(micro) gas turbine, a heat pump, or a fuel cell. Energy can be produced from solar (electric or thermal), geothermal, wind, natural gas, and methane resources. Second-generation distributed energy systems are characterized by five features: many possible fuel sources; small or micro equipment; combined cooling, heating, and power (CCHP) generation; intelligent management; and a high standard of environmental protection. Distributed energy systems are not likely to replace traditional energy systems. However, when combined with traditional systems, they can make overall systems more efficient and more robust.

Although distributed energy technologies are still in their infancy, they have numerous advantages over traditional energy technologies: reduced emissions; increased efficiency; flexibility; improved safety; and load balance.

Because distributed energy systems use renewable energy sources and gas turbine engines with extremely efficient combustion chamber technology, emissions of nitrogen oxides (NO_x) can be reduced to less than 25 parts per million (ppm). Emissions of carbon dioxide (CO₂), sulfide, and dust can also be reduced significantly compared with emissions from large thermal power plants.

CCHP systems are small scale and flexible. These systems can effectively integrate electricity, heating, and cooling requirements, supply enough energy to meet demand without waste, and eliminate the need to transmit cooling and heating energy over long distances. The efficiency of a distributed energy system can be higher than 75 percent.

Because the overall capacity of a CCHP system is relatively small, and because start-up, shutdown, and regulatory requirements can be met quickly, a distributed system can operate automatically, without personnel on duty, and operation is flexible and easy.

As recent power blackouts have shown, the traditional electricity grid is still heavily dependent on a stable exterior environment, and the political and economical effects of damage to transmission lines are becoming more and more