Distributed Generation

Deck: 

Disruptive Technology or Regulatory Challenge?

Fortnightly Magazine - August 2015
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The U.S. and other developed nations are undergoing unprecedented change in their electric and natural gas systems. One such change - the growth of of distributed generation, including solar, wind, localized turbines, and micro networks (defined collectively here as DG) - is disrupting established market structures within the utility industry. Regulatory incentives have become misaligned. Pricing no longer allows utilities to recover the costs of existing infrastructure. That portends of stranded investment within transmission, distribution, and generation systems.

Proponents of change may see this threat as a normal outcome from the inevitable introduction of disruptive technologies. Yet detractors claim that unwisely implemented DG poses an uneconomic threat to the traditional idea of a healthy public utility landscape. Either way, however, this one key fact remains: distributed generation will certainly prove disruptive if subsidies are provided to support these new technologies.

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