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Distributed generation

Distributed generation refers to electricity production at or near the place where it is consumed—in homes, commercial buildings and industrial premises. It can also be applied on a larger scale in communities or precincts.

Distributed generation is an alternative to conventional electricity generation that uses centralised, large-scale power stations to generate electricity and rely on high voltage transmission networks.


Examples of distributed generation include:

  • solar photovoltaic arrays
  • small-scale wind turbines mounted on rooftops
  • cogeneration plants (which produce electricity and usable heat from a single energy source)
  • standby generators.


Potential benefits of distributed generation include:

  • reduced (or deferred) need for electricity infrastructure upgrades, as it can reduce the load on the electricity network
  • reduced transmission and distribution losses, as energy is generated near or at the place it is consumed
  • improved energy supply, reliability and security
  • the opportunity to use generation technologies with lower operational costs and fewer greenhouse emissions than electricity supplied through the centralised transmission and distribution networks.

Distributed energy

These benefits are best realised when distributed generation is combined with energy efficiency and demand management. The three elements are jointly referred to as distributed energy.

Last updated
9 January 2014