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The markets for distributed energy systems are not developing as quickly as was predicted at the turn of the millennium. Sales got off to a good start in 2000 and 2001. Then, after shrinking dramatically in 2002, the market for distributed generators such as microturbines, engine generators, and fuel cells began to rebound in 2003, according to Primen, an energy market intelligence company.
As of January 2004, Resource Dynamics Corporation (RDC) estimates (using EIA data) that there are 12.3 million distributed generators in place in the United States, a figure that includes both stand-alone and grid-connected units. The generators have an aggregate capacity of 234 GW, annually generating 188 TWh of electricity. Emergency and standby power applications still dominate the market, followed by cooling, heating, and power applications. The full report, The Installed Base of U.S. Distributed Generation: 2004 Edition (PDF 104 KB), is available for a fee from RDC.
In The Potential U.S. Market for Distributed Generation: 2004 Edition (PDF 49 KB), RDC estimates that there is the market potential for at least 28 GW of new distributed generation, almost three-quarters of it in CHP applications, which could produce 600 trillion Btus of thermal energy annually. The potential for new net gas consumption from these applications is 1.4 quads, according to RDC. If the entire distributed generation market potential were realized, total U.S. natural gas consumption would rise by 6%.
Some of the generation technologies that have been thought of as distributed are being aggregated into utility-scale power projects. According to Clean-Energy Trends 2003, a report by Clean Edge Inc., "Clean energy is not just going distributed and small, it's increasingly becoming centralized and big." Much of the new wind capacity being added around the globe, for example, is being installed on large wind farms such as the King Mountain Wind Ranch in Texas (278 MW). The report notes that such concentrated renewable energy installations are, in some cases, facing the same NIMBY ("not in my backyard") opposition encountered by other centralized generation technologies, and pose similar challenges to an electricity grid that is already highly stressed and vulnerable to power outages.
According to the follow-up report, Clean-Energy Trends 2004, global solar and wind power generating capacity have each grown by an average of more than 30% annually over the past five years. But the installed base of both technologies remains relatively small, tempering the impressive growth data.
For More Information
To learn more about domestic and foreign markets for distributed energy technologies, please follow the links in the left-hand navigation bar, see the distributed energy market studies on our Publications page, or read one of the following documents.
- The Installed Base of U.S. Distributed Generation: 2004 Edition (PDF 104 KB) — Resource Dynamics Corporation, 2004.
- The Potential U.S. Market for Distributed Generation: 2004 Edition (PDF 49 KB) — Resource Dynamics Corporation, 2004.
- Clean-Energy Trends 2004 — Clean Edge Inc., March 2004.
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