The development of the central generating plant gradually replaced local generation, and reached its culmination, if we can use that term in this context, in the building of huge nuclear power plants. As we all now know, bigger did not prove better, and the current trend is to build smaller, more focused generating plants located where power is needed. Notably, distributed generation is most often on the customer's side of the meter. It is the customer, not the utility, who generates the power on his site, and then arranges to connect it to the utility distribution grid, through an appropriate interconnection. Furthermore, the successful development of distributed generation is highly technology-dependent, and requires utility cooperation for the necessary utility interconnections.
Interconnection is an important issue.
The DG application must coexist in harmony with the grid. The ability of Distributed Generation to be connected to the grid is important because of the potential for the DG owner to sell excess capacity back to the grid. DG's strategic value derives from its flexibility. This issue is not yet resolved. Some examples of distributed energy technologies are micro-turbines, fuel cells, photovoltaics, and wind turbines.