TODAY’S STUDY: Getting The System Ready For Distributed Energy

Improving Distribution System Planning To Incorporate Distributed Energy Resources

Dave Gahl, Brandon Smithwood, Rick Umoff, July 2017 (Solar Energy Industries Association)

Executive Summary

Built during the last century, the United States electric grid was primarily designed to transport electricity from large central station power plants to end-use customers. But with rapid growth of distributed energy resources, such as solar, resulting from falling costs and technological advances, customers are increasingly taking charge of their own energy. These resources offer the promise of a more innovative, economic, and cleaner electric grid.

This is a future in which distributed energy resources (DERs), such as solar power, will play an important role providing power and grid services where they are needed most. To reach this goal, however, distribution grid planning must evolve from a largely closed process (a “black box”) to one which allows transparency into system needs, plans for distributed energy resources growth, and ensures that the capabilities of distributed energy resources are fully utilized.

This paper is the second in SEIA's series on grid modernization and focuses on distribution planning and operations, which is foundational to various facets of grid modernization. We start by reviewing the utility distribution system planning process today and identify key processes and concepts. Next, we discuss how two leading states are attempting to modernize distribution planning to both plan for distributed energy resources as well as leverage their capabilities.

click to enlarge

Opening The Black Box: Understanding The Current Practice Of Distribution Planning & Operations

Distribution system planning is the process utilities undertake to evaluate their system needs based on forecasting demand, anticipating load shapes, and considering the tools available to them to meet system needs. The process includes two overlapping cycles: a multi-year review and funding cycle in utility general rate cases before a public utilities commission, and an annual planning process undertaken by utility distribution engineers. The former is an arcane regulatory process with some outside input from intervening parties, and the latter has been the sole purview of the utility.

Utilities upgrade their distribution grids based on forecast loads and replacement of aging equipment. Utilities annually review their distribution systems against load forecasts to identify areas where distribution system functioning may be challenged by new loads. They also use an ongoing asset management process to ensure that equipment, such as wooden poles, capacitor banks, and transformers, are replaced as they reach the end of their useful lives.

As part of the planning process, utilities evaluate whether an issue can be addressed by reconfiguring their distribution system. This reconfiguration involves shifting load through switches in the distribution system, moving load served by a substation and feeder to another feeder potentially served by another substation. If reconfiguration is insufficient to address the forecast need, the utility will plan investments in new infrastructure, such as substation upgrades, replacement of capacitor banks, or reconductoring of a feeder. Over the course of an annual planning cycle some investment needs will fall away while others will emerge as new system conditions arise.

With the advent of distributed energy resources, the basic tenets of this process remain intact. However, customers are not simply passive loads. Rather they increasingly have distributed energy resources. Where customers adopt these resources and how they are operated could mean substantially different utility needs in specific locations of the distribution grid over time. As distributed energy resources become more widespread distribution planning must move from simply planning, in a deterministic manner, based on forecast loads, to planning that is based on scenarios of distributed energy resource adoption and includes processes for guiding distributed energy resources to provide alternatives (“non-wire alternatives”) to traditional utility investments.

click to enlarge

Data Is Critical To Modernizing Distribution System Planning…Improvements In Distribution Planning Underpins New Methods Of Valuation And Tools For Interconnction…Leading State Efforts To Reform Utility Distribution Planning…

Conclusion

Utility distribution planning has begun to move from a focus on meeting passive loads to anticipating distributed energy resources, both in terms of how many DERs can be expected on the system and where these resources are likely to be located. To benefit ratepayers and unlock the full value of a modernized grid, updated distribution planning must leverage DERs, such as solar, to meet distribution needs where they may have traditionally used utility installed, owned, and operated equipment. Some states are leading the way toward reforming distribution planning, but much more work must be done. A key for regulators will be to guard against over-investment by utilities under the rationale of enabling distributed energy resources in the marketplace. Distribution planning done correctly will create opportunities for solar firms and other distributed energy resources, better value for customers, and help state’s meet their energy and economic development goals.

Tweet