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What's in the Cards for Distributed Resources?

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  • Johannes P. Pfeifenberger, Philip Q Hanser and Paul R. Ammann

Abstract

The electric utility industry is in the midst of enormous changes in its market structure. Mile the generation sector moves towards a truly competitive market, the utilities' transmission and distribution functions are undergoing a transition to unbundled services and prices. These changes will affect the competition between distributed and central-station generation technology. Although the ultimate market potential for distributed generation may be significant, the market will be fragmented and heterogeneous. Distributed generation will likely succeed in some small and only a few medium-sized market segments, each narrowly defined by the segment's unique operating requirements. The largest potential market segment is for distributed generation technology with operational and economical characteristics suitable for peak shaving. Unbundling of utility costs and prices will make base-load and intermediate load equipment, such as fuel cells, significantly less attractive in the largest market segments unless capital costs fall substantially below $1,000 per kilowatt.

Suggested Citation

  • Johannes P. Pfeifenberger, Philip Q Hanser and Paul R. Ammann, 1997. "What's in the Cards for Distributed Resources?," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-16.
    • Handle: RePEc:aen:journl:1997si-a01
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    Cited by:

    1. Kunneke, Rolf W., 1999. "Electricity networks: how 'natural' is the monopoly?," Utilities Policy, Elsevier, vol. 8(2), pages 99-108, June.
    2. Gulli, Francesco, 2006. "Small distributed generation versus centralised supply: a social cost-benefit analysis in the residential and service sectors," Energy Policy, Elsevier, vol. 34(7), pages 804-832, May.
    3. Gullì, F., 2003. "Distributed Generation versus Centralised Supply: a Social Cost-Benefit Analysis," Cambridge Working Papers in Economics 0336, Faculty of Economics, University of Cambridge.
    4. Gulli, Francesco, 2006. "Social choice, uncertainty about external costs and trade-off between intergenerational environmental impacts: The emblematic case of gas-based energy supply decentralization," Ecological Economics, Elsevier, vol. 57(2), pages 282-305, May.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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