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Distributed Generation


Distributed power generation, also known as on-site generation and distributed energy resources is the production of electricity utilizing smaller power generation technologies located at, or close to the point where the power will be used.

These power generation technologies operate on a multitude of energy sources such as natural gas, methane gas, wellhead gas, wind and solar. They are designed to provide electricity, and in some cases, thermal energy which can then be utilized for heating and air conditioning requirements using combined heat and power (CHP) technology.

This “point-of-use” power distribution model significantly reduces many of the problems with traditional power generation and transmission from blackouts due to downed transmission lines, line overload during peak power times, blown transformers and aging transmission line infrastructure.


Distributed power generation is an exciting development that has the potential to completely revolutionize the power landscape. There are a host of benefits which range from economic to environmental. Some of the key benefits of distributed power generation include the following:

Remote Locations are No Longer a Problem

In the conventional power model remote locations that were off the power grid were unable to receive energy, severely limiting where plants and facilities could be built. Likewise remote islands and small nations such as those in the Caribbean or Latin America were dependent almost exclusively on power imports, making them particularly vulnerable to market volatility and thus stifling their economic growth. Distributed power generation eliminates that problem.

Lower Greenhouse Gas Emissions

Many distributed power generators use much cleaner fuel sources than the traditional model. This in turn helps reduce greenhouse gas emissions, thereby benefiting the environment and helping to generate good will for the company. In this age of increasing emissions regulations distributed power may also help companies stay in the good graces of regulators.

Enhanced Security and Reduced Vulerability

As discussed above market volatility, weather disasters, and other disruptions had the potential to shutdown a company reliant on the traditional energy model. By contrast with distributed power generation there is much greater power security since the power is generated on-site and will continue to be available regardless of world affairs or weather occurrences.

Rapid Implementation

Distributed power generation is relatively fast to implement and can often be completely set up on a large scale within 3 months or less. Additionally, as demand increases at the site, more capacity can quickly and easily be added.

Significant Improvment In Overall Power Effeciency

One of the most important benefits of distributed power generation is its remarkably better power efficiency. In the traditional energy model only about 28-35% of fuel consumed is actually used for power. This is due in large part to power loss related to transmission and distribution. By contrast because distributed power is generated on-site, distribution is a moot point. By utilizing combined heat and power applications, this allows distributed power generation to attain efficiency of 85% or greater.

Wider Industry Acceptance

In years past the spread and implementation of distributed power was largely blocked by skepticism, inertia, and stringent regulations. However, in recent years alternative fuel sources have sparked a great deal of interest and inspired regulatory agencies to take a look at distributed power generation and to recognize its benefits. The modern era is ripe for the spread of distributed power generation.


In the traditional power generation and distribution model, electricity is generated in large quantities at centralized power plants and transmitted to a large number of residential, commercial, and industrial customers. In many cases, these power plants may be hundreds of miles away from the end users and rely on very old power transmission line infrastructure.  When electricity is transmitted over long distances, as much as 20% can be lost in transmission.

Over the past five years, the number of power outages in the U.S. has more than doubled every year due to aging infrastructure, a growing population, and more frequent extreme weather conditions that are straining the U.S. electric transmission grid. This has resulted in losses of more than $150 billion annually for U.S businesses.

Utility companies nationwide have reached the conclusion that the only option is a long-term substantial upgrade to the U.S. power grid. This will be an extensive process with significant costs to the consumer reflected in increased rates.

By implementing the XLS Energy Distributed Power Generation solution, our customers are no longer subject to utility company rate increases due to infrastructure upgrade costs.

A Planned Modernization Of The U.S. Power Grid Will Cost Up To $476 Billion Over The Next 20 Years.

To address the aging infrastructure of the U.S. power grid nationwide, utilities companies are planning to implement smart grid technology.  To make the power system of the future a reality, EPRI, a non-profit electric research company said power companies need to invest between $17 and $24 billion a year over the next two decades. These costs will be passed on to the consumers.