Distributed electricity generation
By generating and using electricity locally, we can reduce transmission costs and increase the proportion of renewable energy we use with less impact on the environment.
What is distributed generation?
Most of New Zealand's electricity is generated in large, centralised power stations which can be a long way from where the electricity is used. The electricity is transported around the country through transmission lines, and then carried through local distribution networks to where it is needed.
Distributed generation is different - electricity is generated from small-scale systems and is used on-site or nearby. It can be used to generate electricity for homes, farms, businesses and industries.
Distributed generation projects are hooked up to the local distribution network. These local networks are connected to the national grid. This means that when there is not enough electricity being generated by the local project, users can still get electricity from the network. It also means if excess electricity is being generated, the excess can be exported into the network.
Electricity from distributed generation projects can be generated using different systems such as:
- Wind turbines
- Solar panels
- Hydro turbines
- Geothermal heat
- Bio-energy (e.g. biogas or wood energy)
- diesel or gas turbines.
In some cases, ‘cogeneration' heat is produced as well as electricity.
Off-grid generation is also known as stand-alone power systems. They are similar to distributed generation systems but are not connected to the electricity network.
Distributed generation in New Zealand
At least 5% of New Zealand's electricity comes from distributed generation.
Distributed generation can contribute to an efficient and renewable electricity future for New Zealand by potentially:
- Increasing the use of renewable sources of energy
- Improving the efficiency of our electricity system by reducing transmission and distribution losses
- Improving the security of our electricity supply
- Deferring the need for lines upgrades where it is more cost effective to invest in localised energy generation projects.
EECA is supporting the growth of distributed generation by:
- Raising awareness of benefits and costs
- Supporting the industry to improve quality
- Helping to reduce compliance barriers
- Providing financial assistance to overcome barriers.
You can find information here about:
More information
- Renewable energy
- Generating your own energy
- Stand-alone power systems
- Distributed generation fund
- Applying for funding
- Sustainable Electricity Association of New Zealand (SEANZ) has helpful information on domestic-scale distributed generation.
- Electricity Commission website has information on distributed generation, including the Commission's expectations on the terms and conditions for purchasing small surpluses of electricity from small-scale distributed generation.
- Ministry of Economic Development (MED) website also has information on distributed generation, including the Electricity Governance (Connection of Distributed Generation) Regulations 2007.
- Centre for Advanced Engineering (CAENZ) website contains information on an industry-initiative to advance distributed generation in New Zealand.
- Industrial Research Limited (IRL) website contains information on IRL's research programme on distributed generation.
Reports relating to distributed generation
- Analysis of barriers to distributed generation. (June 2010) This report by LECG provides a wide ranging and comprehensive analysis of barriers to the greater uptake of DG in the New Zealand. The study covers the full gambit of DG technologies and potential DG owners or developers. The author, Toby Stevenson, gave a presentation on his report, in September 2010. View the presentation Barriers to greater development of DG in New Zealand.
- Domestic-scale distributed generation: Guidance for local government. Information to assist with the approval processes for small-scale distributed generation. (May 2010).
- Costs and benefits of connecting distributed generation to local networks (September 2008). You can read a summary of the report or the full report.
- Costs of small-scale generation (July 2008)
This report provides indicative unit costs for a range of small scale electricity generation technologies up to 15 MW in capacity. - Remote communities case study (April 2008)
This report investigates how small-scale electricity generation (from 7 to 400 kW) and energy management can provide an alternative to traditional electricity lines supply in remote locations in New Zealand. - Get smart, think small: Local energy systems for New Zealand (December 2006)
- Grid-connected domestic and small-scale renewables in New Zealand: Business as usual uptake projections to 2030 (April 2007)
This report looks at a ‘Business-as-usual' case for the take-up rates of domestic and small-scale distributed generation in New Zealand to the year 2030. - Developing small-scale renewable energy projects in New Zealand (June 2008)
This report provides high level guidance to independent renewable energy project developers who wish to investigate and progress distributed generation projects. The report focuses on geothermal, hydro and wind projects in the range of 10 kW to 20 MW. - Guide for connection of generation plant (October 2007)
The Electricity Engineers' Association has produced a guide to assist distribution network engineers connect distributed generation.
