The World Alliance for Decentralized Energy (WADE) runs a website on decentralized energy, called localpower.org. It has a strong educational element, and shows the benefits of producing energy locally, rather than in central power plants.
“Centralized power plants waste huge amounts of energy because their heat output cannot be used locally. Efficiency of the US electricity system, for example, is even lower today than in the early 20th century, and far below its potential.”
The Sankey diagram shown on the website (full size image) illustrates the losses of centralized power generation and is explained as follows:
The large red arrow represents energy from all fuels wasted in the form of waste heat. Capturing waste heat then clearly represents the largest source of potential for efficiency improvement. (…)
The smaller red arrows represent power consumed by the power plants themselves and the power lost during transmission and distribution respectively. The yellow arrows represent the actual useful energy derived from the original fuel inputs – about a third of the actual energy society should be aiming to use.
I won’t be going into the pros and cons of decentralized energy or centralized power, but rather highlight the good and the weak points of how Sankey diagrams are presented: This Sankey diagram doesn’t show any units, a fact that makes it susceptible to criticism. The insterstices in the green area on the left, meant to be separation lines, are somewhat strange (they make me think of an ancient Mayan comb), and do of course conflict with the idea of maintaining arrow width to scale. Lastly, the large arrow heads on the right side overdo the real width, underpinning the statement that a large portion of energy is being lost.