There is an interesting debate ongoing on the Gristmill blog about whether the future of electrical generation lies primarily with big centralized power plants, like today, or with distributed systems.
Naturally, there are many factors that influence which is more attractive, many of which are regulatory rather than inherent to the physics or economics. I suspect the key dynamics will be the relative efficiency of differently sized facilities, the rate at which low-loss high voltage direct current (HVDC) transmission emerges, and the rate at which financing options for small facilities proliferate. Other important considerations will be the rate of improvement in the economics of solar photovoltaic systems, as well as the development and deployment of demand management and energy storage options for the grid.
In any event, it is doubtful whether one approach or the other will ever truly dominate. In all probability, a low-carbon society will incorporate both approaches in keeping with the strengths of different technologies and the needs of different areas.
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There is something intuitively appealing about generating power locally: within a city, neighbourhood, or even building.
At the same time, if we want to use a lot more renewables, we will need the diversity provided by a national grid linking many seperate facilities.