The series of different conditions (technical, economical, environmental and political) influencing the power systems worldwide has made that nowadays most of the development in the area of electricity generation relates to the so called distributed electricity sources. Distributed generation means utilization of small (from tens of kW to tens of MW), modular power generating technologies dispersed throughout a utility's distribution system in order to provide power closer to customers, thereby improving power reliability and quality and deferring transmission and distribution upgrading. This definition is not a common one since the concept of distributed generation is perceived differently depending on the countries. Power generation technologies employed in distributed sources include: * internal combustion engines, * gas turbines, * combined heat and power plants based on gas turbines or internal combustion engines, * fuel cells, * photovoltaic systems, * wind turbines, * geothermal technology, * small hydro power plants, * biomass technology, Also in Poland new legal framework relating to the power sector and its commitments in the area of environment protection cause, that in the coming years we can expect development of some of the above mentioned sources, and especially cogeneration plants based mainly on gas turbines from tens of kW to tens of MW. The current development status of distributed generation in the world is presented in the paper, with a special emphasis on the cogeneration technologies. The possible new challenges, which can emerge simul- taneously with the possible fast development of distributed generation are also indicated in the paper.