The economics of distributed energy generation: a literature review

Grant Allan, Igor Eromenko, Michelle Gilmartin, Ivana Kockar, Peter McGregor

Research output: Contribution to journalArticle

72 Citations (Scopus)

Abstract

The UK electricity system is likely to face dramatic technical and institutional changes in the near future. Current UK energy policy focuses on the need for a clean, affordable and secure energy supply. Decentralisation of the electricity system is recognised as one means of achieving efficient and renewable energy provision, as well as addressing concerns over ageing electricity infrastructure and capacity constraints. In this paper we provide a critical literature review of the economics of increased penetration of distributed energy generation. We find that there exists a large volume of research considering the financial viability of individual distributed generation technologies (and we are necessarily selective in our review of these studies, given the wide variety of technologies that the definition of distributed generation encompasses). However, there are few studies that focus on the pure economics of individual or groups of distributed energy generators, and even fewer still based on the economy-wide aspects of distributed generation. In view of this gap in the literature, we provide suggestions for future research which are likely to be necessary in order adequately to inform public policy on distributed generation and its role in the future of UK energy supply.
LanguageEnglish
Pages543-556
Number of pages14
JournalRenewable and Sustainable Energy Reviews
Volume42
Early online date7 Nov 2014
DOIs
Publication statusE-pub ahead of print - 7 Nov 2014

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Distributed power generation
Economics
Electricity
Energy policy
Aging of materials

Keywords

  • energy distribution
  • economics of distribution
  • electricity systems

Cite this

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title = "The economics of distributed energy generation: a literature review",
abstract = "The UK electricity system is likely to face dramatic technical and institutional changes in the near future. Current UK energy policy focuses on the need for a clean, affordable and secure energy supply. Decentralisation of the electricity system is recognised as one means of achieving efficient and renewable energy provision, as well as addressing concerns over ageing electricity infrastructure and capacity constraints. In this paper we provide a critical literature review of the economics of increased penetration of distributed energy generation. We find that there exists a large volume of research considering the financial viability of individual distributed generation technologies (and we are necessarily selective in our review of these studies, given the wide variety of technologies that the definition of distributed generation encompasses). However, there are few studies that focus on the pure economics of individual or groups of distributed energy generators, and even fewer still based on the economy-wide aspects of distributed generation. In view of this gap in the literature, we provide suggestions for future research which are likely to be necessary in order adequately to inform public policy on distributed generation and its role in the future of UK energy supply.",
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The economics of distributed energy generation : a literature review. / Allan, Grant; Eromenko, Igor; Gilmartin, Michelle; Kockar, Ivana; McGregor, Peter.

In: Renewable and Sustainable Energy Reviews , Vol. 42, 07.11.2014, p. 543-556.

Research output: Contribution to journalArticle

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