Tuesday, July 21, 2009

Overview of the Electric Grid

America operates a fleet of about 10,000 power plants. The average thermal efficiency is around 33%. Efficiency has not changed much since 1960 because of slow turnover of the capital stock and the inherent inefficiency of central power generation that cannot recycle heat. Power plants are generally long-lived investments; the majority of the existing capacity is 30 or more years old.

The roughly 5,600 distributed energy facilities typically combine heat and power generation and achieve efficiencies of 65% to 90%. Distributed energy facilities accounted for about 6% of U.S. power capacity in 2001.

The profile of the electric power generation industry is changing rapidly, however. A shift in ownership is occurring from regulated utilities to competitive suppliers. The share of installed capacity provided by competitive suppliers has increased from about 10 percent in 1997 to about 35 percent today. Recent data suggest this trend is slowing.