Smaller generating facilities that are located on premise or close to consumers of electricity can play an important role in addressing local supply needs. Distributed generation can help improve transmission and distribution reliability by reducing losses and congestion on the power lines. In most cases, distributed generation projects can be completed faster than large-scale projects.

Distributed generation projects can take many forms:

Small-scale generation projects that typically use natural gas or renewable energy sources designed specifically to supply electricity to the local utility or to the wholesale market.

Electricity produced by businesses that have generators installed within their facilities. This type of self-generation is created primarily to meet the company's own electricity needs, although it may choose to sell extra power to its utility or the wholesale market.

What you need to know:

If you plan to connect to the distribution system (less than 50 kilovolts (kV)), contact your local utility about the technical requirements. If you plan to connect to the transmission grid (50 kV or higher), contact the applicable transmitter. All connections to transmission lines as well as any generation project greater than 10 megawatts (MW) must be reviewed.

If you connect directly to the transmission lines, you must register with the Local Energy provider as a market participant.

You may need a generator license if the generator is being used to generate electricity to make revenue versus an e-metering opportunity.

If you connect to the distribution lines, carefully review your costs to determine whether it is better to sell to your local utility or participate in the wholesale market.

Your utility will buy electricity from you at the wholesale price as long as you are able to meet technical and metering requirements set out in the Distribution System Code. 

You can sell electricity to the wholesale market and, depending on whether you can control the timing and amount of your output you can also receive payments to provide operating reserve. There are, however, costs associated with registering and participating in the wholesale market. More information about registering as a market participant will be available soon in the e-Metering sections our quarterly publication "Your Energy FootPrint".