Distributed Energy Resource Saturation: Page 4 of 7

Potential Remedies

Creating a sustainable 21st-century grid requires mixing and matching new data with emerging technologies. While many potential solutions are on the horizon, there is no silver bullet. The end solution will probably come from all of the stakeholders, each working to solve small pieces of the overall puzzle. When used in conjunction with rapidly advancing smart grid communications, this combined contribution will have a substantial impact on the overall problem of excessive DER congestion.

Better modeling can generate the data needed to identify weaker areas of the utility grid and incentivize solar DER development in the appropriate areas. R&D road maps should include allocations to understand new phenomena such as islanding, and IOUs and regulators should implement solutions to these problems in a reasonable and targeted manner. Smart inverters have the potential to provide the level of control that IOUs require to curtail and prevent overgeneration. Energy storage systems can provide customers with an unprecedented ability to control when and how their systems produce energy.

Proactive planning. Given the scale of the existing power system and the investment necessary for its modernization, the authors of the More Than Smart report argue that distribution planners should start by evaluating the existing system and developing a baseline model of its capabilities. Once this exercise is complete, distribution planners and reliability engineers can stress-test this baseline model against a set of future scenarios. By identifying capability gaps in this manner, stakeholders can determine the grid upgrades that provide the best return on investment.

The More Than Smart report explains: “Analysis today requires both the traditional power engineering analysis as well as an assessment of the random variability and power flows across a distribution system. Such an analysis would include real and reactive power flows under a variety of planned and unplanned situations across a distribution system, not just a single feeder. Evolution to a more network-centric model for a distribution system to enable bidirectional power flow underscores the need for a fundamental shift in planning analysis.”

To facilitate this shift, California Assembly Bill 327 calls on IOUs to develop distribution resource plans that identify optimal locations for DER deployment, as well as ways to optimize the value of these resources. As part of these efforts, IOUs and other stakeholders are participating in working groups, which More Than Smart is facilitating, to establish two new planning tools: locational net benefit analysis (LNBA) and integrated capacity analysis (ICA).

Laura Wang, project director for More Than Smart, explains: “We envision that the IOUs will use both tools [LNBA and ICA] to meet the objective of Assembly Bill 327, which asks IOUs to determine optimal DER locations on their distribution systems. Developing these tools is expected to be an iterative process. IOUs will continue learning from the implementation process, the working group will refine the methodology as smart inverters become standard, and the [California Public Utilities Commission (CPUC)] makes a final decision on how these tools should be used.”

One challenge to overcome is that there is no consensus on when and how to compensate solar DER producers for avoided costs. According to a February 1, 2017, CPUC memo: “[The LNBA Working Group emphasizes] that the LNBA addresses the narrow question of evaluating DERs in single locations against certain distribution upgrades that are already in IOU distribution system plans, and should not be construed as the advancement of a comprehensive, location-specific utility avoided–cost calculator that could be used to proactively identify high-value locations for DER deployment.”

The ultimate goal of the LNBA is to identify the locational value of DER, ideally at a granular level based on a model of the entire electrical system. While a lot of work remains to be done, the LNBA tool will one day determine how DERs are compensated in California. Whereas IOUs can currently react to power quality issues only after they become a problem, the LNBA will eventually allow IOUs to identify problem areas in advance and promote specific DER functionality in certain markets by setting a premium price for these services.

The ICA, meanwhile, is unlike any utility analysis ever attempted, and thus will undergo slow and methodical development. At the conclusion of this process, the ICA will provide each IOU with the ability to quickly study any part of its grid and will allow stakeholders to swiftly assess a proposed interconnection location. The first objective is to identify how much DER generation developers can add at any interconnection point on the distribution system. The second is to bring DER generation into utilities’ annual planning of the distribution system by identifying the best sites for future DER development.

These analyses represent a paradigm shift in the way IOUs view distributed generation, as they will transform solar DER projects from a liability to an asset on heavily congested portions of the utility grid. The LNBA will ultimately determine future NEM rates. The ICA will transform a reactive interconnection process—wherein developers are subject to the long review time lines in the Rule 21 tariff—into a proactive process. Gone will be the days of waiting for months only to find out that your proposed system location is on the worst possible distribution line in an IOU’s service territory.

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