides detailed profiles of leading and emerging DG/GPA technologies and suppliers. Among its findings are three factors critical to successfully securing the national power grid with DG/GPA technologies:

  1. Reduction in DG/GPA-related costs, including: tariffs, interconnection fees, stand-by charges, disconnect charges, net metering, and others
  2. Definition of DG/GPA and related grid safety and support infrastructure
  3. Education for the end-use customer on the costs and benefits of DG/GPA solutions

Call VDC today (508) 653-9000 X120, ask for Marc Regberg, or visit www.vdc-corp.com/dgn, to receive a free primer on the DG/GPA markets. Our latest DG/GPA research is available for $4,999.

About VDC
Founded in 1971, VDC is a technology market research and consulting firm that specializes in industrial and commercial electronics, computing, communications, software and power systems markets. For further information about "The North American Market for Distributed Generation" or any other VDC service contact: Marc Regberg, VP 508-653-9000, ext. 111, msr@vdc-corp.com

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