and Path Dependency"
Distributed generation (DG) provides energy and emissions savings for a single
installation, provided consistent electricity and heat loads are available.
But unless DG has a significant market penetration, it cannot be an important
tool in meeting energy policy goals. Widespread use of DG represents an
alternative system architecture for the generation and delivery of electricity
and heat. A green-field cost optimization of seasonally varying energy system
demands, showed utilization of DG provided overall cost savings of around 25%.
This model was used to investigate the implications of introducing DG into an
energy system with existing generation plant. Sizeable penetration of DG for
base-load application results in system cost and emissions savings. However, a
reduced utilization of 46% for existing capacity suggests potentially stranded
assets. Ongoing modeling investigates endogenous implications of DG
penetration including mechanisms for compensating stranded assets, natural gas
costs, evolving demand and DG economies of scale.
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