Distributed Energy Resource Optimization
Inside this Article
The way that utilities study distributed energy resource interconnections in California is about to change dramatically. Depending on whom you ask, this has the potential to be a good thing — or a great thing.
At the beginning of a solar project, every customer or potential customer asks two fundamental questions: How much is the system going to cost? How long will it take to complete the project? To their credit, most solar developers do everything in their power to paint an accurate picture of interconnection costs and construction schedules. However, two major variables get in the way of that effort: the utility review and the interconnection timeline.
As I explained in a previous SolarPro article, “Distributed Energy Resource Saturation” (July/August 2017), the solar industry has no tool at its disposal to provide any real certainty surrounding the scope, cost and time frame of utility upgrades. The reality is that it could take 60 days or 2–3 years. The cost of the upgrades could be nothing or could be $2 million. The developer will not know for sure until completion of the utility interconnection study. These wide ranges of uncertainty do not help with financial planning, especially when a client is looking to secure financing for project development.
Here I elaborate on the distribution planning tools that stakeholders in California are developing to streamline distributed energy resource (DER) interconnections and proactively identify optimal locations for DER deployment. The days of anxiously waiting for the Rule 21 process to run its sometimes excruciatingly long course may soon become a thing of the past because of the keen foresight of California’s Distribution Resource Plan working group. It seeks to expedite review timelines based on proposed DER interconnection locations and establish a mechanism for assigning the real avoided utility-upgrade cost associated with these interconnections. For many solar industry stakeholders, the development of these new tools is very welcome news. Furthermore, the distribution resource plans developed in California will likely serve as models for future DER integration throughout the US—and perhaps even in other parts of the world.
Distribution Resource Planning in California
In October 2013, Gov. Jerry Brown signed Assembly Bill 327, the net metering and rate reform bill, into law in California. Section 8 established Public Utilities Code Section 769, which requires investor-owned utilities (IOUs) to develop distribution resource plans identifying optimal DER deployment locations. The California Public Utilities Commission (CPUC) initiated the process for these plans in August 2014 and issued a ruling in May 2016 establishing the Integration Capacity Analysis (ICA) and Locational Net Benefit Analysis (LNBA) working groups, comprised of stakeholders representing the IOUs, the DER industry and ratepayer advocacy groups. While there is synergy between the two working groups, they serve different functions with regard to streamlining and promoting DER integration. The goal of these efforts is to move from a reactive distribution planning process with minimal transparency and public involvement to a proactive integrated distribution planning process, as illustrated in Figure 1.
INTEGRATION CAPACITY ANALYSIS
As detailed in the final ICA working group report filed on March 15, 2017 (see Resources), there are two primary use cases for the ICA: “The first and most developed use case…is to improve interconnection, which includes a more automated and transparent interconnection process and the publication of data that helps customers design systems that do not exceed grid limitations. The second and currently less developed use case…is to utilize the ICA to inform distribution planning processes to help identify how to better integrate DERs onto the system.” The first use case is most relevant to solar industry stakeholders in the short term.
Intent. Interconnecting DER in California currently is a bit like playing Minesweeper on a PC from the early 1990s, which involves a fair amount of guesswork. You might pick a good square (interconnection location) and open up half the board, or you might hit a mine that ends the game (kills the project). The ICA working group seeks to transform this game of chance into a predictable process by identifying optimal locations for solar development and quantifying the available interconnection capacity well before submission of an interconnection application. Consider that it currently takes at least 110 business days to complete a detailed interconnection study under California’s Rule 21 engineering review process. The ICA process, in contrast, will effectively run a detailed study for every node of an IOU’s grid on a monthly basis.