With a further advanced energy market, Europe offers the United States valuable lessons when it comes to Distributed Generation.

“Rejecting the grid” used to conjure up images of a backwoods cabins with fully stocked fallout shelters. Today, with advanced technologies such as CHP and solar-plus-storage, many view distributed generation (DG) as the logical next step in the evolution of the energy sector. However, disconnecting from a centralised grid is not as simple as pulling the plug.

In the U.S., advocates of DG must combat an infrastructure of transmission and generation that is deeply ingrained in the American way of life. In Europe, as with many evolutionary energy trends, steady progress has already been made in this arena. With the United States catching up, Europe energy markets offer valuable insights into what has worked and what has not when it comes to distributed generation.

The E.U.’s 20-20-20 plan has prompted interest in DG throughout Europe. A 2014 paper out of Cambridge University explored DG regulation and trends in three European countries who have invested heavily in integrating DG in recent years: Germany, Denmark and Sweden. In it, they highlight many positives that have come from DG. Most notably, DG has helped to lessen congestion on tradition transmission lines, increased energy security, and given more power power reactivity to the user, increasing efficiency.

Of course all of this comes at a cost. In all three of of these countries, the integration of DG has been funded by electricity tariffs, a cost that gets socialized through electricity bills. While this may be palatable to counties that are generally more socialist, higher energy costs have historically been a tough pill to swallow for U.S. customers and lawmakers.

In addition, the major hurdle that DG must clear is the fact that DG technologies (largely solar and wind)  provide intermittent energy and create logistical nightmares when it comes to load balancing. One solution to grid stability issues has been for countries to keep running their traditional power generators, then “dump” excess power across the border when renewable sources are able to keep up with demand. This practice will become less sustainable, however, as more E.U. countries adopt renewable programs of their own.

A better long term solution to grid stability will be in solar-plus-storage, which seems to be getting closer to a reality by the day. This will allow excess renewable energy, created during peaks, to be stored on site to be used later. The advancement of this technology, puts the U.S. in a better place to advance DG than Europe was when it began its efforts.

Although the U.S. DG integration is only behind Europe by a handful of years, the advancement of technology in that short window may greatly help. In addition to more feasible storage options, the U.S. can also benefit from less intermittent green technologies, such as CHP, which are being adopted at impressive rates.

Looking ahead, the U.S. has a crystal-ball view into the advantages and disadvantages of DG integration, as demonstrated by the E.U. However, rapid technological advancements has provided the U.S. with a slightly better set of tools, which should help it avoid the barriers seen in Europe.

As the market moves towards a heavily distributed future, power producers are at risk of falling behind without strategy and proper data management. Having an asset investment management (AIM) solution will help identify risks with more clarity, provide full project pipeline visibility and ensure compliance — allowing power producers to stay ahead of overhead costs and gain the competitive advantage needed to thrive in this multi-trillion dollar market.