ALL ABOUT DISTRIBUTED NEW ENERGY

Renewable Distributed Energy Generation; Distributed Solar Photovoltaics and Small Wind Power: Demand Drivers and Barriers, Technology Issues, Competitive Landscape, and Global Market Forecasts
Sonja Berdahl and Clint Wheelock, 4Q 2010 (Pike Research)

"…Renewable distributed energy generation (RDEG) is actually a subset of the larger market for renewable energy generation and another market for distributed – or onsite –generation, which includes both conventional and renewable fuel sources. Since the first centralized power station came online in 1882 (Thomas Edison’s Pearl Street Station), centralized power plants have attracted capital and achieved efficiencies far greater than possible with small systems. Access to affordable electricity drove the economic engine of the industrial revolution. Distributed generation was reserved for regions that did not have a developed energy infrastructure…

"Fast forward about 100 years…concerns are very different. A seemingly insatiable demand for electricity and a growing concern for the environment…[have created] a “new” market for cleaner, more secure energy…[T]he emergence of the renewable energy market – especially the RDEG market – [is] an energy evolution…but penetration levels for all renewable—especially distributed—are very low…[T]he RDEG market is dominated by residential and commercial grid-connected photovoltaics (PV) systems…[It] is concentrated in regions with favorable financial incentives, such as premium feed-in tariffs (FIT), for PV…FITs [may] include small wind systems…[but many] do not…"

click to enlarge

"In 2010 and through the forecast period of this report (2010-2015), financial incentives are the key drivers for the RDEG market…The global electric power industry is evolving from a financial and engineering model that relies on large centralized power plants owned by the utilities to one that is more diverse – both in sources of generation and ownership of the generation assets…Overall, RDEG comprises a very small part of the current global electric power generation capacity – just 0.2% – but it has the potential to play a much larger role…Europe and the United States are the largest markets…China and India are huge potential markets…

"The Three Primary Growth Drivers for RDEG…[are] Adequate sun and/or wind resources…Financial incentives – preferably a premium feed-in tariff…High electricity prices…Renewable portfolio standards and the accompanying financial incentives are the most import drivers in the development of the RDEG market…The locations of the most robust markets for RDEG are very similar to the locations of the global PV markets because PV is the dominant RDEG technology…Utilities and independent power producers (IPPs) are leasing commercial and industrial rooftops across urban areas to create “virtual” power plants…Renewable energy policies and the global economy will determine how fast the RDEG market will grow…"

click to enlarge

"…In the U.S., California currently commands 60-70% of the market for PV…Some key markets in Europe – notably Greece, Spain, the Czech Republic and Italy…[are] struggling economies [and] present large uncertainty…The United States and the United Kingdom are the largest markets for distributed wind systems. Hybrid PV/wind systems are common in these markets for both grid-connected and off-grid applications. One off-grid application that has the potential to be a substantial market for RDEG is providing power to remote telecommunications base stations in developing regions of Africa, China, India and the Middle East. The majority of the telecommunications systems use some type of wind/PV/battery hybrid generation system…

"…Emerging Trends in RDEG [are]…Growing awareness…Leasing programs…Utility ownership…Third-party ownership…Community ownership…[V]iewed as a vehicle for economic development…Solar PV module prices dropped by more than 50% in 2008/2009…[and] are expected to fall again…"