The term parallel generation is used for generation of electricity through alternative resources by the industrial or residential communities as a source of main supply or as a backup to the national grid.
The term is coined for two parallel systems of power generation; one, the electricity supplying companies, and other, communities or industrial sector.
In parallel generation, if it is a backup, the consumers stay connected to the national grid and whenever there is electricity shortage, they switch to use electricity through their own resources. The method has been allowed by the governments since electricity supplying companies are unable to meet growing demand for energy consumption. It also allows consumers to avoid load-shedding and have their own backup plans.
Nowadays, parallel power generation has also been allowed to promote green energy resources. For example, communities can use solar energy resources as main or supporting source of electricity supply. This can be still connected to the national grid or even disconnected. Some governments even offer incentives to promote green electricity.
The industrial sector has been particularly active in power generation in parallel to national grid. The production based industries in countries where energy consumption is greater than supply have backup electricity plans to keep their production lines running, since they have to meet the product delivery deadline strictly. Sometimes, if the electricity generation capacity is higher than the industry demand, they can contribute the electricity in the national grid.
In certain cases, where the government has to bear burden of fuel imports -- for example, import of crude oil, if it is used to generate electricity -- the government discourages parallel generation or has some sort of levy imposed on the production. The industry has to contribute to some extent to national grid either through supply of the electricity or through payment of taxes.