Frequently Asked Questions
What Is Distributed Energy?
According to the U.S. Department of Energy, distributed energy consists of "a range of smaller-scale and modular devices designed to provide electricity, and sometimes thermal energy, in locations close to consumers." These devices include both fossil and renewable energy technologies such as reciprocating engines, combustion turbines and steam turbines, microturbines, combined heat and power systems, fuel cells, wind turbines, photovoltaic arrays, and energy storage devices such as batteries and flywheels.
According to the U.S. Department of Energy, distributed energy consists of "a range of smaller-scale and modular devices designed to provide electricity, and sometimes thermal energy, in locations close to consumers." These devices include both fossil and renewable energy technologies such as reciprocating engines, combustion turbines and steam turbines, microturbines, combined heat and power systems, fuel cells, wind turbines, photovoltaic arrays, and energy storage devices such as batteries and flywheels.
Why Is Distributed Energy Important To Communities & Real Estate Development Companies?
Distributed energy technologies offer communities and development companies building master-planned communities, solutions to problems such as blackouts, brownouts, and power quality fluctuations. They also strengthen community resilience by providing enhanced energy assurance and security for critical community facilities supporting essential functions during disruptions to utility electricity grids and natural gas pipelines. Distributed energy resources also enable communities to reduce their carbon footprints and, in the case of waste-to-energy systems, to address other environmental concerns such as solid waste and waste water management. Utilities also benefit from distributed generation installations in communities as they reduce peak loads and contribute to overall grid reliability.
Distributed energy technologies offer communities and development companies building master-planned communities, solutions to problems such as blackouts, brownouts, and power quality fluctuations. They also strengthen community resilience by providing enhanced energy assurance and security for critical community facilities supporting essential functions during disruptions to utility electricity grids and natural gas pipelines. Distributed energy resources also enable communities to reduce their carbon footprints and, in the case of waste-to-energy systems, to address other environmental concerns such as solid waste and waste water management. Utilities also benefit from distributed generation installations in communities as they reduce peak loads and contribute to overall grid reliability.
Where Have Distributed Energy Technologies Been Deployed?
Distributed energy technologies have been deployed in a wide range of community applications. They include applications supporting energy supplies to: municipal police and detention centers, fire and emergency medical facilities and 911 command centers; critical administrative data centers and telecommunication operations; bridge, tunnel and port operations; solid waste management and landfill operations; municipal waste water and potable water treatment plants; and road lighting and traffic signal systems. Distributed energy technologies have also been incorporated into district thermal and power systems serving civic center complexes and entire central business districts and residential communities.
What Are The Barriers That Prevent Their Adoption?
In addition to the lack of knowledge about distributed energy resources among community officials and real estate development practitioners, the most significant barriers preventing their adoption are outdated power regulations and policies and local ordinances. Power sector regulation in the United States remains focused on a model of energy supply and transmission designed to accommodate large central power plants and long-distance transmission lines, despite a trend dating back to the 70s when both utility and non-utility owned plants have become continually smaller in size. Specific policy and procedural barriers preventing the adoption of distributed energy technologies include those related to interconnection, exit fees, feed-tariffs and metering, load retention rates, application procedures, insurance, siting and permitting, standby fees and rate based return on investment. Fortunately, policy innovations are now being developed to address each of these barriers, paving the way for the accelerated adoption of distributed energy technologies that is now taking hold across the nation. Users can learn about these innovations under the Resources menu.
How Are Community Distributed Energy Applications Financed?
There are at least eight public financing resources that could be utilized to fund distributed energy technology applications. These include: community development block grants; capital development block grants; tax levies with voter approval, development impact fees for new developments and homes; debt financing through general obligation bonds; debt financing through special tax and revenue bonds; private activity bonds from redevelopment projects; and tax incremental financing. In addition to these potential sources of funding, a community can leverage state incentive programs such as self-generation incentives, state clean energy funds, and state public benefit funds, and federal incentives for public organizations such as federal investment tax credits and rebates.
Two of the most popular financial models that have been used by public entities to support distributed energy applications are performance contracting and third-party ownership arrangements. Under the performance contracting arrangement, distributed energy applications are funded with cost-savings from energy efficiency measures through loan and lease mechanisms. Under the third-party ownership arrangement, an outside entity retains ownership of the distributed energy technologies while the public organization enjoys their benefits and avoids the risks associated with direct ownership. Both arrangements are discussed in detail under the Financing tab found in the Resources menu.
Two of the most popular financial models that have been used by public entities to support distributed energy applications are performance contracting and third-party ownership arrangements. Under the performance contracting arrangement, distributed energy applications are funded with cost-savings from energy efficiency measures through loan and lease mechanisms. Under the third-party ownership arrangement, an outside entity retains ownership of the distributed energy technologies while the public organization enjoys their benefits and avoids the risks associated with direct ownership. Both arrangements are discussed in detail under the Financing tab found in the Resources menu.
How Can One Assess The Applicability Of Distributed Energy For A Community Development Project?
This website is designed to enhance the capacity of community officials and real estate development practitioners to assess the applicability of distributed energy resources for the most common development projects. The content provided under the next two menus provide the uninitiated reader an understanding of the operational characteristics of the full range of technologies and their applications in a community infrastructure context. The content in both will enable users to begin to ask the right questions. The two menus that follow these contain additional publications and materials to expand a users knowledge base and contact information to consultants and vendors that will enable a user to further their inquiry. Links to other community and real estate development industry organizations round out the offerings here and enable users to join the growing network of communities adopting advanced distributed energy resources across the United States.