TODAY’S STUDY: INTEGRATED DISTRIBUTION PLANNING – MEETING GRID NEEDS WITH DISTRIBUTED ENERGY RESOURCES

Integrated Distribution Planning; A holistic approach to meeting grid needs and expanding customer choice by unlocking the benefits of distributed energy resources

Ryan Hanley, August 2015 (SolarCity)

Key takeaways

Takeaway 1

Integrated Distribution Planning is a holistic approach to meeting distribution needs and expanding customer choice by modernizing utility interconnection, planning, procurement, and data sharing processes.

Takeaway 2

Hosting Capacity analyses should be incorporated into the interconnection of distributed energy resources to streamline and eventually automate interconnection

Takeaway 3

Adopting Distribution Loading Order policies will encourage the procurement of cost effective distributed energy resources before conventional distribution equipment

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Background

Designing the electrical grid for the 21st century is one of today’s most important and exciting challenges. In the face of evolving electricity needs and an aging electrical grid that relies on centralized and polluting sources of power, it is imperative to transition to a grid that actively leverages the wave of renewable distributed energy resources proliferating across the industry. Distributed energy resources offer tremendous benefits to this new grid by actively engaging customers in their energy management, increasing the use of clean renewable energy, improving grid resiliency, and making the grid more affordable by reducing system costs. Designing a grid that fully harnesses these assets is a key undertaking for all industry stakeholders, including utilities, regulators, legislatures, and DER developers.

Current efforts to utilize DERs to support the broader electric system, however, are hampered by the systemic failure of the industry to integrate DERs into distribution planning efforts. As the figure to the right depicts, traditional distribution planning is highly siloed and planning efforts are considered independently of interconnection efforts. To fully leverage DERs to benefit the grid, utility interconnection, planning, procurement, and data sharing efforts must be modernized.

Challenge: Existing utility interconnection, planning, procurement, and data sharing processes do not leverage DERs to benefit the grid and enable customer choice.

Solution: Modernize distribution interconnection, planning, procurement and data sharing processes by adopting a holistic Integration Distribution Planning framework.

Integrated Distribution Planning is a holistic approach to meeting distribution needs and expanding customer choice by unlocking the benefits of distributed energy resources. The approach expedites DER interconnections, integrates DERs into grid planning, utilizes DER portfolios as procurement resources, and ensures broad access to critical data. Ultimately, the approach reduces overall system costs while increasing customer engagement. In the following paper, we introduce four components of Integrated Distribution Planning (Interconnection, Planning, Procurement and Data) and offer recommendations for how to seamlessly integrate distributed energy resources into the modernized process.

We offer this paper as an initial vision for a holistic process to leverage DERs to benefit the grid. However, there are many details to develop in order to realize this vision. SolarCity continues to work on developing these details for the concepts proposed in this paper, and we welcome collaboration with industry thought leaders to do so. Our ultimate goal is to help provide the concrete recommendations and justification needed by regulators, legislatures, utilities, DER providers, and industry stakeholders to create the impetus for change needed to transition to a cleaner, more affordable and resilient grid.

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Interconnection

The utility DER interconnection process consists of rules and requirements that govern the connection and operation of distributed energy resources within a utility’s electric grid.

Today’s utility interconnection processes often follow idiosyncratic rules and timelines that differ from utility to utility, suffer from a general lack of process automation, are subject to burdensome technical reviews or arbitrary requirements that slow or prevent DER interconnections. In many regions, the current interconnection process is not keeping pace with the local DER growth, threatening an inefficient backlog that will burden utilities until a more streamlined approach is adopted. As a result, customers who want to invest in energy infrastructure to play an active role in managing their energy usage are increasingly unable to expediently and cost effectively to do.

Some utilities have begun reforming their practices to create a more efficient interconnection process, with several existing “best practices” serving as a guide for the industry. Overall process improvements have been limited in scope, however, and the pace of change is measured. A more comprehensive set of enhancements is needed to streamline the interconnection process, eliminate unnecessary costs, and expand allowable interconnections.

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Challenge: Existing utility interconnection processes can be avoidably slow, include unwarranted costs, and unnecessarily limit DER interconnections.

Solution: Streamline the DER interconnection process, eliminate unwarranted costs, and expand allowable interconnection approvals. Streamline the Process

There are four critical steps in interconnecting a system to the grid: application, construction, inspection, and permission to operate (PTO). Utilities control the timeline for critical elements of this process. While many states establish timeline requirements for the initial utility application review, these targets frequently are not met. For example, a study by the National Renewable Energy Laboratory (NREL) found that most utilities routinely exceed time limits for application review by 37-58%. Similarly, EQ Research published findings showing that PTO timelines increased 68% from 2013 to 2014.

Several states have embarked on initiatives to update aspects of the interconnection process. While positive, these developments often focus on a few low-hanging fruit, such as the creation of an online portal to submit and track application review progress, rather than a more comprehensive set of improvements. Streamlining the entire interconnection process should be considered by utility engineering organizations and regulators, especially when many of these improvements have been individually implemented by various utilities across the country. A comprehensive set of best practices and recommendations are presented in the following table.

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Eliminate Unwarranted Costs

Many utilities worried about real and perceived impacts of DERs are specifying equipment upgrades to mitigate their concerns. However, these mitigations are often based on outdated standards or made without regard to the advanced capabilities of modern DERs, which can often preempt the concerns underlying the proposed mitigations. The result is that utilities are requiring overly conservative and often unnecessary upgrades as a condition of interconnection.

Sourced from SolarCity’s interconnection efforts across the United States, we identify below the most common utility mitigation requirements. Based on the latest body of technical research and standards available, as well as our own research into many of these topics in collaboration with utilities and national laboratories24 , we offer cost effective, safe and reliable alternatives to these upgrades when applicable, with the goal of reducing overall system costs to all customers.

Expand Allowable Approvals…High and Low DER penetrations…Planning…Procurement…

While DERs – or any grid resource – voluntarily responding to price signals may respond less consistently than an asset under direct utility control, utilities can quantify the expected availability of such assets. While perhaps a new concept in the distribution context, methodologies exist for assessing availability-based resources, such as Effective Load Carrying Capability (ELCC) and other probabilistic methods currently used in demand response programs.

Data Transparency and Access…

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Conclusion

Electricity demands across the world are growing, yet our outdated electrical grids rely on centralized, finite sources of power. Transitioning the grid to one that leverages the wave of distributed energy resources proliferating across the industry is imperative to meet this need. Distributed energy resources offer tremendous benefits in the form of lower system costs, improved grid resiliency, and increased use of clean energy. DERs empower customers to become active participants in their energy management and fuel job creation as we collectively modernize the grid for the 21st century.

Evolving utility interconnection and planning processes into a holistic and proactive Integrated Distribution Planning process is essential to unlocking the promise of distributed energy resources. We offer this paper as an initial vision for a holistic process to leverage DERs to benefit the grid. However, there are many details to develop in order to realize this vision. SolarCity continues to work on developing these details for the concepts proposed in this paper, and we welcome collaboration with industry thought leaders to do so. Our ultimate goal is to help provide the concrete recommendations and justification needed by regulators, legislatures, utilities, DER providers, and industry stakeholders to create the impetus for change needed to transition to a cleaner, more affordable and resilient grid.

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