Renewable distributed energy generation technologies, which contrast sharply with the traditional centralized utility model of large-scale power generation, represent a growing opportunity for the electric power industry.
Worldwide, utility companies, investors and policymakers are testing programs and business models to support this industry. According to a recent report from Pike Research, a part of Navigant's Energy Practice, the RDEG market will grow from less than $69 billion in market value in 2012 to nearly $86 billion in 2017.
"The global electric power industry is evolving from a financial and engineering model that relies on large centralized power plants owned by the utilities to one that is more diverse — both in sources of generation and ownership of the generation assets," says research analyst Dexter Gauntlett. "This transition to a more distributed system of power generation will require the evolution of both technologies and business practices. Like any emerging industry, new policies and standards must be developed and practiced before the market can mature."
The new RDEG model and traditional, centralized systems are not necessarily mutually exclusive, and the former is still in its early stages. RDEG installations today represent less than 1 percent of total electricity generating capacity installed worldwide, according to the report.
In a growing number of cases around the world, however, RDEG technologies are more cost-effective than centralized installations that require transmission to population centers. Europe will continue to be the largest market for RDEG during the 2012-2017 forecast period, with most countries expected to hit their renewable energy targets, the study finds, but Asia Pacific, led by China, will grow the fastest as untapped domestic markets for RDEG installations emerge.