Will distributed resources ultimately replace central station generation serving commercial and residential loads?

Historically, growth in electric load has been served by adding new large central station generating units, building high voltage and extra high voltage transmission lines and extending traditional distribution systems. These interconnected power systems possess the advantages of having high efficiencies (e.g. low energy losses) and high levels of reliability. Economies of scale were achieved by interconnecting to other power systems which lowers the overall generation cost by reducing the system generation reserve margins. These systems are being seriously challenged, because of higher financial risks, lack of available physical space for expansion and a multitude of environmental concerns. The author describes how the utilization of the existing transmission systems will be improved in the near term by applying unified power flow controllers (UPFC) and phase shifting transformers to control the power flows and make better use of existing capacities. However, these technologies are only a short-range solution and after these improvements are implemented, transmission systems will again become a scarce commodity