The potential impact of distributed generation technologies on future energy use and carbon emissions in the United States: Scenario analysis using the National Energy Modeling System (NEMS)

Distributed generation has the potential to dampen future increases in carbon emissions attributable to electric generation, as well as to possibly reduce some of the high costs of upgrading the electric power grid. On-site generation has the advantage of allowing the capture of the waste heat from generation, lowering total energy requirements (e.g., combined electric, heating, and water heating energy) compared with remote generation where waste heat is generally emitted directly into the atmosphere. Also, by generating electric power on site, electricity transmission and distribution losses are avoided. Currently, the National Energy Modeling System (NEMS) includes up to ten distributed generation technologies in the residential and commercial buildings sectors. These include conventional oil or gas engine and turbine technologies, as well as newer, still-developing technologies such as solar photovoltaic (PV), fuel cells, and micro-turbines. This paper analyzes the potential nationwide impact of distributed generation on energy consumption and carbon emissions by varying assumptions regarding the cost, availability, and tax treatments for distributed generation technologies, as well as alternative energy price scenarios, as forecasted using NEMS.