To help California reach its renewable portfolio standard goals, The California Independent System Operator (the ISO) may be aggravating a rivalry between large- and small-scale renewable energy producers.
The Small Generator Interconnection Procedure (SGIP), the ISO's proposed rules governing grid connection for five megawatt to twenty megawatt projects, is now at the formal proposal stage. It has stirred up a controversy because the ISO wants to include small generation into the newly revised process by which it evaluates larger systems.
The ISO achieved a significant streamlining of interconnections for large projects -- with a single fundamental shift. Instead of considering each project application individually, it began announcing an application deadline for projects of a given type and then considering them in clusters.
"Today's influx of renewable projects makes that serial study process unworkable," ISO spokesman Gregg Fishman said of the ISO's earlier method of studying applications one by one, "because each subsequent new project, or change to existing projects, requires us to begin the study process all over again for projects that are already in the queue."
The cluster study approach for smaller generation will "shorten the actual time it takes to complete the study," Fishman said. "We have seen this work in the large generator process."
Fishman said the cluster study approach also solves another interconnection problem in favor of small developers. "By applying the window for new projects proposals to both large and small projects, we remove any incentive there might have been for large projects to split into many smaller ones."
Ted Ko, Associate Executive Director of the FiT Coalition, thinks the ISO's approach may hold back small-scale developers. The Coalition is emerging as a spokesman for small developers because it advocates a California feed-in tariff (FIT) for projects in the five-to-twenty-megawatt range similar to the one that created the unprecedented expansion of renewables in Europe.
"One of the fundamental things that we have an issue with," Ko said, "is they don't seem to truly acknowledge the difference between what it takes to do a small project and what it takes to do a big project." Small developers, Ko explained, "do things in a different order. And the issues are different than for the larger projects. That's why we don't think they should all be mixed into one process."
Ko thinks the ISO's proposal puts an undue burden on small developers. "Some of the fees and security deposits may be different," Ko said of the ISO's proposal, "but the procedures and the back-and-forth and the reports -- it's all the same," he said. "There's no longer an SGIP and an LGIP; it's just GIP."
The FiT Coalition and other backers of small projects want the ISO to slow down. "In the early part of this year, Cal ISO had many informal conversations out of the public eye with developers -- we don't know who they were -- and then they came out with a proposal, a solution," Ko said. "A lot of the feedback we've been getting from talking to smaller developers is that it looks like it's going to be worse and take longer -- up to two years or more to get an interconnection procedure done. You're pretty much going to kill a whole lot of projects."
The ISO's proposal also seems to be aggravating infighting that has been growing between large and small developers over things like which size projects are the best way to achieve California's renewables standard and whether a feed-in tariff will be an effective tool. California's goal is to get 20 percent of its power from "new" renewables (non-big hydro) by 2010, which it will hit through permitted extensions. A plan to expand the goal to 33 percent by 2020 missed a deadline but may come back.
The Center for Energy Efficiency and Renewable Technologies (CEERT), a long-time renewables champion, backs the small producers' call for more transparency. "CEERT would like to request that a formal reporting system be implemented," it said in public comments.
There were even more aggressive criticisms from neutral commentators.
"The lack of location-specific data and updated information to enable the development of a robust and competitive wholesale generation market is still a problem," the California Energy Commission (CEC) said in its public comments.
The California Public Utilities Commission (CPUC) went further. "CPUC staff trusts that the ultimate purpose of revising the GIP rule is to accommodate more generators connecting to the grid faster, which will help the investor owned utilities (IOUs) meet the State's Renewables Portfolio Standard (RPS) goals," it said. But "the proposal should do more to help accommodate small generators," it went on. "CPUC staff supports the CAISO's proposal to study projects regardless of size through a cluster study, but does not support the proposal to study all distribution and transmission level interconnections in one cluster," it said. "There should be one cluster for distribution level interconnections, and another cluster for transmission level interconnections."
The most significant criticism of the ISO proposal may be that of the Interstate Renewable Energy Council (IREC), whose annual report on U.S. interconnection has become the topic's de facto report card.
"IREC does not support the proposal in its current form," it wrote. "CAISO Staff has moved expeditiously," IREC acknowledged. "IREC agrees with CAISO Staff that SGIP reform is necessary." But, IREC said, "more stakeholder input is needed" because SGIP was developed to allow small generators with limited grid impacts to proceed faster to interconnection," whereas the ISO's proposal "will substantially increase the time, cost and complexity of interconnecting a small generator."