Distributed Generation and Resources

Authors

  • Leonard S. Hyman Senior Industry Advisor Salomon Smith Barney

DOI:

https://doi.org/10.13052/dgaej2156-3306.1614

Abstract

EPRI has forecast “at least 20 GW of distributed resources... for
installation in the United States during the coming decade...” 1 or
about 20% of the total.
McGraw-Hill’s World Energy, “The Official Publication” of the
17th World Energy Congress, seems to have no mention of distrib-
uted resources,
although one
writer commented
that “You might
build many
smaller plants
faster, but you
must build many
of them—and in
the end, the time
saving may be
minimal and the
cost higher.”2
The Energy
Information Administration projects a 0.7 GW increase in customer owned on-site
capacity from 1998 to 2020, and adding in fuel cells brings the number
up to 0.9 GW. 3
At the same time, the market value of the stocks of only four
companies in the distributed generation arena approximated $16 bil-
lion at the end of August, 4 or about 5% of the value of the electric
utility stocks in the S&P 500 average. That market valuation, probably,
implies net income for the four of $1-2 billion within 5-10 years,
which probably implies sales of at least $5-10 billion.

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Author Biography

Leonard S. Hyman, Senior Industry Advisor Salomon Smith Barney

Leonard S. Hyman, CFA, is a senior industry advisor to Salomon
Smith Barney. Previously he was managing director of Fulcrum Interna-
tional Ltd., as well as an independent consultant specializing in the
economics and finances of energy and telecommunications utilities.
From 1978 to 1994, as head of the Utility Research Group and first
vice president at Merrill Lynch, he supervised and maintained equity
research on foreign and domestic energy and telecommunication utili-
ties. He was a member of privatization teams for offerings of British,
Spanish, Mexican, Argentine and Brazilian utilities and consultant for
other restructuring studies. Prior to joining Merrill Lynch, he was a
partner at a New York Stock Exchange member firm and an officer at
Chase Manhattan Bank.
Author of America’s Electric Utilities: Past, Present and Future, author
of The New Telecommunications Industry: Evolution and Organization and
editor of The Privatization of Public Utilities, he has contributed to other
books and to professional journals, and is a member of the editorial
board of Cogeneration and Competitive Power Journal .
For more than a decade, Mr. Hyman was cited by Institutional In-
vestor as one of the leading research analysts in his field. He is a Char-
tered Financial Analyst (CFA). He holds a BA from New York University,
where he was elected to Phi Beta Kappa, and an MA in economics from
Cornell University, where he majored in industrial organization and
minored in Latin American studies.
Salomon Smith Barney, Inc., 388 Greenwich St., New York, NY 10013;
212-816-8508.

References

Electric Power Research Institute, Electric Technology Roadmap:

Powering Progress, 1999 Summary and Synthesis (Palo Alto: EPRI,

July 1999), p. 36.

Christopher Bergesen, “Outlook Stable: The Real Market for New

Electric Power Plants,” McGraw-Hill’s World Energy, 1998, P. 53.

Energy Information Administration, Annual Energy Outlook 2000:

with Projections to 2020 (Washington, DC: EIA, December 1999).

Ballard, Capstone, Plug Power and Fuel Cell Energy.

DTE Corporation has projected that by 2010, DG sales will reach

$13 billion, at $500/kW, and account for “20% of world-wide gen-

eration capacity additions.” Merrill Lynch, Energy Technology,

June 29, 2000, p. 13.

EPRI, op. cit ., p. 34.

EIA, op., cit ., reference case, pp. 129-130.

Samples of five-year projections July 2000, from Salomon Smith

Barney, Merrill Lynch and Value Line. Unweighted composites.

Shimon Awerbuch, “Pricing Reform for the Local Disco: Setting

Rates That Will Support Distributed Generation,” Public Utilities

Fortnightly, July 1, 2000, pp. 42-53.

For those not brought up as blacksmiths, the original reads, “You

should hammer your iron when it is glowing hot.”

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Published

2001-01-16

How to Cite

Hyman, L. S. . (2001). Distributed Generation and Resources. Distributed Generation &Amp; Alternative Energy Journal, 16(1), 33–41. https://doi.org/10.13052/dgaej2156-3306.1614

Issue

2001: Vol 16 Iss 1

Section

Articles