How On-site Power Generation Works

Find information about the benefits and applications for generating your own electricity on site.

For large and small businesses, on-site power generation can be an attractive alternative to buying power from your local electric utility.

Large on-site generation facilities that use large natural gas turbines can have capacities of several hundred megawatts. Smaller on-site generation systems, however, can be installed at commercial facilities, such as laundries, schools, hospitals and hotels.

On-site generation can be used both in the power generation mode only, or in the combined heat and power mode (cogeneration) where thermal energy that would ordinarily be rejected is cost-effectively used.

Benefits of On-site Generation

There are a number of potential benefits for businesses who generate their own power on site.

Energy Cost Savings

When the cost of generating power onsite is less than the cost of buying the power, you pocket the cost savings.

You can save even more by using the heat associated with the generation of power that's ordinarily wasted, thus avoiding the purchase of the natural gas that would have provided the heat.

Energy cost savings alone can often justify the installation of distributed generation. More than 100 cogeneration facilities currently operating in our system have rewarded their owners with substantial energy cost savings.


On-site generation can provide an essential redundancy to power provided by the local electric utility. Almost all of the current operators of cogeneration plants can get their power from the local electric utility if needed.

This provides a dual source of energy, as they have power available when their systems are down (say for occasional maintenance) or when there is a failure of the local electric utility.

This redundancy in turn can provide for health and safety, industrial process continuity or significant protection from computer and information technology upset, resulting in significant cost savings.

Power Quality

In addition to reliability, on-site generation in concert with small power storage systems, can offer improved power quality. Harmonics, voltage sag and momentary outages (enough to trip expensive computers) can all be prevented through the use of such systems.

Risk Management

On-site generation can be used as a physical hedge to lock in the cost of power, rather than expose your business to the fluctuations of the electric energy market.

Given the impact of seasonal and daily weather on the cost of electric energy, it's been said that the volatility of the electric market will dwarf that of any of the other commodities (corn, gold, pork bellies, etc) that can be traded in an open market.