Avoided Cost Comparison Levelized Cost of Energy ($/MWh)

Foreword
The provision of reliable and secure energy to
meet the growing demands of this century, in a
way which mitigates the adverse effects of climate
change, is an existential challenge to the human
enterprise. A failure to meet the challenge would
pose grave risks to the functioning of world economies,
the nature of societies and our endangered
ecosphere. In fact, the degree of success in this
area will be a big determinant of whether this will
be the best or the worst century for humankind.
One proposed method for improving the economic,
environmental and energy-security performance
of the U.S. power sector is the adoption
of distributed power systems (DPS), a combination
of distributed generation and electricity storage
technologies. In this inter-disciplinary paper,
scholars from the Brookings Institution’s Energy
Security Initiative and the Hoover Institution’s
Energy Task Force evaluate the case for greater
deployment of DPS. The chapters which follow
set out a number of considered conclusions and
clear recommendations for all policy makers who
have a responsibility for ensuring the security and
sustainability of our energy system now and for
future generations.
Strobe Talbott
President
Brookings Institution
aSSESSIng THE ROlE OF dISTRIBuTEd POwER SySTEmS In THE u.S. POwER SECTOR
III
Many energy analysts have noted the potential
for DPS to become a major part of our electricity
infrastructure. The recent drop in key technology
costs has brought this potential closer to
reality. But in this rapidly developing field, the
great progress on the technological front has yet
to be fully matched by progress in policy making.
And major questions of affordability, integration,
and security remain to be answered before we can
determine what role distributed energy sources
should play in our future energy system.
DPS offers the potential for more reliable, secure,
and green energy. It can encompass everything
from fuel cells providing electricity and clean water
to a remote army outpost in Afghanistan to
solar panels on the roof of a home in Arizona. At
the same time, possible pitfalls related to DPS use
must be seriously and realistically addressed before
we make a major commitment to a distributed
energy future.
This report provides a comprehensive survey of
the current technology and policy landscape of
DPS and offers recommendations for its future
use. As it highlights the importance of an emerging,
critical policy issue that has not received the
full attention it merits until now, we believe the
report will be useful to policy makers and practitioners
alike.
George P. Shultz
Thomas W. and Susan B. Ford Distinguished Fellow
The Hoover Institution