What is Distributed Generation?
Distributed generation is any electricity generating technology installed by a customer or independent electricity producer that is connected at the distribution system level of the electric grid. This includes all generation installed on sites owned and operated by utility customers, like solar photovoltaics serving a house or a cogeneration facility serving an office. It also covers any commercial-scale generation that is connected to the grid at the distribution level, rather than the transmission level.
How Does the Electric Grid Work?
The conventional electric grid is a web of interconnected systems that move electricity from generators (the power plants that produce electricity) to customers. These parts are as follows:
- Generator: Produces electricity, typically at large, central power plants.
- Transmission System: Transmits large amounts of electricity from the generator over high-voltage wires to the distribution system.
- Distribution System: Reduces the voltage of electricity from the transmission system through substations and distributes it over lower-voltage wires to individual customers within a region. The local utility (Fitchburg Gas & Electric, Massachusetts Electric, Nantucket Electric, NSTAR, Western Massachusetts Electric, or a municipal utility) owns and operates these wires.
- Customer: At the customer site, electricity is stepped down again through a transformer. A meter measures how much electricity each customer is using.
With the advent of small generation technologies that can be installed by a utility customer, a reversal of sorts occurs. A generator installed on a customer site, or behind the meter , can be interconnected with the distribution system to ensure reliable power from the utility when the generator is not in service. Additionally, some developers connect generators directly to the distribution system rather than the transmission system. Both types of installation are known as distributed generation.
Some customers decide to install a generator that is not connected to the utility, serving a small or isolated electric load. This is called an off-grid installation because it is not connected to the electric grid. Off-grid generation is also a type of distributed generation, but differs in that it does not require interconnection approval from the utility.
Throughout these pages, we will sometimes refer to the distribution system generally as the electric grid or the utility. We also refer to utility-interconnected distributed generation simply as distributed generation, without reference to off-grid systems.
How Do I Know Whether My System is Considered Distributed Generation?
If you are a customer installing a generation system on your home, business, or other privately owned property, you are installing distributed generation. If you plan to connect this system to the utility, you will need to follow that utility’s interconnection process.
Larger systems installed by developers may also be considered distributed generation if they are connected to the distribution system rather than the transmission system. In these cases, the developer will need to engage in discussion with the utility to determine whether this type of interconnection is appropriate for the project.
Why Install a Grid-Connected System?
The main benefit of installing a grid-connected distributed generation system is the assurance of receiving power from the utility when your system is not running. This is essential for many renewable technologies like solar and wind, which produce intermittent power and for other technologies that may need to be shut down for periodic maintenance.
While some customers install distributed generation as a primary source of power, others may install it as backup generation for critical electric loads when the utility is not able to provide power due to storms, blackouts, or other unexpected events.
An additional benefit for small generators is the ability to sell power back to the utility. In Massachusetts, generators that produce less than 60 kW are eligible for net metering, where the customer receives payment for unused power that is fed back into the distribution system. In some cases, larger generators may also establish power purchase agreements with their utility.
What Are My Other Options?
The alternative to a grid-connected system is an off-grid system, where the generator serves all or an isolated part of the electric load on site. Off-grid systems can make economic sense for sites that are far from existing utility lines. An off-grid system connected to an isolated load may also be necessary if the site is located on a utility’s area network, where interconnection is not currently allowed.
A second option is to interconnect a system to the transmission level of the grid. However, this process typically is longer and requires more documentation than interconnection to the distribution system. It is typically only considered by large generators, who may also need to go through outside reviews.