Distributed Energy
[From Wells Fargo Bank, Special Report on Identifying the Opportunities in Alternative Energy]
In the developed world, energy distribution is trending toward smaller, more locally based electricity generation for the first time since the 1970s. This trend is driven by the need for super-reliable, highquality power, especially for sites such as data centers and high-technology parks, as well as hospitals and police stations. As technology has become the norm in the work place, the need for extra reliability in power provision has risen. When the power goes out, even for a short period, losses can mount up through the hundreds of thousands of dollars. Reflecting this trend, the U.S. Department of Energy estimates that about 20 percent of new electricity generation capacity will be distributed by the end of this decade. Developing countries, needs are slightly different. The tendency toward distributed power is driven by the necessity to provide relatively cheap and reliable power in the absence of a developed electricity grid. Such grids are expensive to build and maintain, combined with their other downside, the loss of electricity during transmission. On a localized basis, on-site electricity generation could lead to significantly higher energy efficiency, which translates to cost savings for the residential consumer. This is because a significant amount of electricity is wasted when it is distributed through power lines from a central power plant to the home. We believe that the full potential of distributed energy is likely to be achieved through integration with the overall power network. Such smart networks that also include storage potential are likely to help open up niches where distributed energy is more competitive, helping to reduce costs and break down
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