Distributed Energy is an approach to electricity generation that offers environmental benefits by siting generators closer to where the energy is used.
The UK generates most of its electricity in large coal, gas or nuclear power stations which are connected to the national grid. Distributed Energy (DE), also referred to as distributed generation or decentrelised energy, is another approach which brings generation closer to where it is used.
It covers many technologies which may be installed by individuals, businesses, communities, schools, commerce or industry.
DE could be anything from wind power, solar panels, combined heat and power (CHP) schemes and other renewable electricity generation connected directly into the local distribution network. CHP uses largely conventional generation technology but captures the heat usually lost through generation to use in industrial processes or heating/cooling.
Current Issues
The Energy White Paper (EWP), published in May 2007, sets out the potential for DE to help meet the Government's carbon emission targets and to improve security of supply. The EWP states that DE should develop "within the licensed framework" and makes a particular point of the need to ensure that customers remain protected by the competitive market.
A joint DTI/Ofgem Review of Distributed Generation was published alongside the EWP. The Review identified a number of barriers to DG - including cost, a lack of reliable information, electricity industry issues, and regulatory barriers. One of the main conclusions of the Review was that the UK energy regulatory regime "was established to meet the needs of large centralised generation and aspects of the system disadvantage smaller distributed generators."
The EWP set an action for Ofgem and BERR to consult by the end of 2007 on "more flexible" market and licensing arrangements suitable for DE, with implementation by the end of 2008. Ofgem and BERR established a Distributed Energy Working Group (DEWG) to help formulate measures to address barriers within the market or licensing arrangements that inhibit the further take up of DE projects.
In December 2007, a joint Ofgem/BERR Distributed Energy (DE) Consultation document was published. The deadline for submission has now passed. The consultation and responses can be accessed through the Further Resources section on the right hand side of this webpage.
