Electricity generation can be mainly divided into two main models: centralized power plants and distributed energy resources (DERs). Each model represents a different way of producing energy, with its own climate risks, operational traits, and effects on grid resilience and planning.
Centralized power plants are large facilities that generate electricity in large amounts and transmit it over long distances to consumers. These include coal-fired plants, natural gas combined-cycle plants, nuclear reactors, hydroelectric dams, and utility-scale solar or wind farms. Centralized plants benefit from economies of scale, advanced control systems, and the ability to deliver consistent baseload or dispatchable power. However, they also concentrate risk. A single failure, caused by flooding, heat stress, fuel shortages, or storm damage, can disrupt electricity for wide areas. Additionally, the dependence on long-distance transmission lines adds vulnerabilities to wildfires, ice, or severe wind events.
In contrast, distributed energy resources (DERs) are smaller-scale power generation or storage systems located closer to the point of consumption. These include rooftop solar panels, small wind turbines, residential batteries, combined heat and power (CHP) systems, microturbines, and community solar arrays. DERs are inherently more modular and flexible, enabling localized resilience during grid outages and reducing reliance on centralized infrastructure. Their proximity to end users can help avoid transmission losses and provide demand-side management benefits.
However, distributed systems face several challenges. Many are dependent on weather, experience intermittency, or lack regulation. Without adequate storage, smart controls, and grid integration, DERs can cause voltage fluctuations or supply instability. Additionally, distributed systems may be vulnerable to local climate impacts such as hailstorms, wind damage, or urban heat island effects.
As climate risks become more significant, the ideal energy system will not be solely centralized or distributed but a hybrid, integrated model that combines the advantages of both. Centralized assets offer large-scale reliability and dispatch capacity, while DERs enhance flexibility, community resilience, and adaptive capacity. Understanding the trade-offs and climate risks associated with each generation model is essential for building a secure, decarbonized, and climate-resilient power system.
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