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Distributed Energy:

bridge technology to gas-fired (or oil-fired)

How Big a Market Niche?

microturbines or much larger combined-

In dispersed developing markets where

cycle or cogeneration plants. Thus some

electricity is being introduced, distributed

renewable technologies could be bridge

generation (power that is distributed locally

sources to conventional energies rather than

and does not come through a regional grid) is

the other way around.

typically more economical and practical than

central-station, long-distance transmission

Will Subsidies Rescue

of electricity. Since some renewable energy

Nonhydro Renewables?

technologies have proven adaptable to mar-

The competitive predicament of renew-

kets where transmission and distribution of

able energy--reflecting both the economic, if

electricity are relatively nonexistent, environ-

not the environmental, problems of wind

mentalists hold out the hope that distributed

power, solar power, and biopower and envi-

energy (which is becoming more economical

ronmentalist opposition to hydropower--

relative to centrally dispatched power) will

could lead to a decline in renewable capacity

revolutionize electricity markets and usher in

in the United States. While "green pricing"

a new era of decentralized industrialized

and a new round of government subsidies are

The Department

renewable energy.

providing some support, older projects are

of Energy pre-

Renewable energy is not dominant in

coming off-line because subsidies are expir-

off-grid areas and may not be in the future.

ing, and new projects are encountering

dicts a decline of

Traditionally, propane- and diesel-fired

financing difficulties in an increasingly com

-

renewables from

generators have been the most economic

petitive electricity market. Only a national

12.5 percent to

power option. Improvements in solar tech-

quota for qualifying renewables, a federal

nology have made this technology increas-

"Renewables Portfolio Standard," can save

9.2 percent of

ingly viable in remote markets, but the

unconventional energies from the "harsh

domestic con-

intermittency problem requires very expen-

realities" of competition, concluded a study

sive battery technologies to ensure reliable

by two advocates of renewable energy.1 2 0 The

sumption by

electricity service.1 1 8

Department of Energy in a business-as-usual

2020.

scenario predicts an overall decline of renew-

Niche markets for solar power have grown

ables from 12.5 percent to 9.2 percent of

over time and today range from the hand-

domestic consumption by 2020 due to flat

held calculator to data-gathering ocean

hydropower and geothermal power and

buoys to space satellites. Wind power is often

aggressive entry by fossil fuels, natural gas in

thought of as distributed generation, but a

particular.1 2 1 On the other hand, quota

limited number of homes or businesses are

located in perpetually windy areas necessary

requirements and cash subsidies for qualify-

to give the turbines a capacity factor high

ing renewables as part of state-level restruc-

enough to make them viable and competitive

turing proposals are coming to the rescue.1 2 2

with other distributed options.

Distributed generation is more expensive

The Uncompetitiveness of

and problematic than central-station genera-

Alternative-Fueled Vehicles

tion where demand conditions can support

both.1 1 9 Thus, as a developing region matures

and gains greater economic infrastructure,

Although conventional fuels have a sig-

first-generation electricity sources may give

nificant advantage over unconventional

way either to a distributed generation

fuels in the electricity market, their advan-

upgrade or to central generation. Just as bicy-

tage is even more pronounced in the trans-

cles and motorbikes are a bridge to automo-

portation market. Of the world's approxi-

biles and trucks in many developing regions,

mately 650 million motor vehicles, fewer

solar panels or a wind turbine may become a

than 1.5 million (0.2 percent) are not gaso-

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