What is Distributed Generation?

This month, our webinar talked about 7 myths in Distributed Generation

Distributed Generation is an alternative sourcing alternative combining cost reduction and sustainability. But what exactly is Distributed Generation, also known as GD?

In Distributed Generation, consumers choose to generate their own power in a location close to the point of consumption. With this solution, there is no great investment, and there is no charge for the use of the Transmission Lines required to take energy from generator to distributor.

Consumers in the captive market cannot sell any surplus energy, that is, the amount of energy left after they consume what they need. They are free to choose any renewable source for their GD point, such as solar, biomass, biogas, hydraulic power plants and wind power, among others.

Solar power accounts for almost 85% of the installed GD capacity in Brazil. This can be explained by the easy installation in homes, industrial halls or in solar farms, making it an attractive business model for consumers.

ANEEL Normative Resolution 482/2012 came into effect on April 17, 2012, allowing free consumers to generate their own energy from renewable sources. Under the same resolution, any surplus power generated by consumers in the free market can be credited to the local distribution network.

Minigeration and Microgeneration in Distributed Generation

Resolution 482 also defines two DG categories: microgeneration and minigeneration.

Microgeneration applies to plants with up to 75 kilowatts (kW) installed power — in this case any possible expenses associated with the change are paid by the corresponding distributor. In minigeneration, installed capacity varies between 75 and 5,000 kW and the consumer unit will be charged for any required reinforcement in network structure or meter replacement.

Consumers wishing to switch to microgeneration must submit a request to do so, and the distributor will need at least 34 days to effect the change.

For minigeration, the minimum period required by the distributor for the change is 49 days.

Distributed Generation Models

There are three different Distributed Generation models: local self-consumption, remote self-consumption and shared generation.

In local self-consumption, power is generated in the place where it is also consumed, so part of this power does not go through the meter, but rather flows directly from the photovoltaic plates. Remote self-consumption refers to projects where power is generated in a different location, but still within the distributor concession area and billed to a single consumer unit (corporate or individual). Shared generation is the model where a single generating unit distributes power to different corporate or individual consumers in a consortium, cooperative or condominium. The image below shows the different models:

Source: Comerc ESCO


Return on investment in GD projects

Payback in Distributed Generation projects will vary based on power source and location. For photovoltaic systems in residential areas, investments will be paid back fast. Depending on the distributor, consumers will get their investment back in 3 to 5 years.

When choosing a photovoltaic system, it is important to engage specialists to make sure the roof structure is robust enough to bear the weight of the panels, approximately 15 kg per m².

Advantages of Distributed Generation

The advantage of this form of power generation is that you can transfer credits to another household or business.  Another advantage is the exemption from different taxes charged in the captive market, representing significant savings for consumer units generating their own power.

Comerc offers consulting services in distributed generation for companies in different industries and designs customized solutions to better meet specific needs.

First, our specialists analyze the customer’s consumption profile. Next, we carry out a study to determine whether it makes more sense to get a distributor to build a plant, or for the client to build their own – in this case we indicate useful resources.

The BodyTech gym network is one of our clients taking advantage of their Distributed Generation project.

Webinar Comerc Explains

In March, the title of our Webinar was “Thinking about investing in GD? Understand the 7 Myths”. Our experts Talles Bonato, Distributed Generation Analyst and Yuri Kalchgruber, Energy Efficiency Coordinator, discussed important aspects to consider in decisions.

Check out the full video on YouTube and subscribe to our channel to keep up-to-date.

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