As a result of economies of scale in fossil fuel and nuclear plants, power generation has long been a largely centralised process, with power generated at large plants some distance from the population they are serving.

However volatile markets and a changing investment climate has inhibited recent construction of such large centralised generation plants. Whilst centralised generation is likely to continue to be the predominant form of generation in the near future, decentralised generation is becoming increasingly popular.

Decentralised generation using renewable energy has many benefits over conventional fossil fuel plants, including a number of environmental advantages. See the Decentralised energy section for further information.