What Is Distributed Generation?

Distributed generation is the production of electricity at or near the point of consumption using small-scale generating units connected to the distribution network rather than to the bulk transmission system. IEEE defines distributed generation as a source of electric power "sufficiently smaller than central generating plants so as to allow interconnection at nearly any point in a power system." Technologies in this category include solar photovoltaic arrays, micro-wind turbines, microturbines, reciprocating engines, fuel cells, and small combined heat-and-power units. Units are typically rated below 10 megawatts, and many residential and commercial installations are below 100 kilowatts.

Distributed generation differs from traditional central-station generation in scale, ownership, and siting logic. A coal or nuclear plant is built at a location chosen for fuel access, cooling water, and transmission corridors; a distributed generator is sited where the load is, reducing the energy lost to transmission and distribution resistance. This load-proximity advantage has driven adoption across residential, commercial, and industrial segments, and the aggregate capacity of distributed generators has grown large enough to affect the planning and operation of distribution circuits in many utilities.

Technology Types and Characteristics

Solar photovoltaics, the most widely deployed distributed generation technology, convert sunlight to direct current through semiconductor junctions; power electronics invert and condition the output for grid injection. The variable output of PV and small wind requires either storage or grid backup to guarantee continuous supply. Fuel cells produce electricity electrochemically from hydrogen or natural gas, with efficiencies reaching 60 percent in phosphoric acid and solid oxide configurations, and the thermal byproduct can be recovered for space heating or industrial processes. Microturbines burning natural gas or biogas offer fast startup times and low emissions, making them suitable for combined heat-and-power installations where both electrical output and waste heat serve facility loads. Power-electronic integration techniques for connecting these diverse sources to the grid have been a major area of IEEE research, covering inverter control, harmonic injection, and power quality management.

Grid Interconnection and Standards

Connecting a distributed generator to the utility grid requires compliance with interconnection standards that protect lineworkers and maintain power quality. IEEE Standard 1547 defines the technical requirements for voltage and frequency ride-through, anti-islanding protection, and reactive power capability. Anti-islanding detection prevents a distributed generator from continuing to energize a section of the distribution circuit after utility power has been deliberately disconnected for maintenance or fault clearing, a condition that endangers workers who assume the circuit is de-energized. The 2018 revision of IEEE 1547 added requirements for voltage support participation, allowing distributed generators to inject or absorb reactive power on utility request, expanding their role from passive suppliers to active grid participants.

Impacts on Distribution System Operation

High penetration of distributed generation on a feeder designed for one-directional power flow introduces reverse power flow, voltage rise at the point of injection, and protection coordination challenges. Traditional distribution protection uses overcurrent relays calibrated on the assumption that fault current flows from the substation toward the load; distributed generators contribute fault current from the opposite direction and can cause protection devices to misoperate. Voltage regulation equipment, including tap-changing transformers and capacitor banks, was designed to compensate for voltage drop along the feeder and may overcorrect when generation reverses the flow. Distribution utilities have addressed these issues through revised protection settings, smart inverter functions, and active network management systems that dispatch distributed energy resources studied by Sandia National Laboratories to regulate voltage and frequency dynamically.

Applications

Distributed generation has applications in a wide range of fields, including:

• Residential rooftop solar installations offsetting household electricity consumption
• Commercial and industrial facilities using combined heat-and-power systems for energy cost reduction
• Remote and island communities where long transmission lines make central-station supply uneconomical
• Microgrids on military bases, campuses, and critical facilities designed to operate independently during outages
• Agricultural and rural electrification programs in regions without access to the central grid