Call for Decentralized Renewable Generation

In response to the major power blackouts in North America on 14 August, the World Alliance for Decentralized Energy (WADE) has called on electricity market regulators throughout the world to remove the barriers to the wider use of decentralized energy (DE).

Edinburgh, Scotland – August 19, 2003 [] WADE maintains this is a more cost effective way to increase the resilience of electricity systems and to reduce the prospects for similar catastrophes in the future. DE systems produce electricity at or close to the point of consumption, with low or zero emissions. WADE says these systems consist of decentralized renewable generation (regardless of fuel, size or technology), high efficiency cogeneration, and on-site energy recycling. These systems include an extensive range of proven, reliable and cost-effective power generation solutions, according to WADE. “Users of DE were the fortunate few to have a power supply amid the darkness,” said WADE Research Executive Nicola Walker. “North America’s centralized electricity system has shown itself to be highly vulnerable to the expanding and changing demands of the 21st century.” WADE says that that too many power plants are sited too far away from consumers; and these plants depend critically on the effective operation of capacity constrained transmission and distribution (T&D) systems to ferry the electricity to distant and ever more demanding consumers. A centralized system under strain is acutely vulnerable to minor stress that can, in seconds, become disruption on a breathtaking scale, cautions WADE. WADE says that many now call for multi-billion dollar investment in central power and T&D upgrades. WADE believes that such a policy response that perpetuates the dominance of central power will result in substantial extra and unnecessary costs. To undertake a monumental investment in extensive new T&D systems would reinforce a centralized system of remote generation whose overall efficiency will probably never exceed 40 percent. According to research undertaken in 2002 by WADE Chairman Tom Casten, investing in DE instead of central power in the USA will save around $400 billion in capital costs over the next 20 years. WADE says that decentralized energy is the right solution not only for North America, because power failure can happen anywhere. A centralized system that is under stress, wherever it is, will from time to time fail without ongoing and costly addition to a generation and T&D portfolio that wastes more than half the energy supplied to it, according to WADE. Prolonging the dominant use of inefficient central power is the wrong economic choice for all countries, everywhere, says WADE. However in every country that WADE and its members have studied, the alliance found range of existing regulatory and institutional arrangements, which have been developed to accommodate central power generation and its accompanying network of extensive transmission and distribution systems. WADE says these systems act as major barriers to DE deployment and so incentivize the more costly, less efficient and more polluting central power model. The emergence of competitive DE generation and control technologies, according to WADE, means that this traditional configuration is no longer optimal. But WADE says that system inertia, vested interests and inappropriate regulatory structures represent major hurdles for the adoption of these DE options. In July, WADE published “Seven Guiding Principles For Effective Electricity Market Regulation” which they hope regulators worldwide will use to increase the resilience of their electricity systems and reduce overall costs. WADE says the traditional model of centralized power generation has several drawbacks compared to DE: -The world’s central fossil-fired plants cannot recycle by-product heat and thus waste about 70 percent of fuel energy. Total losses from the world’s central plants are equivalent to global energy consumption by the transportation sector. -State-of-the-art CCGT plants waste about 50 percent of energy input. -Transmission and distribution (T&D) system losses are around 10 percent of the global power supply. These losses are growing due to transmission congestion. Global T&D waste exceeds the combined annual electricity consumed by Germany, the UK, Spain and France. -Economies of scale increasingly favor smaller plants. Decentralized electricity generation at or near users requires only half the capital of new central power generation plus new transmission and distribution, and DE plants can be substantially more efficient. -Power failures due to T&D congestion are inevitable. Existing transmission and distribution wires in many countries are already loaded, but new networks are costly and unpopular. -The central power model is vulnerable to system disruption or destruction, including terrorist attack. WADE is a non-profit association working to accelerate the deployment of decentralized energy systems worldwide. WADE members include national cogeneration and DE organizations in Europe (including COGEN Europe), the USA, China, India and Brazil. Company supporters include Solar Turbines, Wartsila, Private Power, Caterpillar, MTU CFC Solutions, Capstone Turbine Corporation and FuelCell Energy. In total, WADE’s direct and indirect membership support includes over 200 corporations around the world. The governments of Norway, the USA and Canada, and the United Nations Industrial Development Organization (UNIDO) have provided WADE with additional financial support.