Albany, NY -- (SBWIRE) -- 07/08/2015 -- Electricity is capable of being generated either centrally, or at different locations based on the requirement of the geographical location, demand or type of use. Most countries generate electricity in large centralized facilities, using fossil fuels, such as coal, gas, nuclear, large solar power plants or hydropower plants. These plants have excellent economies of scale, but usually transmit electricity over long distances and can negatively affect the environment. Distributed generation allows collection of energy from many sources and may give lower environmental impacts and improved security of supply. Historically, central plants have been an integral part of the electric grid, in which large generating facilities are specifically located either close to resources or otherwise located far from populated load centers. These, in turn, supply the traditional transmission and distribution (T&D) grid that distributes bulk power to load centers and from there to consumers. These were developed when the costs of transporting fuel and integrating generating technologies into populated areas far exceeded the cost of developing T&D facilities and tariffs. Central plants are usually designed to take advantage of available economies of scale in a site-specific manner, and are built as "one-off," custom projects.

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One of the factors that guides the market further is the ever-increasing demand of electricity that prompts generation companies to increase their output to cope with the demand. Additionally, distributed electricity generation gives the advantage of not being dependent on a single power station for the needs of the whole region. Also, certain industries that are power intensive can establish their generation plants to avoid being a load on the central grid and having to pay retail prices. Conversely, establishing separate power stations may give rise to losses for the generators that are already operational due to reduction in demand. Moreover, per unit cost of production is increased as the economy of scale cannot materialize when the number of end users reduce. But, due to the abundant availability of renewable resources, such decentralized generation facilities can be established in most places which creates tremendous opportunities for the market.

Segmentation of the market can be done on the basis of the source of generation of electricity. Common sources of power generation are cogeneration (using steam turbines, natural gas-fired fuel cells, microturbines or reciprocating engines to turn generators), solar panels, wind turbines and waste-to-energy sources. On the basis of modes of power generation, decentralized generation market is sub-divided into: Combined Heat and Power (CHP), fuel cells, microturbines, photovoltaic systems, reciprocating engines and trigeneration.

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Geographically, the European region is the most active in terms of decentralized electricity generation, led by Germany, Austria, France and Switzerland. The United States is the leader in the North American region with the most number of power generation facilities. The Asia-Pacific expanse has widespread decentralized generation with major facilities established in China, India, Australia, Malaysia and Singapore. Rest of the World countries that have major power generation facilities are the Middle Eastern nations and Brazil, Argentina and Paraguay in Latin America.

Some of the key players in the decentralized electricity generation market are: Constellation Energy Resources, LLC, Hydro One, Inc., Enersource Corporation, R&M Electrical Group Ltd. and E.ON UK plc.

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