Decription:

Distributed Generation (DG) has emerged as both a potentially attractive means of providing new electricity generatin capacity and an alternative to expanding the capacity of established electricity transmission and distribution networks. This situation has arisen because of the ongoing improvement in the technologies used in DG and also because of the changing structure of the electricity industry, which now encourages more innovative solutions to meet energy requirements involving a number of industry stakeholders.

This commentary is the summary of an extensive technical evaluation undertaken by CAE of DG opportunities in New Zealand. The study was commissioned by industry partners and is intended to chart the likely development of DG within the context of the New Zealand electricity industry. The analysis framework uses data from actual case studies of DG projects, some of which have been successfully implemented, others not, to demonstrate the viability of DG under different circumstances. The analysis timeframe is out to the year 2015.

Much of the technology that falls under the rubric of DG is not new and has to some extent already been adopted in New Zealand. In fact, as the CAE studies have shown, DG is more widespread and entrenched that generally recognized, yet despite obvious financial and risk management drivers for DG, investment in DG to date has been essentially opportunistic, and the benefits of DG have been difficult to realize.

This commentary tests the hypothesis ‘that distributed generation now permits a paradigm shift in thinking about solutions for meeting consumer energy capacity and reliability requirements’. The key to DG’s future will be migrating from current strategies into a new energy market focused on customer solutions rather than utility responses. This commentary defines how DG might emerge in the future and identifies the strategies required to make this happen. The task now is to reveal DG opportunities and encourage projects offering mutual benefit and opportunity to be developed jointly by suppliers and consumers.

This will set the scene post-2015 for emerging energy technologies to build on the strength of the proven technologies. These challenges will form the basis for future CAE programmes.