The distributed generation market in Europe is set to expand, according to a new report from Frost & Sullivan. It will see robust growth over the next few years as smaller-scale generation technologies become less costly, more reliable, efficient, and environmentally friendly compared to conventional plants, says the report's author Harald Thaler. Almost all DG technologies run on cleaner fuels, benefiting from low emissions and have smaller transmission losses than centralised generation. But there are two disincentives for moving towards DG - the price advantage of central generation and the ongoing liberalisation and deregulation process.
For a broad majority of utilities, DG is a complementary niche rather than an alternative way of producing power that would gradually be able to replace central power plants. Most utilities, therefore expect relatively low growth rates for DG, at least over the next few years. Detailed forecasts reveal that the mature genset market will remain relatively stable over the period ending 2007, exhibiting only modest growth. Europe's utilities believe that installations in the 1-10MW output range will undergo the fastest expansion. The total value of the European DG market in 2001 (including renewables) has been calculated at $5.3 billion.
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