Or can utilities use them offensively?The electric power industry stands poised to move to a fully competitive market. Business realities already imply a broadening of customer choice. At the retail level, direct transactions loom as a near-term prospect for electric utilities.
Coupled with this rising competition comes a growing variety of new, small modular power generating technologies. These new technologies have rewritten the competitive equation, changing the very nature of the utility infrastructure and providing strategic opportunities in the emerging field of distributed generation.
Nevertheless, should utilities consider distributed generation a competitive threat? Could distributed generation erode the utility's customer base? Or will distributed generation allow utilities to exploit the changing infrastructure for competitive advantage?
From Definition to Strategy
Distributed generation denotes the stand-alone or system-integrated generation of electricity in small modular plants (em ranging in capacity from a few kilowatts
to over 100 megawatts (Mw) (em whether by utilities, utility
customers, or third parties. Strictly speaking, the term "distributed generation" embraces, but is broader than, the concepts of on-site generation, self-generation, or cogeneration. (The term "distributed resources" includes both distributed generation and nongeneration alternatives for electric supply.)