Distributed Energy Generation

Sources of clean energy may be offshore or onshore, each with advantages and disadvantages.  Offshore development has technical and bureaucratic hurdles that will keep it from being an important source of US power for many years.

Onshore wind generation installations have fewer hurdles and lower cost.  However, large installations in areas of abundant wind resources often require more grid capacity than is available at those locations.   Utilities do not want to pay for transmission lines without a source.  Conversely generating companies do not want to build plants without transmission capacity.

Distributed generation, using low-cost wind turbines may be a way to increase energy production without waiting for development and construction of new transmission capacity.  It can be connected to the existing distribution network to bridge the gap and increase the incentive for eventual private investment in high-power transmission systems.

Distributed wind generation has several other advantages: 

  • It is more constant – Wind may not be blowing at a centralized wind-farm, but it will be blowing over a substantial portion of a distributed network.
  • It is less prone to sabotage, or local environmental phenomenon.
  • Landowners can partner in the power business.

There are several hurdles that must be overcome to make this a reality:

  • May need to modify electrical distribution substations.
  • Need to modify local utility regulations to allow running the meter backwards and provide financial incentives to utilities.
  • Need financial incentives to landowners.  Electrical cooperatives may allow sharing of costs and risk.

Goal – Energy security through reliable, clean, affordable energy

Viable sources of clean energy include wind, tidal, current (water), solar, wave, and geothermal energy.  These may be offshore or onshore, and each has advantages and disadvantages.

Offshore/coastal installations

  • They can be nearer to population centers.
  • They can be far enough offshore to avoid many location conflicts.
  • TWind and wave resources are abundant and continuous.
  • There is the potential to link multiple projects along the coast to moderate surges and lapses of power that may occur locally.


  • Offshore wind installations exist in other parts of the world, but have yet to be built in the US.  No commercial installations have been built in deep water.
  • Wave energy development is in its infancy – there are no successful commercial wave installations today.
  • Costs are high, especially for deep water.
  • Bureaucratic hurdles are formidable – no fewer than eight federal agencies and numerous state and local agencies and nongovernmental organizations are involved in the permitting and approval process.
  • Outlook – significant commercial development is far off (10+ years).  This technology is likely to be an important source of US electrical power in the future, but not for 20 or more years.

Onshore installations


  • Technology is proven – large and small onshore commercial installations of solar, wind, current, and geothermal electrical generation exist.  Small solar and wind installations have been around for more than 40 years.  Water current electrical generation has been around for twice that long.
  • Cost of installation (excluding any land purchase) is much lower than for offshore.
  • They have fewer bureaucratic hurdles, especially if on private land.


  • Large installations in areas of abundant solar or wind resources often require more grid capacity than is available at those locations.  Electrical transmission utilities do not want to spend the capital on construction of transmission lines without a source in place.  Conversely, prospective electrical generating companies do not want to develop generating capacity without transmission capacity.
  • Large installations of both solar and wind generators are a visual blight, and may be a major environmental problem.
  • Even in farming areas, large installations may not be the best use of the land.

Possible solution – Distributed generation of electricity, primarily wind and solar.

Distributed generation

What does it look like?

In rural America – It can look like farms do now.  An occasional “windmill” that is unobtrusive, and part of the rural landscape, solar collectors on rooftops of farm buildings.  In urban areas – It can take the form of solar rooftops on houses, commercial buildings, and parking lots.

How is it connected?

It can be connected to the existing distribution network.  Many electrical utility customers have connections that can “run the meter backwards.”

What else is required?

There may be a need to modify electrical distribution substations to allow excess electrical power to flow backward from the distribution networks into the transmission network (high-power lines).  There may be a need to modify local utility regulations to allow running the meter backwards and provide financial incentives to power generators.  There may be a need for financial incentives to individual landowners for construction capital.

Advantages of distributed generation

Distributed power generation is more constant – Wind may not be blowing at a given time in an area occupied by a large wind farm, but it will be blowing over a substantial portion of a distributed wind network.  Solar power is, of course, limited to daytime hours, but cloud cover will be less of a problem if it is distributed over a large area.  Daytime hours of operation are extended somewhat because of the greater total uptime of an extensive east-west network.

Distributed power generation is less prone to sabotage, or local environmental phenomenon that might jeopardize a centralized power generation facility – A large centralized wind or solar farm or its connection to the electrical grid may be an attractive target for sabotage by terrorists or others.  A centralized wind farm may be severely damaged by tornadoes or an ice storm.  A centralized solar farm may be damaged by hailstorms or wind-blown sand.

Distributed power generation can be begun without an initial investment in high-power transmission lines – a consistent hindrance to investment for building large wind farms in the northern plains States has been that there is a lack of high-voltage transmission capacity in that part of the country.  Building such capacity is expensive, and investors are reluctant to pay for transmission lines that will be underused for many years until the power generation facilities can be built.

Distributed generators can feed the existing distribution network by running the power in reverse toward the traditional generating points.  Excess capacity at that point can be used to route to other high-demand areas within the transmission network.

Power generating capacity in place will provide incentive for private investment in transmission lines.

Transmission capacity can be increased gradually as power generating capacity increases.  When local generating capacity increases beyond the local demand, transmission lines can be built to remote demand locations.  Eventually, sufficient capacity will allow the development of larger wind farms to supplement the distributed network.

Individual landowners can be partners in the power utility business.  Several business arrangements are possible, with different financial obligations and benefits, for example:

  • Landowners can provide the capital for wind or solar arrays.  In this way they can reap maximum financial benefits from electrical generation from their property.
  • Landowners can partner with utilities or other ventures that have the capital.  Landowners could get free electricity for their own use, but would get a smaller share of the revenue for excess generation.
  • Landowners can lease the equipment.  This arrangement is already being used by some private ventures for solar rooftop installations.  Landowners pay a monthly fee, which is recouped by lower cost of electricity from the local utility or by income from generated electricity.
  • Landowners can lease out the “footprint” needed for the particular installation to a “green” power company that would supply the equipment.  Landowners would get a fixed monthly income, but would have to pay for electricity that they use.
  • Landowners can form a cooperative for sharing risks and negotiating with utilities.  In rural areas, landowners are probably already members of an electrical distribution cooperative.  Some of these cooperatives also generate electrical power for some of their needs. 

Installations can be relatively low-cost on a per-installation basis.  For example, small wind turbines (designed for rural sites) are available now.  Small solar installations are now common.  Some parking lot installations also exist.


There is the need to work with states on their regulatory structure and process and on laws regarding individual rights to generate power and/or “run the meter backwards.”  Traditional power-generating utilities will not support distributed generation, as it is not a moneymaker for them and would be seen as competition.  In states where regulations have separated utilities that generate from those that distribute electricity, it may be possible to get some support from the distribution utilities.

There is also the need to figure out and solve any technical or regulatory difficulties in sending power back “upstream” to the transmission network.  Conceptually, this is straightforward, but there may be circuitry that prevents power from flowing backwards through electrical substations.

There is the need to get sufficient interest among landowners to become generators.  Small solar installations are sufficiently low-cost that they are becoming increasingly popular in sunny climates, particularly where there have been governmentally instituted financial incentives.  Small wind generators may be too expensive for most landowners, particularly if there is concern about their reliability and the need to repair or replace them if damaged.  Electrical generation cooperatives may allow for sharing of risk among a large pool of owners.  Those who are members of existing cooperatives may be comfortable with such an arrangement.

Additional hurdles include the need to cross many jurisdictions with conflicting needs and regulatory requirements.  States may see it to their advantage to work together; federal involvement may be beneficial as well.

To get copies of recent presentations on Pacific Offshore Oil & Gas Outlook and Renewable Energy, Contact Ken at: kp AT kineticpotentialenergy.com