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Wake Forest Journal of Law & Policy




Experts predict that distributed energy will contribute as much as twenty percent of the U.S. power supply by 2020. While no one will wake up tomorrow morning to an entirely new energy distribution system — complete with solar panels on the roof and a wind turbine in the back yard — distributed generation is receiving significant attention as the disruptive technology that will ultimately revolutionize the way energy is delivered in the United States. The reason for this shift is, in part, due to new technology that allows for more flexible localized generation of energy, and in part due to a changing climate resulting in frequent and violent storms that destroy large-scale energy infrastructure.

A variety of distributed energy technologies are available today, including solar photovoltaic panels, battery storage, and micro turbines. These innovative technologies are not only appealing to today’s tech-savvy customers they are also becoming more economically accessible to the average customer. This shift in customer behavior will directly threaten the current energy delivery model. The more customers utilize distributed generation the less customers rely upon the transmission grid. Remaining customers will bear a higher burden of the transmission costs. The higher the cost of electricity to the remaining customers, the more likely those customers will seek out on-site generation as well. It could result in a vicious cycle for an unprepared utility company.

Another significant threat to the current energy delivery system is climate change. Increased ambient air temperatures, increased (and more severe) storms, flooding, and sea level rise have all exposed the vulnerabilities in the traditional central energy delivery system. For example, transmission infrastructure and generation facilities are vulnerable to physical damage during storms, fires, and floods, and they operate less efficiently in hotter temperatures. Distributed generation is emerging as a viable alternative that is less susceptible to these changing weather patterns, in part because it utilizes little to no transmission infrastructure and the generation facilities are located on-site, or near the end user.

Utilities and regulatory agencies will need to develop a more sustainable energy delivery system in the face of these climate and technological changes. Given that distributed generation appears to be a “culprit” in disrupting the traditional energy delivery model as well as a potential “solution” to a new, more sustainable, model, the focus should, at least in part, be on the flexible inclusion of distributed generation. Unfortunately, in recent years, energy laws and policies—such as Renewable Portfolio Standards and Multi Value Project policies—have instead promoted and facilitated large-scale energy development, resulting in billions of dollars being spent on unsustainable energy delivery systems. Policymakers will need to work to undo these damaging policies.

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Wake Forest University School of Law

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