TODAY’S STUDY: HOW TO GET A LOT OF NEW ENERGY ON THE GRID

Integrated Distribution Planning Concept Paper; A Proactive Approach for Accommodating High Penetrations of Distributed Generation Resources

Tim Lindl, Kevin Fox, Abraham Ellis and Robert Broderick, May 2013 (Sandia National Laboratories)

Planning For High Penetrations

In many parts of the country, legislative and regulatory promotion of renewable generation at the distribution-level (“distributed generation” or “DG”) has significantly expanded the installed capacity of DG interconnected to utility distribution systems. It has also greatly increased requests to interconnect DG. In areas with the most robust DG growth, applications to interconnect new generation, particularly solar photovoltaic (PV) generation, have overwhelmed utility interconnection processes and caused project delays and, in some cases, prohibitive cost increases. In areas where DG penetration (installed DG capacity relative to customer load) is already high, these delays and increased costs have slowed DG growth and resulted in public criticism of utilities’ interconnection processes.

A well-designed interconnection process can contribute significantly to facilitating DG growth. Interconnection processes aim to satisfy the dual objectives of allowing utilities to maintain electric power system safety, reliability and power quality while also providing a transparent, efficient and cost-effective path to interconnect a generator on a predictable timeframe. To balance these objectives, interconnection processes often use penetration-based screening that increases the level of technical review as the DG penetration level on a circuit increases.

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Penetration-based screening is broadly used in the United States to quickly review DG interconnection requests at lower penetrations, particularly penetrations below 15 percent of customer peak load on a distribution circuit. However, at higher penetrations there is a lack of consensus on how much review is necessary. One approach that has been recently adopted in California and Hawaii is to roughly divide generators on the basis of whether their capacity may exceed 100 percent of minimum customer load on a distribution feeder. A utility will have broad discretion in these states to assess potential impacts to safety, reliability and power quality both above and below this threshold, but below the threshold, it will have less time to assess potential impacts. The Federal Energy Regulatory Commission (FERC) recently issued a Notice of Proposed Rulemaking (NOPR) that would revise the federal Small Generator Interconnection Procedures (SGIP) to mirror the approach used in California and Hawaii.1

One recently released study from the National Renewable Energy Laboratory (NREL), and another study from NREL, the U.S. Department of Energy (DOE), Sandia National Laboratories (Sandia) and the Electric Power Research Institute (EPRI) also support this approach.2

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The California and Hawaii processes improve the timeliness, transparency, and cost-effectiveness of interconnecting a generator at higher penetrations, but the processes are still largely reactive, waiting for an application to interconnect a generator before potential impacts to safety, reliability and power quality may be assessed. The reactive nature of this approach means that the hosting capacity of a distribution circuit (the ability to accommodate new DG without upgrading the circuit) is determined after an interconnection request is received, if it is determined at all.

To better facilitate interconnection of high penetrations of DG, some utilities are beginning to consider approaches to proactively study distribution circuits in an effort to determine—in advance—their hosting capacities. These approaches generally use a two-step process.

The first step utilizes modeling to determine the ability of distribution circuits to host DG. The second step leverages existing distribution system planning efforts to anticipate DG growth. Where anticipated growth exceeds a distribution circuit’s hosting capacity, the utility can identify additional infrastructure that may be necessary to accommodate the anticipated growth. The results of a proactive study inform the processing of subsequent interconnection requests by estimating in advance the level of DG that can be accommodated without impacts. At higher penetration levels, a utility will have foreknowledge of the upgrades that may be required to ensure maintenance of safety, reliability and power quality standards.

This paper discusses proactive planning efforts that are being contemplated or implemented by utilities across the United States. Drawing upon these efforts, this paper proposes an Integrated Distribution Planning (IDP) approach to proactive planning for DG growth. IDP leverages existing tools from distribution system planning to estimate the hosting capacity of distribution circuits in advance of a utility studying a particular interconnection request. IDP also analyzes a circuit’s ability to accommodate anticipated DG growth and identifies any potential infrastructure upgrades needed to accommodate that growth.

In addition to introducing the concept of IDP, this paper discusses the ways in which IDP can increase the efficiency and cost-effectiveness of interconnecting DG at high penetrations while maintaining the safety, reliability and power quality of utility distribution systems. It also discusses potential implementation issues. One such issue is cost allocation; specifically, how to allocate the cost of distribution upgrades between generators and possibly even between generators and ratepayers. While we recongize this is an important consideration, cost allocation requires a more thorough examination than would be allowed in this introductory concept paper. Accordingly, we only provide some broad comments on the issue in this paper and hope to address it in further detail in a follow-up paper.

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Rising Penetrations Strain Utility Resources

The success of policies promoting PV resources has caused a high volume of interconnection requests from both small and large PV projects for many utilities. In 2005, utilities and developers installed only 79 Megawatts (MW) of grid-connected PV capacity across the United States. Six years later, the grid-connected solar PV capacity installed in just one year totaled 1,856 MW, over 23 times the cumulative amount installed just six years earlier and more than double the capacity that had been installed the prior year. Annual grid-connected PV capacity almost doubled again in 2012 to 3,153 MW (see figure 2 below), which brought the grid-connected PV capacity in the United States to 7,000 MW by the end of that year. That is a 4000-percent increase in 7 years.

In 2011, the nation’s most PV-active utilities integrated almost 1,500 MW-ac of new solar capacity, the equivalent of six natural gas power plants. Solar Electric Power Association’s (SEPA) 2011 Utility Solar Rankings Report describes the incredible undertaking that interconnecting all of these new generators can mean, particularly for utilities in states with the highest penetrations of solar:

Utilities are adapting to solar as their fastest growing electricity source. In 2011, utilities interconnected over 62,500 PV systems, 89% of which were residential homes, and which was a 38% growth over 2010. Thirteen utilities interconnected more than 1,000 PV systems and 22 interconnected more than 500 systems. To put this in perspective, about 350 non-solar power plants (> 1 MW) were expected across the entire U.S. in 2011. This annual volume of smaller, distributed solar interconnections is unlike anything the utility industry has previously managed, and conservative forecasts indicate that this number will grow to more than 150,000 interconnections in 2015.

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This increase in interconnection requests has resulted in higher PV penetrations on many utility distribution systems. Continued robust growth in PV markets will inevitably result in more areas with high penetrations of PV resources. Although most utilities do not publish information about penetration levels on their distribution feeders, several regions of the country are clearly experiencing high penetrations due to the sheer volume and concentration of DG that has interconnected or is requesting interconnection. In Hawaii, for example, 20 percent of the distribution circuits are already above 15 percent of peak load, a common benchmark for high penetration.

It is also clear that these high-penetration solar regions have expanded beyond just California and Hawaii, and are now moving into Eastern states. In 2008, 93 percent of the nation’s total annual solar capacity was installed in the Western region. By 2011, however, Western states held only 61 percent of the nation’s annual installed solar capacity, and only two California utilities were among the top ten for Cumulative Solar Watts-per-Customer (see figure 3). Pepco, Inc., (Pepco) the parent company of Atlantic City Electric, the utility for many parts of southern New Jersey, has closed five of its distribution circuits to new generation because the circuits have reached operating voltage limits on account of high penetration.

As penetration levels rise, the need to take a closer look at the impacts of these generators, in the form of detailed interconnection studies, also rises. A detailed study frequently requires an upfront fee, can take months to complete, and can result in high upgrade costs.11 In addition, waiting for a study to be completed can cause delay for other applicants that may be seeking to interconnect to the same circuit but have to wait for the prior applicant to complete the process before they can move forward.

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Members of the solar industry have identified the increased need for detailed studies as a market barrier to future development.12 As penetration levels increase, the combination of study costs, uncertainty, delays and upgrade costs can undermine otherwise positive project economics, especially for small projects. In localized areas, the cost of a large upgrade, such as replacing the conductors on a distribution feeder, can prove so burdensome for a single project, or group of projects, that neither the project nor the upgrade is completed. The problem is accentuated in areas with serial interconnection queues, where a large upgrade not only deters the current project but also those projects behind it in the queue. The result is an interconnection upgrade bottleneck in high-penetration areas of the distribution system that eventually stymies DG development.

It is easy to understand the challenges that arise for the solar industry from the combination of increasing interconnection requests and more detailed studies. Less obvious are the difficulties that arise for utilities. Detailed studies can deplete utility resources as interconnection queues outpace the utility’s ability to process requests. Even in places where group study processes allow for the concurrent interconnection of large numbers of projects, detailed studies can overwhelm utility resources and require the use of outside consultants, which can increase interconnection timelines due to the additional time for information exchange between the consultant and the utility.13 Timelines for studies performed by external engineers are also dependent on those engineers’ availability, and delays can result.

Utilities have recently become the target of public criticism where interconnection processes have been unable to keep pace with customers’ choices to install DG. A recent article in Businessweek calls a common penetration screen, the 15 percent of peak load screen, a market obstacle for solar energy in the United States.15 Another example is a resolution passed by the County of Hawaii, the governing body of the island that shares the State’s name.16 The resolution encourages the Hawaii Public Utilities Commission to change Hawaii Electric Light Company’s (HELCO’s) existing interconnection process to allow higher levels of penetration before detailed study is required.17 The Hawaii resolution and Businessweek article demonstrate how, in high penetration areas, the public has become critical of interconnection processes that appear to limit customers’ ability to install DG…

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Conclusion

The success of programs to encourage distribution-level resources is quickly overwhelming existing utility interconnection procedures. The proactive modeling and planning approaches within IDP leverage existing tools to allow utilities flexibility and foresight in accommodating high penetrations. As the amount of DG on distribution circuits increases, IDP allows utilities to continue to apply technically rigorous interconnection screens without sacrificing efficiency, transparency and economy.

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