Estonian electricity generation requires new investments due to limitations for emissions, deterioration of old power plants and growing electricity consumption. This could be the turning point for distributed generation (DG) in Estonia. DG would allow saving energy and reducing emissions due to more efficient fuel usage. Also the supply reliability and energy security would be increased through availability of local power generation. In this paper the definition and potential of DG in Estonia is estimated and the optimal operation criteria are examined. The possible effect of DG development on electricity price and emissions is assessed using LEAP software.
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