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‘United We Fall, Divided We Stand’: Distributed Generation Today and Tomorrow

What is the first thing that comes to your mind when you hear the term, ‘power plant’? Many of you probably picture giant facilities such as thermoelectric, hydroelectric, or nuclear power plants. Having a big scale power plant basically means there are many consumers of such power. Once you get a big power plant it is crucial to run it in a stable manner, since accidents can always take place without warning.

Prevention for electricity-related accidents has been studied for quite a long time as they can cause disasters at homes and workplaces. Distributed generation, for example, is one of the recent alternatives that can improve the stability of the power supply. This suggests that the rules in power supply go against the old saying, ‘United we stand, divided we fall.’ Today, I’d like to introduce you to distributed generation which can increase the stability in electric power supplies.

Why is Distributed Generation Necessary?

In March of 2012, there was a fire at Boryeong thermal power plant, one of the biggest plants in South Korea. This is the facility which contains 8% of the entire equipment for power generation in Korea. Though they were fortunate that the power supply in the region was not compromised by the incident, it took about a hundred days for it to be reactivated. We could see how bigger power plants result in greater damages when accidents happen.

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Fire at Boryeong thermal power plant (Source: Boryeong fire station)

In that same year, Hurricane Sandy hit the east coast of the U.S. and caused colossal damage to coastal cities. Not only New York City and other surrounding cities were flooded, but also many had to go through a terrible blackout. The headquarters of an American telecommunication company, Verizon, was also affected by the storm when their internet data center was flooded and their communication network failed. Huffington Post, an online media company, also had to experience difficulties because their servers went down for about twelve hours.

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Goldman Sachs headquarters, brightly lit during ‘Sandy’ (Source: Reuters)

While everyone else in New York was lost in one of the biggest blackouts, there remained one building that was brightly lit: the Goldman Sachs Headquarters. The reason they could have their lights on was because they had their own independent power plant in the building instead of getting the power from the electrical grid.

As energy supply is so crucial for cities, such a major blackout caused by a natural disaster makes us wonder if there’s any better method for a stable power supply. In Goldman Sachs’ case, we can see that distributed generation might be the answer for this question. What then, do the major power companies think of distributed generation?

Distributed generation: It is the method which generates the power around a receptor instead of depending on a central electrical power grid

Stance from Major Electricity Companies

This year, Utility Dive[1], American media on energy issues, conducted a survey of over 500 experts from electric companies and a part of the questionnaire was on distributed generation. Let’s take a look and see what their stance is on distributed generation.

Q1. What is the biggest challenge your company is facing?

Many expert respondents chose ‘deteriorated infrastructure’ as the biggest challenge. ‘Regularized models’ and ‘aging workforce’, then ‘distributed generation’ followed in that order. Some of them also said distributed generation could become a bigger issue since this is an emerging challenge in recent years. As these companies have used centralized generation methods for quite some time, small power plants with distributed generation systems are something they cannot overlook in the long run.

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Q2. What technology do you think can be a threat to the business model your company is pursuing?
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For this question, more than half said ‘distributed generation’, followed by ‘consumers’ energy management’ and ‘energy storage’. Distributed generation can be a risk factor due to the recent steep decline of the solar panel price. This collapse in price is encouraging more interest in solar power generation, yet it will bring down the price of electricity. This is why distributed generation can be the biggest risk factor to the traditional business models that electricity providers have. Should it be only considered a threat though? Let’s see what these experts think of this technology.

Q3. What do you think of distributed generation?

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What’s interesting here is that while 57% of the respondents think of distributed generation as ‘a chance’, 67% of all respondents actually said that electric power providers should a play direct role in the diffusion of distributed generation. There are many ways to be a part of the change including renting generators or going into partnership with existing companies for distributed generation to help them find a new source of profit. The spread of distributed generation may of course affect the businesses these companies have built in a negative way. However, it’s time for them to accept this change and search for new fields of business.

LG CNS Smart Green Solution and Distributed Generation

Now let’s look at how power companies that are LG’s clients and partners think about the topic. How is LG, then, dealing with distributed generation?

LG has been trying to enter the market for distributed generation in various ways such as solar power generation and ESS (Energy Storage System) and they’re getting results in countries other than Korea as well. Their ‘rooftop solar power generation’ is one of the typical methods of distributed generation that a building can use to provide its own electricity. One thing that becomes critical in the spread of this new system is to manage the generation system and the generated energy. As LG CNS Smart Green Solution also provides energy management services, many anticipate it to contribute to green energy utilization.

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LG CNS Smart Green Solution service(Source: LG CNS Smart Green Solution infographic)

Since buildings are equipped with their own distributed generation system such as solar power panels and fuel cells, energy became something not only to be consumed but also to be generated on the individual level. Can you imagine counting all the different methods applied for distributed generation in a city? When everyone becomes able to produce energy and exchange it, technology for energy management in the city will be crucial.

Distributed generation enabled us to generate power even during natural disasters and is now getting a lot more attention from power suppliers as well. I look forward to seeing LG CNS Smart Green Solution play a central role in the future of this industry.

Written by Kang-Min Kim, LG CNS smart blogger

[1]: The State of the Electric Utility, Utility Drive, 2014 [back to the article]

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  • Raj Nath

    I appreciate your work on Blockchain. It’s such a wonderful read on Blockchain.Keep sharing stuffs like this. I am also educating people on similar technologies so if you are interested to know more you can watch this:-
    https://www.youtube.com/watch?v=SwDZhlnr9ho

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