Distributed generation is used to provide onsite electricity and heat generation for commercial and industrial purposes. Sometimes these power systems only operate as a back-up power source, while more advanced ones are designed to operate at all times. Because of the high efficiency of these advanced units, this strategy can provide lower cost energy to the customer, and be used as a component of a more expansive energy management strategy. The onsite generation of electricity avoids the loss of electricity from transmission and distribution losses, which can account for 9% of all power generated. Many industry observers liken the migration of energy production from centralized to distributed to the migration of computer technology from mainframe to desktop.


Micro-turbines are small gas turbines used to generate electricity on-site. Air is drawn in and compressed by spinning blades and mixed with a gaseous fuel, many times natural gas. This mixture is combusted in the middle combustion chamber, with the hot gases streaming out the back through another set of turbines. The rear turbine blades are connected to the front turbine blades, which draw in the air and enable the continuation of operation.

Roughly the size of a refrigerator, these units typically have power outputs in the range of 25-kW to 300-kW. In comparison, gas turbines in large power stations have much higher power outputs of around 100-MW to 300-MW. The small size of micro turbines is a major advantage that allows them to be situated right at the source of electricity demand.

Diesel Engines

The diesel engine is an internal combustion engine like a gasoline engine, but unlike a gasoline engine, the fuel is not ignited by a spark instead, it is compressed and heated until its auto-ignition temperature is reached. Both engines use fuels derived from oil, but with slightly different physical and chemical properties. Petroleum fractions used for diesel fuel are chosen for their good auto-ignition properties and they are very similar to fuel oil used for residential heating.

Diesel engines are used for low-maintenance stand-by power systems, and in the transportation market. Diesel engines power large trucks in theU.S.primarily, but Europeans have long used the engine to power automobiles as well. In 2004, diesel cars represented 44 percent of all cars sold inGermany, which is the biggest European market. Diesel cars commanded a similar market share in France,Spain and across the rest of Europe. If the current trend continues, in a year or two diesel-powered cars may exceed 50% of all new cars sold in some of the biggest European markets.

Fuel Cells

A fuel cell is a device that converts chemical energy directly into electricity via a modified oxidation process. The process also produces heat, water and possibly carbon dioxide depending on the fuel used. The different varieties of fuel cells are distinguished by the electrolyte used, though the construction of the electrodes is also different in each case. However, in all types, there are separate reactions at the anode and the cathode, and charged ions move through the electrolyte, while electrons move round an external circuit. There are five types of fuel cells. They differ by the chemistry temperature they operate on, catalysts used and raw fuel input.


Combined Heat and Power (CHP) is sometimes also referred to as cogeneration—the production of both power and steam for commercial or industrial uses. Any on-site power generation technology can be used for this strategy, although microturbines and fuel cells are generally chosen.

The production of onsite heat is a very energy intensive process, so coupling its production with electricity allows for greater efficiency—with some processes over 70% efficient, as compared to 35%-40% for many large-scale coal-fired central stations which are the mainstay of theU.S.power generation fleet.

Clean Coal Technologies

Coal is the remnants of organic material that has undergone tremendous pressures and temperatures as it was buried within the earth for millions of years due to its origin, there are many parts to coal that cause significant pollution as it is burned to generate electric power. Since the burning of coal produces over half of all electric power in theU.S., finding ways to minimize its impact is important. Clean coal technologies refer to any technology that allows coal to be burned cleaner—either with the release of far less pollutants, or in a more efficient manner that reduces the amount of pollution produced while the total energy produced increases. Technologies that control pollutants such as mercury, SOx, NOx, and particulates are being joined by some that can capture and store underground (sequestrate) CO2. Other technologies control these pollutants and increase the efficiency by turning the coal into a gas and burning it in a gas turbine (IGCC – Integrated Gasification Combined Cycle).