Distributed energy is not a new idea. However, advances in technology and rising awareness of major sustainability challenges are creating new opportunities. At one end of the spectrum, distributed energy refers to small and medium scale technologies that generate electricity (and heat). The term is often used to describe energy generated by units that are close to the location of use (either independent of, or connected to, ‘the grid’). On the other hand, distributed energy can be understood more as a structural transformation of grid-connected energy systems away from highly centralised technologies towards distributed and diversified systems relying far more on renewable energy sources. This has implications for both production and consumption of energy. The purpose of this short report is to review the current status of (and expectations for) distributed energy in the EU and the USA, as well as to highlight the opportunities and challenges for a large expansion of distributed energy in the near future.