“Distributed generation” describes an energy production system that includes a mix of larger and small generation facilities, including many on-site or small-scale solar, geothermal, biomass or other renewable facilities.  Combined heat and power units use waste heat from electricity generation to produce heating or cooling.  District energy systems can provide local sources of electricity, heating, and/or cooling to clustered residential, mixed use developments and industrial parks.  

Distributed energy and combined heat and power units make better use of the existing grid system and can offset investments in the grid by reducing the need to build new transmission lines. For consumers, this translates into lower energy costs, greater choice, and quicker response to increased demand due to an enhanced ability to make incremental capacity additions.  

A new generation of smaller energy districts organized around distributed generation facilities could draw from both local and grid supplies, and would have strong incentives for conservation and opportunities for savings.  Municipalities might use District Improvement Financing (described in Strategy 12) to generate short-term financing for the construction of distributed energy facilities and associated districts; and might operate such facilities or districts through contracting or partnerships with the private sector. 

5.a    The Department of Energy Resources should recommend regulatory and legislative revisions to facilitate distributed generation

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