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Bypassing the Power Grid

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LONDON — For nearly a century, wealthy countries have relied on just one model of power distribution: sending electricity over huge transmission grids from big generating plants to customers in their homes, offices and factories.

That may be starting to change. Renewable-energy technologies like solar and wind power, which in many countries have begun to shake up the mix of energy sources, are now also challenging the traditional distribution system.

Advocates of a decentralized approach, known as distributed generation or distributed energy, envision a day when grids will no longer be one-way systems.

Thousands of small generators, including rooftop solar panels and facilities that extract energy from garbage or sewage, could feed into the system, replacing or complementing big coal, nuclear or natural gas plants, they say.

“It’s a real paradigm shift,” said John Farrell, energy expert at the Institute for Local Self-Reliance, a research and advocacy group based in Washington and Minneapolis. “It’s not only a shift in the physical generation of power, but also the power over the system in terms of who is in control of it and who can benefit from it.”

Some energy experts say a less centralized system would be better suited to the diverse mix of energy sources that is likely to be needed to reduce climate-warming carbon emissions.

It could also be less vulnerable to hits from stormy weather, demand overload and other difficulties that have sometimes knocked out traditional systems.

When Hurricane Sandy left much of New York, New Jersey and Connecticut in the dark last year, for example, a handful of institutions, including New York University’s Greenwich Village campus and Co-Op City, a huge housing complex in the Bronx, kept their lights on with “microgrids” that disconnected temporarily from the larger system.

They kept going with the help of on-site, natural-gas-fired plants that both generate electricity and channel residual heat into heating systems, a highly efficient process called cogeneration.

Some experts, though, have doubts about the viability of distributed generation as a major contributor of power. Making haphazard changes to a system as complex as the electrical grid could have unintended consequences, says the association representing much of the American utility industry, which could lose revenue through decentralization.

Small, decentralized generators are mostly inefficient, costing far more per unit of output than conventional power or even utility-scale renewable energy, like big solar farms, said Richard McMahon, vice president for energy supply and finance at the Edison Electric Institute, the association that represents the biggest American power companies.

Without careful pricing and regulation, he said, an overexpansion of distributed generation could drive up electricity prices and unfairly shift costs to customers who cannot afford to produce their own electricity.

Even homes with rooftop solar panels, Mr. McMahon noted, rely on the grid when the sun is not shining. “If you use it, which these solar rooftops do extensively, you need to pay for your share of the transmission,” he said.

Distributed energy has already made some inroads in parts of the United States and Europe, with small generators feeding power from solar panels or wind turbines into the grid for a fee.

“Householders are able to become mini-power stations, schools can become power stations, churches,” said Mike Landy, senior policy analyst at the Renewable Energy Association, in London. “You’ve got farmers now who are looking at this as a new source of income.”

Precise estimates are hard to find, but Mr. Farrell said between 1 percent and 2 percent of American power is now generated by decentralized, renewable sources.

Germany, which aims to remake its energy system completely and to rely almost solely on clean sources by 2050, has been a leader in decentralizing.

Germany’s “feed-in tariff,” a guaranteed price per kilowatt hour, has helped drive widespread installation of solar panels around the country, said Craig Morris, lead author at Energy Transition, a Web site focused on the German overhaul. “Because of that, all of this has really gone wild, and it’s really been driven by citizens,” he said.

Still, there have been some unforeseen consequences. German electricity prices have skyrocketed while carbon emissions have actually increased as oil- and coal-powered plants have fired up to fill gaps in the incomplete new system.

That should be a warning for the United States, said Mr. McMahon of the American utility association.

Yet whatever the potential downside in converting existing systems in developed countries, distributed generation could be hugely transformative in less developed nations in Asia, Africa and elsewhere, where energy demand is growing rapidly.

Countries without well-developed power systems could simply skip over centralized grids and go straight to installing dispersed generators, in the same way that many poor nations leapfrogged landline telephones and built mobile phone networks instead, Mr. Farrell said.

“It’s by far the most likely way in which more than two billion people will get electricity. And it can happen rapidly in places,” said Rachel Kleinfeld, founder of the Truman National Security Project, a Washington research group.

The biggest obstacles, she said, are political, not technical. In many developing countries, governments like to control energy systems, partly because of the opportunities for graft that they provide, said Ms. Kleinfeld, co-author of a book on the subject last year.

International aid agencies also prefer to spend on big infrastructure projects, delivered through central governments, she said.

If political obstacles — which also include subsidies for conventional fuels like kerosene — can be removed, “there’s a huge untapped private sector market here,” she said.

Distributed energy in the developing world takes forms as varied as solar panels that support a single bulb or cell phone charger and larger installations that power entire villages or neighborhoods. Diesel generators, an older, dirtier form of decentralized energy, are common, as is natural gas.

Solar power is growing quickly in Kenya, while Nepal is installing small-scale hydroelectricity generators, Ms. Kleinfeld said. China is also opening its grid to distributed energy, and encouraging local generation from solar, wind and other clean sources.

In countries that already have centralized systems, though, even advocates acknowledge that a big expansion of distributed generation may not be easy.

Grid improvements may eventually be necessary. And new ways of storing power will be crucial, since sources like solar and wind do not produce all the time, said Francis Cummings, vice president at the Peregrine Energy Group, a Boston consulting firm.

“That’s a wild card,” Mr. Cummings said. “More innovation is going to be required to fulfill the potential of distributed energy.”