Distributed generation is a new approach in the electricity industry and as the analysis of the relevant literature has shown there is no generally accepted definition of distributed generation yet.
Traditionally, electricity systems were built around centralized power plants, where large generating facilities were located either near fuel resources or at significant distances from major load centers. These plants supplied electricity through the conventional transmission and distribution (T&D) network, which delivered bulk power to cities, industries, and other end users. This model was developed at a time when the cost of transporting fuel and integrating generation facilities into populated areas was considerably higher than the cost of expanding transmission and distribution infrastructure. As a result, centralized power plants were typically designed to benefit from economies of scale and were often developed as site-specific, custom-built projects.
