We are all familiar with the importance of proactive public planning. Take the road network, for instance. Every day, hundreds of thousands of people commute into and out of cities, relying on well-placed and adequately sized roads to get them where they want to go. To keep traffic flowing, road planners must anticipate the number of commuters, their intended destinations, and the needs for road maintenance, new construction and alternative resources like public transit.
But we know what happens if the number of commuters ticks up without the infrastructure to accommodate them: honking horns, missed meetings and late school pickups as a result of long and frustrating traffic jams.
Unfortunately, just this sort of planning deficit is hindering the ability of utilities, states and energy providers around the country to accommodate the increasing numbers of generators and other distributed energy resources vying for access to the grid.
The penetration of distributed generation, particularly solar photovoltaics, has increased at an astounding rate since the early 2000s. In 2005, utilities and developers installed only 79 megawatts of grid-connected solar capacity across the U.S. By 2013, the capacity of annual grid-connected solar installations grew to 4,600 megawatts, more than 58 times the cumulative amount installed just eight years earlier. Total U.S. solar capacity at the end of 2013 had exceeded 12,000 megawatts, up from less than 100 total megawatts a decade before.
This success story has brought new challenges for utilities and regulators, particularly with respect to interconnection. Utilities evaluate each project, large and small, looking to interconnect to the grid to make sure that it can be accommodated without causing reliability, power quality, or other negative impacts. This individualized, reactive process costs both time and money. In addition, the first generator to trigger a system upgrade is typically forced to bear that upgrade’s entire cost, even though its benefits may be shared by other generators and consumers.
As explained in an earlier blog post on cost allocation, in states like Hawaii with the most robust growth in distributed generation projects like rooftop solar, the number of applicants seeking to interconnect to the grid can overwhelm the system, resulting in long interconnection queues, and even in circuits being effectively “closed” to new rooftop solar applicants.
The good news is that with proper planning, this gridlock can be avoided. This is where the concept of integrated distribution planning comes in. IDP offers a pathway forward for states to overcome major interconnection challenges, including closed circuits, that are hindering the integration of renewables. The IDP approach relies on a multi-step process to proactively plan for the integration of distributed energy resources, or DERs, into the grid. It requires establishing the maximum capacity of a distribution circuit to accommodate DERs in its current state, without upgrades -- called the “hosting capacity” -- as well as forecasting the expected growth of distributed generation and potentially other DERs on that circuit.
By combining these elements, a utility can plan for upgrades in advance if needed to accommodate forecasted increases in projects looking to interconnect, or potentially identify instances where other DERs could address the expected impacts. Utilities can also use this information to steer DERs like solar generation and energy storage to the grid locations where they can interconnect most seamlessly and provide the greatest benefit to the grid. And they can greenlight proposed projects that the grid can easily accommodate without expensive individualized study.
Five Steps of Integrated Distribution Planning
Other states are catching on, thanks in part to IREC’s thought-leading development of the IDP approach, based on the proposed “Proactive Approach” pioneered in Hawaii. California, New York and Minnesota have included some version of integrated distribution system planning as an essential element in their ongoing grid modernization proceedings. Massachusetts is also moving in this direction, with proceedings aimed at studying how to strategically and cost-effectively integrate DERs into the grid. And Maryland’s Public Utilities Commission included distribution system planning as a key topic in its request for public comments at the onset of that state’s grid modernization proceedings.
As states embrace proactive planning, they will need to grapple with the cost allocation questions discussed in our earlier blog post -- for instance, whether to allocate upgrade costs solely to DERs, potentially through a set fee, or to spread costs out among DERs and other ratepayers who benefit from those capital improvements.
In relation to interconnection, IDP offers a pathway beyond the fast-track screening and supplemental review processes used by many states as first steps to streamline the interconnection process. These states have recognized that performing detailed studies for each project looking to interconnect to the grid can be prohibitively costly and time-consuming for both applicants and utilities. To overcome this market barrier, most states use penetration and other technical screens as gatekeepers in the interconnection process, greenlighting projects that pass these screens to interconnect to the grid and sending projects that fail the screens into a separate queue for additional review.
In leading states like California, Massachusetts and Hawaii, if a project fails the initial, conservative screens, it goes into "supplemental review," during which the utility determines if the project will push aggregate generating capacity beyond 100 percent of minimum load, and applies other technical screens regarding power quality and reliability. If it passes, the project can interconnect without detailed study; otherwise, detailed study is required. More and more states, including Iowa, Illinois and Ohio, are adopting similar supplemental review processes, and supplemental review is also part of the Federal Energy Regulatory Commission's small generator interconnection procedures.
While fast-track and supplemental review have real cost- and time-saving benefits, they also have inherent limitations. In particular, penetration screens tend to be conservative and provide limited practical guidance regarding the actual ability of local distribution systems to accommodate a specific proposed generator at a specific point of interconnection. And even with supplemental review, the study process remains reactive, with utilities waiting until a project seeks to interconnect to the grid to determine the circuit’s capacity to accommodate new generation.
Ultimately, supplemental review is only an initial step toward a more fundamental rethinking of how interconnection processes should work in a world where customers are both energy consumers and producers, power increasingly flows in two directions, and customers and DER providers provide an array of services for the grid. Undertaking the sort of comprehensive planning that IDP envisions is the next step in moving toward a “plug-and-play” energy platform with high integration of renewables and other DERs and with greater customer choice.
Accurately and efficiently determining the hosting capacity of a circuit is key to realizing this sort of proactive planning, but it can be technically challenging. Fortunately there are resources in place for states to learn from. The Electric Power Resource Institute has been pioneering one methodology. California has undertaken the hard work of comparing a "streamlined" methodology, similar to EPRI’s, and a more accurate but computationally intensive “iterative” approach.
Pepco Holdings, Inc., the parent company of utilities in New Jersey, Delaware, Maryland and Washington, D.C., has also developed a hosting capacity analysis. And both Minnesota and New York are investigating the role that hosting capacity has to play in planning for the modern grid in those states. Much more remains to be done in developing hosting capacity analysis, and IREC is here to help. Stay tuned for the upcoming release of an IREC hosting capacity white paper.
In tandem with hosting capacity analysis, proactive planning for the grid of the future requires effective forecasting of all types of DERs. While generators like solar have historically gotten most of the attention in interconnection discussions, resources like energy storage technologies should begin to take center stage. In particular, planning for energy storage can help utilities defer expensive circuit upgrades and increase grid capacity to incorporate new renewable generators. But interconnecting energy storage devices also comes with some special considerations. Check back in on our next blog post to learn about some of the many benefits and unique challenges that come with interconnecting energy storage.
Erica McConnell is special counsel and Stephanie Safdi is an environmental law fellow with Shute, Mihaly and Weinberger LLP, attorneys for the Interstate Renewable Energy Council.