biennial report on impacts of distributed generation · 12/19/2014 · the previous “impact of...

BIENNIAL REPORT ON IMPACTS OF DISTRIBUTED GENERATION Prepared in Compliance with AB 578 – With Data through 2011 and Selected 2012 Data

California Public Utilities Commission MAY 2013

FINAL REPORT

BIENNIAL REPORT ON IMPACTS OF DISTRIBUTED GENERATION

Prepared in Compliance with AB 578 – With Data through 2011 and Selected 2012 Data

B&V PROJECT NO. 176365

PREPARED FOR

California Public Utilities Commission

18 MARCH 2013

®

®

©Black & Veatch Holding Company 2012. A

ll rights reserved.

©Black & Veatch Holding Company 2013. A

ll rights reserved.

California Public Utilities Commission | BIENNIAL REPORT ON IMPACTS OF DISTRIBUTED GENERATION

BLACK & VEATCH | Table of Contents i

Table of Contents 1.0 ExecutiveSummary............................................................................................................................1‐1

1.1 Introduction...........................................................................................................................................1‐11.2 OverviewofDistributedGeneration............................................................................................1‐11.3 ImpactsofDGontheTransmissionandDistributionSystem...........................................1‐41.4 IssuesandBarriersImpactingDGDeployment......................................................................1‐81.5 EmergingTechnologies.....................................................................................................................1‐81.6 RecommendationsforFutureStudy............................................................................................1‐9

2.0 Introduction..........................................................................................................................................2‐12.1 Background............................................................................................................................................2‐12.2 DistributedGenerationPolicy........................................................................................................2‐22.3 ApproachandMethodology............................................................................................................2‐32.4 ReportOrganization...........................................................................................................................2‐3

3.0 DistributedGenerationOverview.................................................................................................3‐13.1 DescriptionofDGTechnologies.....................................................................................................3‐13.2 DGCurrentlyInstalledinCalifornia.............................................................................................3‐3

4.0 DGImpactsontheTransmissionandDistributionSystem.................................................4‐14.1 DistributionSystemReliabilityandOperation........................................................................4‐24.2 TransmissionSystemReliabilityandOperation.....................................................................4‐74.3 SizeandLocationDependentImpactofDG............................................................................4‐104.4 PeakDemandImpactAnalysis.....................................................................................................4‐12

5.0 IssuesandBarriersImpactingDGDeployment.......................................................................5‐15.1 FinancingandEconomics.................................................................................................................5‐35.2 PolicyandRegulatory........................................................................................................................5‐65.3 GridAccessandInterconnection.................................................................................................5‐125.4 Integration............................................................................................................................................5‐195.5 Miscellaneous......................................................................................................................................5‐215.6 KeyIssuesandBarriers...................................................................................................................5‐24

6.0 EmergingTechnologies.....................................................................................................................6‐16.1 SmartInverters.....................................................................................................................................6‐16.2 EnergyStorage......................................................................................................................................6‐36.3 AdvancedGridManagement/SmartGridTechnologies....................................................6‐66.4 Microgrids...............................................................................................................................................6‐8

7.0 RecommendationsforFutureStudy............................................................................................7‐1AppendixA. InstalledCapacityData.......................................................................................................A‐1AppendixB. PeakDemandImpactAnalysisMethodology..............................................................B‐1AppendixC. FutureDGStudy.....................................................................................................................C‐1AppendixD. January31,2013ReportPresentation,IncludingSelected2012Data

Updates...................................................................................................................................................D‐1


BLACK & VEATCH | Table of Contents ii

LIST OF TABLES Table1‐1 SummaryofCustomer‐SideDGInstalledinCaliforniabyTechnology(All

IncentivePrograms)through2011..............................................................................................1‐3Table1‐2 KeyRemainingIssuesandBarriersforCustomer‐sideDG................................................1‐8Table3‐1 DescriptionofPrevalentCustomer‐sideDGTechnologies*..............................................3‐2Table3‐2 SummaryofDGProgramCharacteristics..................................................................................3‐4Table3‐3 SummaryofCustomer‐SideDGInstalledinCaliforniabyTechnology(All

IncentivePrograms)through2011..............................................................................................3‐6Table3‐4 SummaryofCSIInstallationsbyProgramandUtility(AllSolarPV)...........................3‐10Table3‐5 SummaryofSGIPInstallationsbyTechnologyandUtility...............................................3‐11Table3‐6 SummaryofERPInstallationsbyTechnologyandUtility................................................3‐12Table3‐7 SummaryofNSHPInstallationsbyUtility...............................................................................3‐12Table3‐8 SummaryofSB1POUInstallationsbyUtility........................................................................3‐13Table3‐9 SummaryofNEMDGInstallationsbyTechnologyandUtility........................................3‐14Table3‐10 SummaryofNon‐NEMDGInstallationsbyTechnologyandUtility..............................3‐15Table3‐11 SummaryofFIT–AB1969InstallationsbyTechnology..................................................3‐16Table3‐12 SummaryofIOUSolarPVProgramInstallationsbyOwnership...................................3‐17Table4‐1 PeakDemandImpactbyTechnology........................................................................................4‐16Table5‐1 IssuesandBarriersImpactingDGDeployment......................................................................5‐2Table5‐2 NumberofInterconnectionApplicationsandAverageInterconnection

ApplicationProcessingTimesforCSIPVSystemsbyIOU................................................5‐15Table5‐3 KeyRemainingIssuesandBarriersforCustomer‐sideDG..............................................5‐25


BLACK & VEATCH | Table of Contents iii

LIST OF FIGURES Figure1‐1 GoalsforCalifornia'sActiveDGPrograms................................................................................1‐4Figure1‐2 OperatingDGCapacitybyProgram,andCAISODemand,onSeptember7th,

2011...........................................................................................................................................................1‐7Figure3‐1 GoalsforCalifornia'sActiveDGPrograms................................................................................3‐5Figure3‐2 CumulativeDGCapacityInstalledbyProgram........................................................................3‐7Figure3‐3 CumulativeDGCapacityInstalledbyTechnology..................................................................3‐8Figure3‐4 CumulativeNon‐SolarDGCapacityInstalledbyTechnology............................................3‐8Figure4‐1 TypicalElectricPowerSystemSingle‐LineDiagram............................................................4‐1Figure4‐2 SampleSolarResourceDataforOneDay..................................................................................4‐5Figure4‐3 SolarIrradianceVariability–OneLocationvs.25Locations..........................................4‐11Figure4‐4 ImpactofCustomer‐SideDGonCAISODemandonSeptember7th,2011................4‐13Figure4‐5 OperatingDGCapacitybyProgramandCAISODemandonSeptember7th,

2011.........................................................................................................................................................4‐14Figure4‐6 HourlyDGCapacityFactorsbyProgramandCAISODemandonSeptember

7th,2011................................................................................................................................................4‐15Figure4‐7 PeakDemandImpactofSolarPVonTypicalSCEResidentialDistribution

Feeder.....................................................................................................................................................4‐18Figure4‐8 PeakDemandImpactofSolarPVonTypicalSCENon‐Residential

DistributionFeeder...........................................................................................................................4‐19Figure5‐1 PercentageofPVSystemswithThird‐PartyOwnershipinCSI,2007‐2012...............5‐4Figure5‐2 SolarModulePricesfromDecember2001–March2012..................................................5‐5Figure5‐3 PG&EResidentialRateTierStructure(January2012)........................................................5‐8Figure5‐4 ExampleImpactofRateStructuresonSDG&ECustomerElectricBills........................5‐9Figure5‐5 AverageInterconnectionApplicationProcessingTimesforCSIPVSystems

byIOU.....................................................................................................................................................5‐16Figure5‐6 ExampleInterconnectionCapacityMappingToolfromPG&E.......................................5‐17Figure6‐1 EnergyStorageDischargeTimeandRatedPowerGraph...................................................6‐4Figure6‐2 PotentialApplicationsofEnergyStorage(Black&Veatch)...............................................6‐6Figure6‐3 EmergingSmartGridInfrastructureinSupportofHighPenetrationDGPV..............6‐7Figure6‐4 Re‐sectionalizationExample...........................................................................................................6‐8


BLACK & VEATCH | Table of Contents iv

LEGAL NOTICE ThisreportwaspreparedasanaccountofworksponsoredbytheCaliforniaPublicUtilitiesCommission.ItdoesnotnecessarilyrepresenttheviewsoftheCommissionoranyofitsemployeesexcepttotheextent,ifany,thatithasformallybeenapprovedbytheCommissionatapublicmeeting.Forinformationregardinganysuchaction,communicatedirectlywiththeCommissionat505VanNessAvenue,SanFrancisco,California94102.NeithertheCommissionnortheStateofCalifornia,noranyofficer,employee,oranyofitscontractorsorsubcontractorsmakesanywarranty,expressorimplied,orassumesanylegalliabilitywhatsoeverforthecontentsofthisdocument.

ACKNOWLEDGEMENTS TheauthorsofthisreportwouldliketoacknowledgethesignificantcontributionsmadetothisreportbyCPUCstaff(MeliciaCharles,JamesLoewen,HazelMiranda,NealReardonandRachelPeterson),andrepresentativesfromthethreeinvestor‐ownedutilities(PacificGasandElectric,SouthernCaliforniaEdison,andSanDiegoGas&Electric),andtheCaliforniaCenterforSustainableEnergy.


BLACK & VEATCH | Executive Summary 1‐1

1.0 Executive Summary ThisreportispreparedinresponsetoAssemblyBill(AB)578(Blakeslee,2008)whichrequirestheCaliforniaPublicUtilitiesCommission(CPUC)tosubmittothelegislatureabiennialreportontheimpactsofdistributedgeneration(DG)onCalifornia’stransmissionanddistribution(T&D)systems.Thisreportissummarizedinthesectionsbelow.

1.1 INTRODUCTION TheCPUCoverseesdistributedgenerationpoliciesandprogramsonboththecustomerandutility(wholesale)sideoftheelectricmeterwithintheserviceterritoriesofCalifornia’sinvestor‐ownedutilities.Thisreportisfocusedprimarilyontheimpactsandbarriersofcustomer‐sideDG,ratherthanwholesaledistributedgeneration.ManyimpactsandbarriersforwholesaleDGarealsoprevalentforcustomer‐sideDG.Whereappropriatethisreportdiscussesbothcustomer‐sideandwholesalesystems;however,unlessindicated,“DG”referstocustomer‐sidesystemsinthisreport.

Theprevious“ImpactofDistributedGeneration”report,preparedbyItron,Inc.,wasissuedinJanuaryof2010(2010Report).Forthisreport,anupdateofDGinstallationsresultingfromvariousCaliforniaprogramsisprovidedforcustomer‐sideDGinstallationsthroughtheendof2011.Selectedinformationinthisreporthasbeenupdatedthroughtheendof2012inAppendixD.Thereportalsocoversbrieflythevariousnewprogramsforwholesalegenerationthathavebeenimplementedsincethe2010Report.

Indevelopingthisreport,Black&Veatchreliedonseveralsourcesofinformation,including:

Gatheringandusingprimarydatafromexistingincentiveprograms

InterviewswithutilitydistributionengineersandprogrammanagersofCSIandSGIPprograms

RecentCSIandSGIPreportsandotherpublishedCPUCreportsonDG

Generalliteraturereviewofpaststudiesontheseissues

1.2 OVERVIEW OF DISTRIBUTED GENERATION GovernorBrownhasestablishedahigh‐levelgoalforCaliforniatoachieve12,000megawattsofrenewableDGby2020.Californiahashadahistoryofencouragingthedevelopmentofsmallergenerationfacilitiesthatconnecteddirectlyatthedistributionleveloftheelectricitysystem.DGgrowthhasbeenspurredbyseveralgovernment‐sponsoredincentiveprograms.TheCaliforniaEnergyCommission’sEmergingRenewablesProgram(ERP)wasfundedasaresultofAB1890,andprovidedsupporttoemergingrenewableprojectsonthecustomer‐sideofthemeter.TheCPUC’sSelf‐GenerationIncentiveProgram(SGIP),whichwasstartedinresponsetotheenergycrisisin2001,offeredincentivesforDGprojectslocatedatutilitycustomersites.TheSGIPprogramsupportedavarietyofdistributedgenerationtechnologiesincludingsolarphotovoltaic(PV),wind,fuelcells,andotherconventionaltechnologies.WhentheCaliforniaSolarInitiative(CSI)programandseveralrelatedprogramsbeganin2007asaresultofSenateBill(SB)1(Murray,2006),withagoalofpromoting3,000MWofdistributedsolarinthestate,supportforsolarPVtechnologieswasshiftedfromtheSGIPprogramtotheCSIprogram.

The2010ReportaddressedtheinstalledDGinCaliforniaundertheSGIPandCSIprogramsaswellasnetenergymetering(NEM)andnon‐NEMprojectsinterconnectedtothethreeinvestor‐owned



utilities(IOUs)throughSeptemberof2009.Sincethen,newprogramshavebeenlaunchedtopromotemoreDGinthestate;bothonthecustomersideofthemeterandonthewholesaleside,andinstallationshaveincreaseddramaticallyunderexistingprograms.Black&VeatchreviewedprogramdatatodeterminethetotalamountofDGthathasbeeninstalled.Theeightcustomer‐sideprogramsinclude:

CaliforniaSolarInitiative(CSI)

● GeneralMarket(GM)

● Multi‐familyAffordableSolarHousing(MASH)

● Single‐familyAffordableSolarHousing(SASH)

SB1Publicly‐OwnedUtility(POU)Programs

NewSolarHomesPartnership(NSHP)

Self‐GenerationIncentiveProgram(SGIP)

EmergingRenewablesProgram(ERP)–nolongeractiveasofJune2012

RenewableEnergySelf‐GenerationBillCreditTransfer(RES‐BCT)Program

NearlyallDGsystemsinstalledundertheseeightprogramsparticipateintheNEMtariff.EachIOUmaintainsaninterconnectiondatabasethattracksDGinstallationsontheNEMtariffandthosenotontheNEMtariff.BasedonthesedatabasesBlack&VeatchsummarizedtheamountofDGinstalledthroughoutthestateundertheNEMtariff(plusnon‐NEMDGinstallations)aswellastheDGinstallationsresultingfromthestate’swholesaleDGprograms.ItshouldbenotedthattheCPUChasrecentlyexpandedthestatewidevirtualnetmeteringtariffaswell,althoughthatprogramisnotdiscussedinthisreportastheexpansionofthatprogramwasnotyetcompleteatthetimethisstudybegan.ThewholesaleDGprogramsconsistof1:

Feed‐inTariff(FIT)

● AssemblyBill1969(AB1969)

● SenateBill32(SB32)

SolarPVPrograms(SPVP)

RenewablesAuctionMechanism(RAM)

Thetotalcustomer‐sideDGinstallationsthrough2011aresummarizedinTable1‐1belowbyutilityandtechnology.ThetotalamountinstalledundertheNEMtariff,inadditiontonon‐NEMDG,isapproximately1,580MW(thisisnotadditivetothecustomer‐sidetotalnotedinTable1‐1).ThetotalamountinstalledunderthewholesaleDGprogramsthrough2011is101MW.Thesenumbersareincreasingquickly.Asoftheendof2012,customer‐sideDGinstallationshadreachedatotalof1,785MW,andwholesaleDGinstallationshadreached177MW.2

Theprimaryfocusofthisreportistoevaluatetheimpactsofcustomer‐sideDGonthetransmissionanddistributionsystems.ManyimpactsandbarriersforwholesaleDGarealsoprevalentfor

1 In addition to these wholesale DG programs, AB 1613 established a FIT for efficient combined heat and power (CHP) systems. SB 1122 also established a FIT for 250 MW of bioenergy, which was signed into law September 27th, 2012. SB 1122 is planned to go into effect in 2013. Neither the AB 1613 program nor the SB 1122 programs were investigated in detail in this report. 2 Additional selected information for 2012 is provided in Appendix D.



customer‐sideDG.Whereappropriate,thisreportdiscussesbothcustomer‐sideandwholesalesystems;however,“DG”generallyreferstocustomer‐sideDGinthisreport.

Table 1‐1 Summary of Customer‐Side DG Installed in California by Technology (All Incentive Programs) through 2011

TECH‐NOLOGY

PG&E SCE SDG&E* SCG POU TOTAL

# MW # MW # MW # MW # MW # MW

SolarPV 57,069 558 26,897 297 13,482 111 264 14 10,360 110 108,072 1,090

Wind 253 7 369 5 35 0 5 0 0 0 662 12

RF** 52 19 23 9 12 7 14 9 0 0 101 44

Non‐RF*** 210 79 81 33 44 24 121 75 0 0 456 211

AES 1 1 0 0 0 0 0 0 0 0 1 1

Total 57,585 663 27,370 345 13,573 142 404 98 10,360 110 109,292 1,357

Thisinformationisthrough2011.Selecteddatahasbeenupdatedthrough2012andisprovidedinAppendixD.Notes:*CaliforniaCenterforSustainableEnergy(CCSE)istheCSIandSGIPprogramadministratorforSDG&E.**RenewableFuels(RF)includesbiomass,digestergas,andlandfillgas.***Non‐RenewableFuels(Non‐RF)includesnaturalgas,propanegas,wastegas,andanyinstallationsforwhichthefueltypeisnotspecified.AES=AdvancedEnergyStorage

AsshowninFigure1‐1below,thegoalsforCalifornia’scurrentlyactiveDGprogramstotalalmost6,000MW,abouthalfoftheGovernor’sstatedgoalof12,000MWby2020.3Notably,thetimeframeformostoftheseprogramsisbeforetheendof2016.About3,750MWofthe6,000MWisrestrictedtosolarPV.Abouthalfofthetotalisrestrictedtocustomer‐sidegenerationonly.

3 Note that additional DG outside these programs would likely be counted towards meeting the Governor’s goal, because the definition of “localized electricity generation” under the Governor’s goal may or may not fall under the definition of “DG” used in this report. Governor Brown’s goal is described at http://www.jerrybrown.org/jobs‐california%E2%80%99s‐future.



Figure 1‐1 Goals for California's Active DG Programs

1.3 IMPACTS OF DG ON THE TRANSMISSION AND DISTRIBUTION SYSTEM TheimpactsofDGonthedistributionandtransmissionsystemtodayarenotadequatelyquantified,butarebelievedtoberelativelylow.Thelackofobservedimpactscanbeattributedtoseveralreasons:

Currentlyabout90percentofconnectedDGcapacityisonthecustomer‐sideofthemeter

Customer‐sideDGsystemsaretypicallysmall

ThecurrentpenetrationlevelofDGislow

Atthegivenpenetrationlevels,theinterconnectionprocessandrequirementshavesuccessfullymitigatedimpactsbeforetheyoccur

ThereisagenerallackofmonitoringDGsystemoutput4andoftheeffectsofDGsystemsonthegrid(thatis,utilitiesdonothavetheappropriatetoolstosystematicallycollectandevaluatedataonproblemsorbenefitsattributabletoDG).

4 Currently, telemetering requirements are imposed only on DG systems 1 MW or larger. Smaller units do not have this requirement since at lower penetrations the expectation was that the impacts would be minimal, the cost to collect the data would be relatively high, and processing of this additional data may not be necessary. This

California Solar Initiative1,940 MW

New Solar Homes360 MW

Public Utility PV SB 1700 MW

Utility Solar PV Programs776 MW

Feed‐in Tariff750 MW

Renewable Auction Mechanism1,299 MW

0 MW

1,000 MW

2,000 MW

3,000 MW

4,000 MW

5,000 MW

6,000 MW

Program

Goals, M

W

System‐side (Wholesale)

Customer‐side

Open to All Renewables

Solar PV Only

+ SGIP (no MW Goal)



Forthesereasons,itisdifficulttoquantifytheimpactsofcustomer‐sideDGonthegrid.ItisexpectedbymanythatimpactswillincreaseasDGpenetrationincreases.However,tobeabletoquantifytheimpacts,theutilitieswillneedtobeginsystematicallymonitoring,evaluating,andassociatingsuchimpactswithDGsystems.

TheexpectedimpactswouldfirstoccuronthedistributionsystembecauseofthedirectconnectionofDGtothedistributionsystem.However,asthepenetrationofDGincreases,theimpactswillrolluptothetransmissionsystem.Whatmanyindustryobserversagreeonis“DGthatisatthe‘rightplaceattherighttime’willcreatethegreatestvalue,whileadditionalelectricitysupplyinthewrongplaceatthewrongtimecouldresultinaddedcoststothesystem,”asstatedinareportpublishedbyRockyMountainInstituteandPG&EinMarch2012.5However,itisdifficulttodevelopquantitativemeasuringandmonitoringprotocolstosystematicallygaugewhetherDGisbeingdeployedattherightplaceattherighttime,andtherehasbeennoeffortyetinCaliforniatodoso.

ImpactsofDGhavebeensplitintodistributionandtransmission.Belowisalistofimpacts,bothpositiveandnegative,thatDGcanhaveonthedistributionsystem,someofwhichhavealreadybeenobservedonIOUsystems.

Distributionsystemlinelosses

Peakdemandreduction

Deferreddistributionsystemupgrades

Frequencycontrol6

Voltageregulation

Reversepowerflow

Operationalflexibility

Todate,transmissionsystemimpactsduetoDGinstallationshavebeensmall.Theissueslistedbelowarelargelyanticipated,althoughsomehavebeenobservedontheIOUsystems.

Transmissionsystemlinelosses

Reversepowerflowfromthedistributionsystem

Operationalprocedures

Voltageregulation

Reliabilitycapacityandplanning

assumption should be revisited as penetration increases, or the operational requirements for DG change. For example, California utilities have recently proposed telemetering requirements for certain wholesale DG systems smaller than 1 MW that will export power to be aggregated and scheduled into CAISO’s market. As of this writing, the CPUC has not yet evaluated those proposals. 5 “Net Energy Metering, Zero Net Energy, and the Distributed Energy Resource Future: Adapting Electric Utility Business Models for the 21st Century,” Rocky Mountain Institute, Snowmass, CO, March 2012. 6 It should be noted that the frequency of the distribution system and transmission system is the same, and therefore impacts to frequency on the distribution system similarly affect the transmission system. For simplicity, the frequency control impact is listed and discussed under distribution system impacts here.



Capacitymargin

Systemstability

SizeandLocationImpactsThesizeandlocationofDGsystemsinrelationtothedistributionsystemdictatestheirimpactonthegrid.ThougheachdistributioncircuitisdifferentinitscapacitytoaccommodateDG,inmostcasesalargernumberofsmallDGsystemsspreadoverawideareawillhavelessnegativeimpactthanasmallernumberoflargeDGsystemsconcentratedinasinglearea.ThisisespeciallytrueforvariableresourceslikesolarPVandwind,whosevariabilityis“smoothedout”tosomeextentwhenaggregatingtheoutputofmanygeneratorsoverwidegeographicareas.

PeakDemandImpactsInadditiontoexaminingtheimpactsofDGonthetransmissionanddistributionsystems,Black&VeatchanalyzedtheimpactofDGonCAISOpeakdemand.InestimatingtheimpactofthetotalamountofinstalledDGcapacityoperatingontheCAISOgridduringthe2011peakdemandperiod,twoseparateapproachesweretakenforsolarPVandnon‐solarinstallations.TodeterminetheimpactofsolarPVcapacityduringthesystempeakdemand,Black&VeatchusedmetereddatafromalargesamplingofsolarPVsystems.Fornon‐solartechnologies,Black&Veatchuseddatafromthe“CPUCSelf‐GenerationIncentiveProgramEleventh‐YearImpactEvaluation”preparedbyItroninJune2012.

ThetotalamountofDGoperatingduringtheCAISOpeakdemandday(September7th,2011)isdisplayedinFigure1‐2,alongwithCAISOload.Duringthepeakdemandhourof4‐5pm,342MWofDGwereoperating,accountingfor0.7percentofCAISOload.OperatingDGpeakedduringthenoonhour(12‐1pm)at728MW,accountingfor1.8percentofCAISOloadatthattime.Overall,theimpactofDGonCAISOpeakloadissmall,andDGsolarPVpeaksmuchearlierinthedaythanCAISOdemand.AccordingtoBlack&Veatchestimates,DGsolarPVachievesanhourlycapacityfactorof0.25(outof1)duringtheCAISOpeakdemandhour,versus0to0.84forotherDGtechnologies.“Hourlycapacityfactor”referstoagenerator’soutputinaparticularhourrelativetoitsnameplatecapacity;anhourlycapacityfactorof0.25meansthatDGsolarPVinthathourwasproducingaboutaquarterofitsnameplatecapacity.

Black&VeatchacknowledgesthattherearelimitationstoonlyestimatingtheimpactofDGonCAISOpeakdemand.CAISOandeachIOUhastoplanforpeakdemandatavarietyoflevels(customertransformer,distributionfeeder,distributionsubstation,subtransmissionnetwork,transmissionsubstation,transmissionline,theutilitysystem,andtheentireCAISOsystem)andthisreportdoesnotattempttomodeltheimpactofDGateverylevel—althoughthatmaybeausefulexercise.Rather,thisreportseekstoshowthemagnitudeofDGoutputrelativetothetotalCAISOloadbecausethisgivesageneralsenseofhowmuchDGisinstalledstatewide.FuturestudiesshouldconductanalysisofDG’speakdemandimpactatotherlevelsbecausetheimpactislikelytobedifferentatlowerlevelsthanattheCAISOlevel.



Figure 1‐2 Operating DG Capacity by Program, and CAISO Demand, on September 7th, 2011

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0

100

200

300

400

500

600

700

800

900

1,000

CAISO Load

(MW)

DG Operating (M

W)

CSI

SGIP ‐ Solar PV

SGIP ‐ Non‐Solar

ERP/NSHP

All DG

CAISO Load

Peak DG Output: 728 MW

12 am 1 2 3 4 5 6 7 8 9 10 11 12pm 1 2 3 4 5 6 7 8 9 10 11 12am

CAISOPeak Load: 45,569 MW



1.4 ISSUES AND BARRIERS IMPACTING DG DEPLOYMENT TherateofDGinstallationsinCalifornia,inparticularsolarPV,hasincreasedsignificantlyoverthepastseveralyears.Thisincreasecanlargelybeattributedtoincentives,theavailabilityofnewleasingandfinancingoptions,thedeclineinsolarPVcosts,andincreasedmarketingefforts.Inmanyrespects,CaliforniahasledthenationinidentifyingandremovingbarrierstoDGdeployment.InitiativessuchasimplementationofNEM,reformofRule21,andcompletionofonlinetoolsforrebateprocessinghaveallowedCaliforniatosuccessfullyadvancethelargestDGmarketintheU.S.Despitethissuccess,therearestillbarrierstoadditionaldeploymentofDGfromtheutility’sperspective,aswellasthecustomerand/ordeveloper’sperspective.

Black&VeatchprovidesanupdateddiscussionofDGbarriersinthisreport.NumerousissuesmaylimitthedeploymentofDG,butmanyhavebeenatleastpartiallyresolved,leavingsomewithmoreimpactthanothers.Thekeyremainingissuesandbarriersidentifiedinthisreportarelistedbelow.

Table 1‐2 Key Remaining Issues and Barriers for Customer‐side DG

Financing and Economics

• EquipmentandsoftcostsofDGarehighcomparedtogridelectricity.• Availabilityofgovernmentandutilityfinancialincentivesisbecomingmorelimitedbecausefundsfor

incentiveprogramsaredeclining.

Policy and Regulatory

• PublicresistancetoDGcoulddevelopifnon‐DGcustomersareexcessivelyburdenedwithcoststosubsidizeNEMDGcustomers.

• ThereisalackofincentivestolocateDGinareaswiththegreatestbenefittothegrid;needtoadoptamoretargetedapproach.

Integration

• Lackofmonitoring,forecastingandcontrolcapabilitieslimitstheutilities’abilitytomanageDGintegrationintothedistributionsystem,andabilitytorelyonDGcapacity.

• LackofcapabilitiesintegratingDG(especiallysolarPV)withdistributionandtransmissionmodels.Thisaffectstheutilities’abilitiestoaccuratelysimulateandplanforDG.

• Distributionsystemdesignisnotintendedforinjectionofgenerationleadingtovoltageissues,reversepowerflow,etc.ThisissuewillbecomemorewidespreadasDGpenetrationincreases.

• Inverterstandardsmayneedtobechangedtoallowbettersupportofthegrid.

Miscellaneous

• ProcessingtimesandadministrativedelaysforincentiveapplicationsandinterconnectionapplicationsreducethespeedatwhichDGcanbedeployed.

• LackofsuitableprojectsitespreventsthemajorityofutilitycustomersfrominstallingDGontheirownproperty.

1.5 EMERGING TECHNOLOGIES MuchresearchanddevelopmentisbeingdoneonemergingtechnologieswhichmayalleviatesomeofthenegativeimpactsofDGsystemsandsomeofthebarrierstogreaterDGdeployment.Thesetechnologiesmayemergewithinthenext1to3yearsorthenext5to10years.However,giventherapidpaceofDGdeploymentinCalifornia,itisreasonabletoproactivelydemonstrateanddeployemergingtechnologieswiththegreatestpotentialbenefits.



ThisreportfocusesonemergingtechnologiesthatwouldprimarilybenefitPV,thelargestsourceofDGinCalifornia.Thesetechnologiesaredescribedinthelistbelow:

SmartInverters–Smartinverterscanbeequippedwithfunctionsthatalleviateimpactstothegrid.Forexample,requiringlowvoltageridethroughfunctionforinverterswouldpreventPVsystemsfromtrippingtooquicklyandaggravatingsystemdisturbances.

EnergyStorage–TheintermittencyofrenewableDGtechnologiesisachallengeintermsofintegratingthesystemstothegrid.Energystoragetechnologiescanalleviatesomeoftheintermittencyofthesesystems.

AdvancedGridManagement/SmartGridTechnologies–Avarietyofsmartgridtechnologiescanprovideutilitieswithmorevisibilityandcontrolwithinthedistributionsystem.ThemajorutilitiesinthestatehavebeenmakinglargeinvestmentsinsmartgridtechnologiesthatcouldhelpeaseDGintegrationissues.

Microgrids–Amicrogridisasmallpowersystemthatincorporatesself‐generation,distribution,sensors,energystorage,andenergymanagementsoftwarewithasynchronized,butseparable,connectiontoautilitypowersystem.ItcanenableDGintegrationthroughbettergridmonitoringandcontrolsystems,coordinationwithotherdistributedenergyresourceslikeenergystorage,andmoreactivedemandmanagement.

Other–ThereareseveralothertechnologiesthatareemergingrelatedtoreducingtheimpactsandenhancingthebenefitsofDG.TheseincludeAdvancedModeling,AdvancedDistributionManagementSystems,AdvancedVoltVArControl.Therearemanyothertechnologiesaswell.

1.6 RECOMMENDATIONS FOR FUTURE STUDY DGdeploymentontheCaliforniasystemhasbeenincreasingoverthepastseveralyears.Withthisincrease,thereareseveralunknowns.ThereismuchtobegainedfromamoredetailedinvestigationofthecurrentandfutureimpactsandbenefitsofDGontheelectricgridoftheIOUsinCalifornia.Thistypeofinvestigationwouldaddressthefollowingquestions:

HowisDGaffectingthedistributionsystemcurrently,andhowwillthischangeinthefuture?

HowmuchmoreDGcouldbedeployedonthesystemwithminimalimpactsandenhancedbenefits?

Whatadditionaltoolsareneededtoidentifyoptimallocation,type,andtimingofDG?

Howcananenhancedunderstandingofthecostsofdifferentimpacts,benefitsandsolutionshelpinformeffectivepolicytoenablethedeploymentofmoreDG?

HowcouldthedeploymentofmoreDGbebeneficial?Ifdeployedineffectively,howcoulditbedeleterious?

AnsweringthesequestionscanhelpcreateaclearroadmapofthegrowthpotentialofDG,andtoenableCaliforniatoanticipatepotentialchallengestoDGdeployment.Suchananalysisshouldstudythefiveprimarysectionslistedanddescribedbelow:

1) ExistingConditions2) ImpactsandCostsofDG



3) PotentialBenefitsofDG4) Solutions5) ScenarioAnalyses

Theanalysisshouldfocusonthestatus,impacts,costs,andbenefitsofDGonthedistributionsystem,aswellasthetransmissionsystem,andshouldbeatechnicalandquantitativeanalysis.

Inadditiontotheabovedescribedanalysis,thefollowingareasshouldalsobestudied:

Reportingissues:reviewNEMinstallationdataandcompareagainstincentiveprogramdatabases

AmountofDG(PVandnon‐PV)penetrationifincentivesandsubsidiesarenotsustainedandwhatothermechanismscanhelpsustainthemarket

Developmentofuser‐friendlymodelstoassistutilitiesinmodelingtransmission,distribution,substationandfeederlevelimpactswithincreasedDGpenetration.ThisshouldincludetransientanddynamicmodelingofDGsystems

UseofaconsistentapproachtodistributionmodelingandmonitoringacrossutilitiesspecificallytargetedtoassessdistributiongridoperationalimpactsofDGsystems


BLACK & VEATCH | Introduction 2‐1

2.0 Introduction ThisreportispreparedinresponsetoCaliforniaAssemblyBill(AB)578(Blakeslee,2008)whichrequirestheCaliforniaPublicUtilitiesCommission(CPUC)tosubmittotheLegislatureabiennialreportontheimpactsofdistributedgeneration(DG)onCalifornia’stransmissionanddistribution(T&D)systems.

OnJanuary1,2009,Section321.7ofthePublicUtilitiesCodewascreatedrequiringtheCPUCtodothefollowing:

321.7.(a)OnorbeforeJanuary1,2010,andbienniallythereafter,thecommission,inconsultationwiththeIndependentSystemOperatorandtheStateEnergyResourcesConservationandDevelopmentCommission,shallstudy,andsubmitareporttotheLegislatureandtheGovernor,ontheimpactsofdistributedenergygenerationonthestate'sdistributionandtransmissiongrid.Thestudyshallevaluateallofthefollowing:

(1)Reliabilityandtransmissionissuesrelatedtoconnectingdistributedenergygenerationtothelocaldistributionnetworksandregionalgrid.

(2)Issuesrelatedtogridreliabilityandoperation,includinginterconnection,andthepositionoffederalandstateregulatorstowarddistributedenergyaccessibility.

(3)Theeffectonoverallgridoperationofvariousdistributedenergygenerationsources.

(4)Barriersaffectingtheconnectionofdistributedenergytothestate'sgrid.

(5)Emergingtechnologiesrelatedtodistributedenergygenerationinterconnection.

(6)InterconnectionissuesthatmayarisefortheIndependentSystemOperatorandlocaldistributioncompanies.

(7)Theeffectonpeakdemandforelectricity.

Thetopicscoveredinthisreportaddressesthestudyareashighlightedinthelegislationrelatedtodistributedgenerationandtheissues,barriersandimpactsassociatedwiththeirincreasedpenetrationinCalifornia.

2.1 BACKGROUND ThisreportisthesecondreportpreparedinresponsetoAB578.Theprevious“ImpactofDistributedGeneration”report,preparedbyItron,Inc.,wasissuedinJanuaryof2010(“2010Report”).7The2010ReportprovidedbackgroundonDGinCalifornia,includingbroaddefinitionsofDGandashorthistoryofDGinCaliforniaaswellastheinstalledDGcapacitythroughSeptemberof2009.

The2010Reportprovidedseveraldefinitionsfordistributedgeneration,includingthefollowing:

DGfacilitiesaremostfrequentlydefinedasnon‐centralizedelectricitypowerproductionfacilitieslessthan20MWinterconnectedatthedistributionsideoftheelectricitysystem.DG

7 Itron, “Impacts of Distributed Generation,” Prepared for: California Public Utilities Commission Energy Division Staff, Davis, California, January 2010.



technologiesincludesolar,windandwater‐poweredenergysystems;andrenewableandfossil‐fueledinternalcombustion(IC)engines,smallgasturbines,micro‐turbinesandfuelcells.8

Forthisreport,DGissimilarlydefined,butwithaspecialfocusonsmallerDGonthecustomersideofthemeter.TheCPUCregulatesdistributedgenerationpoliciesandprogramsonboththecustomerandutility(wholesale)sideoftheelectricmeter.Thisreportisfocusedprimarilyontheimpactsandbarriersofcustomer‐sideDG,ratherthanwholesaledistributedgeneration.ManyimpactsandbarriersforwholesaleDGarealsoprevalentforcustomer‐sideDG.Whereappropriate,thisreportdiscussesbothcustomer‐sideandwholesalesystems;however,“DG”generallyreferstocustomer‐sideDGinthisreport.

Thisreportalsoprovidesanupdateofcustomer‐sideDGinstallationsresultingfromvariousCaliforniaprogramsthroughtheendof2011.Selectedinformationinthisreporthasbeenupdatedthroughtheendof2012inAppendixD.Thereportalsocoversbrieflythevariousnewprogramsdescribedaboveforwholesalegenerationthathavebeenimplementedsincethe2010Report.ForamoregeneralbackgroundonDG,includingitshistoryinCalifornia,readersshouldrefertothe2010Report.

2.2 DISTRIBUTED GENERATION POLICY GovernorBrownhasestablishedahigh‐levelgoalforCaliforniatoachieve12,000MWofrenewableDGby2020.Whilethisgoalhasnotbeenspecificallyprescribedinlaw,CaliforniahasenactedseveralnewlawsandimplementednewrulestopromoteadditionalDGsincetheissuanceofthe2010Report:

AssemblyBill(AB)1969(Yee,Stats.2006,ch.731)createdCalifornia’sFeed‐in‐Tariff(FIT)program,authorizingthepurchaseofupto480MWofrenewablegeneratingcapacityfromrenewablefacilitiessmallerthan1.5MW.Subsequentlegislation,SB32(NegreteMcLeod,2009)andSB2(1X)(Simitian,2011),increasedtheeligibleprojectsizeto3.0MW,andstate‐widetotalprocurementforinvestor‐ownedutilities(IOUs)andpublicownedutilities(POUs)to750MW.

ForDGprojectsfrom3to20MW,theCPUCadoptedD.10‐12‐048,whichinitiallyauthorizedtheIOUstoprocure1,000MW(recentlyexpandedto1,299MWbyD.12‐02‐035andD.12‐02‐002)throughtheRenewableAuctionMechanism(RAM)programbyholdingperiodicauctionstoprocurerenewableenergy.ThefirstRAMauctiontookplaceNovember15,2011.

Inadditiontotheseprograms,in2009/2010,theCPUCalsoauthorizedUtilitySolarPVProgramsforeachoftheIOUstoownandoperatesolarPVfacilitiesaswellastoexecutesolarPVpowerpurchaseagreementswithindependentpowerproducers(IPP)throughacompetitivesolicitationprocess.Intotal,theseprogramshaveagoaltobringonupto1,100MWofnewsolarPVcapacityinCalifornia.

ElectricRule21istheCPUC‐jurisdictionalinterconnectiontariff.Rule21describestheinterconnection,operatingandmeteringrequirementsforgenerationfacilitiestobeconnectedtoandoperateinparallelwithautility’sdistributionsystem.TheCPUCopenedarulemakingtoimplementimprovementstotheRule21interconnectionprocessinSeptember2011,andatthesametimelaunchedamajorsettlementprocesstoaccomplisha

8 Itron, “Impacts of Distributed Generation,” Prepared for: California Public Utilities Commission Energy Division Staff, Davis, California, January 2010.



setofglobalreformstothetariff.9TheCPUCprioritizedreformsenhancingRule21forDGprojectsinterconnectingontheutilitysideofthemeter,inordertosupporttheCPUC’snewerwholesaleDGprograms.OnMarch16,2012,fourteenpartiestothesettlementnegotiationsfiledasettlementinCPUCRulemaking(R.)11‐09‐011thatcontainedasignificantlyreformedRule21tariff.ThesettlementwasapprovedbytheCPUCinSeptember2012.10Asaresult,Rule21nowprovidestransparentrulesforaclear,predictablepathtointerconnectionforallformsofdistributedgenerationwhilemaintainingthesafetyandreliabilityoftheelectricgrid.

TheCPUCalsoconvenedRenewableDistributedEnergyCollaborative(ReDEC)workshopstostudytheissuesandimpactsofsystem‐siderenewabledistributedgenerationthatisdispersedthroughoutthegridandinterconnectedforexporttotheutility.TwoworkshopshavebeenheldandtheCPUCmayholdadditionalmeetingsinthefuture.

2.3 APPROACH AND METHODOLOGY Indevelopingthisreport,Black&Veatchreliedonseveralsourcesofinformation,including:

Gatheringandusingprimarydatafromexistingincentiveprograms

InterviewswithutilitydistributionengineersandprogrammanagersofCSIandSGIPprograms

RecentCSIandSGIPreportsandotherpublishedCPUCreportsonDG

Generalliteraturereviewofpaststudiesontheseissues

Inassessingtheissuesandimpactstotheexistingtransmissionanddistributionsystemaswellasdetermining barriers, utility programmanagers and distribution engineers were interviewed togather information regardingactual issuesexperiencedbycustomers, installers, and theutilities.ThisapproachprovidedagaugeforthedegreeofimpacttheseDGissueshaveormayhaveinthefutureonthetransmissionanddistributionsystem.

Black&Veatchalsousedsystemoutputdatatomodeltheimpacton2011peakfromDGinstalledontheCaliforniagrid.

2.4 REPORT ORGANIZATION Thereportisorganizedasfollows:

Section3–DistributedGenerationOverview:Providesanoverviewofdistributedgenerationtechnologiesandthetotalinstalledcapacityinthestateresultingfromvariouscustomer‐sideandwholesaleDGprograms.TheinformationusedisthelatestavailableasofAugust2012,withmanydatasetsupdatedonlythroughtheendof2011.Selectedinformationinthisreporthasbeenupdatedthroughtheendof2012inAppendixD.

Section4–DGImpactsontheTransmissionandDistributionSystem:Highlightspotentialimpactsofconnectingdistributedenergygenerationtothelocaldistribution

9 R. 11‐09‐011, Order Instituting Rulemaking on the Commission’s Own Motion to Improve Distribution Level Interconnection Rules and Regulations for Certain Classes of Electric Generators and Electric Storage Resources, filed September 22, 2011. 10 D.12‐09‐018, Decision Adopting Settlement Agreement Revising Distribution Level Interconnection Rules and Regulations – Electric Tariff Rule 21 and Granting Motions to Adopt the Utilities’ Rule 21 Transition Plans, adopted September 13, 2012, in R. 11‐09‐011; see also www.cpuc.ca.gov/PUC/energy/procurement/LTPP/rule21.htm.



networksandregionalgrid.ThissectionalsodiscussesDGinthecontextof2011Californiapeakdemand.

Section5–IssuesandBarriersImpactingDGDeployment:IdentifieskeyissuesandbarriersaffectingDGdeploymentinthestate.

Section6–EmergingTechnologies:DescribeskeytechnologyadvancesthatmayhelpaddresssomeofthetechnicalissuesassociatedwithDGonthegrid.

Section7–RecommendationsforFutureStudy:Recommendationsforafuturestudytobetterquantifyimpactsandaddresssomeoftheissuesandbarriersidentifiedinthereport.


BLACK & VEATCH | Distributed Generation Overview 3‐1

3.0 Distributed Generation Overview Californiahashadalonghistoryofencouragingthedevelopmentofsmallergenerationfacilitiesthatconnecteddirectlyatthedistributionleveloftheelectricitysystem.DGgrowthhasbeenspurredbyseveralgovernment‐sponsoredincentiveprograms.TheCaliforniaEnergyCommission’sEmergingRenewablesProgram(ERP)wasfundedasaresultofAB1890(Brulte,1996),andprovidedsupporttoemergingrenewableprojectsonthecustomer‐sideofthemeter.TheCPUC’sSelf‐GenerationIncentiveProgram(SGIP)startedinresponsetothe2001energycrisisandoffersincentivesforDGprojectslocatedatutilitycustomersites.TheSGIPprogramsupportedavarietyofdistributedgenerationtechnologiesincludingsolarphotovoltaic(PV),wind,fuelcells,andotherconventionaltechnologies.In2007,supportforsolarPVtechnologieswasshiftedfromtheSGIPprogramtotheCSIprogramasaresultofSB1,withagoalofpromoting3,000MWofdistributedsolarinthestatethroughtheCSIprograms(GeneralMarket,MASH,SASH),theNewSolarHomesPartnership,andtheSB1POUprograms.

Inadditiontothesecustomer‐sideprograms,therehavebeenanumberofotherprogramsinitiatedtosupportwholesaledistributedgenerationinthestate,inparttohelpthestatemeetitsRenewablePortfolioStandard(RPS)goals.ThissectionprovidesanoverviewofthecurrentDGtechnologiesandinstallationsinthestate.

3.1 DESCRIPTION OF DG TECHNOLOGIES AnumberofDGtechnologieshavebeenpromotedthroughvariousincentiveprogramsofferedbythestate.TheseincludesolarPV,wind,fuelcells,advancedenergystorageandotherconventionaltechnologies.Thesetechnologiesaredescribedinthetablebelow.



Table 3‐1 Description of Prevalent Customer‐side DG Technologies *

TECHNOLOGY DESCRIPTION

SolarPV SolarPV,whichconvertssunlightdirectlytoelectricity,hasbeenthemostwidelyadoptedDGtechnologyinCaliforniatodate.Whileitdoesnotproduceanyemissionsandcanbesitedvirtuallyanywhereinthestate,theproductionofelectricitydependsonwhenthesunisshining.ThisvariabilityinoutputmayposechallengesforT&DgridoperationassolarPVpenetrationcontinuestorise.

WindTurbines AswithsolarPV,windturbinesconvertwindpowertoelectricityonlywhenthewindreachesacertainspeed.Thus,windturbinegenerationisalsovariableorintermittentinnature.InstallationsofDG‐scalewindinCaliforniahavebeenlimited.Windfarmsaretypicallycomprisedoflarger,utility‐scaleturbinesandareconnecteddirectlytothetransmissionsystemratherthanthedistributionsystem.

FuelCells(FC) Fuelcelltechnologycanbeutilizedasaconstantorvariablepowergenerationresource.Fuelcellsconverthydrogen‐richfuelsourcesdirectlytoelectricitythroughanelectrochemicalreactionwithverylowemissions.Mostfuelcellinstallationsgeneratelessthan1MW.Commercialfuelcellplantsaretypicallyfueledbynaturalgas,whichisconvertedtohydrogengasinareformer.However,ifavailable,hydrogen,biogas,orotherfuelscanbeused.Naturalgasisnowatrelativelylowprices,whichmaycauseincreasedininterestinfuelcellsfueledbynaturalgas.

ReciprocatingInternalCombustionEngines(IC)

Reciprocatingengines aretheindustrystandardforbiogascombinedheatandpower(CHP)projects.Theoutputoftheseplantsiscontrollableandcanthereforeberampedupordownasneeded,withnaturalgasasanalternativeorbackupfuel.Theengineconfigurationisdesignedtohandleawiderangeofgasflows;theengineoutputcanbeturneddownsignificantlywithoutlosingaconsiderableamountofefficiency.Internalcombustionenginesarebyfarthemostcommongeneratingtechnologychoiceatbiogasfacilities;about75percentofthelandfillsthatgenerateelectricityuseinternalcombustionengines.

Microturbines(MT)andGasTurbines(GT)

MicroturbinesandgasturbinesarefrequentlyusedforlargerDGinstallationsthroughoutCalifornia.TheiroutputisnotintermittentlikesolarPVandwind,whichmakesintegrationofthesetechnologiestechnicallyeasier.Microturbinescanutilizenaturalgasorbiogasbycompressingandburningwithairinthecombustor,generatingheatthatcausesthegasestoexpand.Theexpandinggasesdrivetheturbine,whichinturndrivesageneratorproducingelectricity.Heatfromtheturbineexhaustisrecoveredintherecuperatorandisusedtopreheatincomingcombustionair.Thishelpsimprovetheoverallefficiencyoftheunit.Microturbinesaretypicallyratedatlessthan250kW,butmultipleunitscanbeinstalledinparallelforhighercapacity.Becauseofsizelimitations,microturbineunitscanbeattractiveforsmalltomediumsizedplants.

AdvancedEnergyStorage(AES)

Energystoragetechnologiesconvertandstoreelectricity,increasingthevalueofpowerbyallowingbetterutilizationofoff‐peakgenerationandthemitigationofpowerfluctuationsfromintermittentrenewableenergygeneration.Differenttypesoftechnologiesareavailablethatprovideavarietyofstoragedurations.Storagedurationsrangefrommicroseconds(superconductingmagnets,flywheels,andbatteries),tominutes(flywheelsandbatteries),tohoursandseasonalstorage(pumpedhydroelectric,batteries,andcompressedair).TheusagethroughoutCaliforniaislimited,drivenbytheemergingtechnology,highercost,andlimitedincentives.AcurrentconstraintonAESdeploymentisthedifficultyofmonetizingitsbenefitstotheelectricpowersystem.

*Thistableincludestechnologiesthatarepartofcustomer‐sideprograms inCA.Otherenergytechnologiesexistthatcanbeappliedindistributedapplications,suchassmallhydro,solidbiomass,andgeothermal;however,thesearenotthefocusofthisreport.



3.2 DG CURRENTLY INSTALLED IN CALIFORNIA The2010ReportaddressedtheinstalledDGinCaliforniaundertheSGIPandCSIprogramsaswellasnetenergymetering(NEM)andnon‐NEMprojectsinterconnectedtothethreeinvestor‐ownedutilities(IOUs)throughSeptemberof2009.Sincethen,newprogramshavebeenlaunchedtopromotemoreDGinthestate,onboththecustomersideandutilitysideofthemeter,andinstallationshaveincreasedunderexistingprograms.Black&VeatchreviewedprogramdatafromtheseprogramsinitiatedinthestatetodeterminethetotalamountofDGthathasbeeninstalled.Theeightcustomer‐sideprogramsinclude:

CaliforniaSolarInitiative(CSI)

● GeneralMarket(GM)

● Multi‐familyAffordableSolarHousing(MASH)

● Single‐familyAffordableSolarHousing(SASH)

SenateBill1(SB1)Publicly‐OwnedUtility(POU)Programs

NewSolarHomesPartnership(NSHP)

Self‐GenerationIncentiveProgram(SGIP)

EmergingRenewablesProgram(ERP)–nolongeractiveasofJune2012

RenewableEnergySelf‐GenerationBillCreditTransfer(RES‐BCT)Program

ManyDGsystemsinstalledundertheseeightprogramsparticipateintheNEMtariff.EachIOUmaintainsaninterconnectiondatabasethattracksDGinstallationsontheNEMtariffandthosenotontheNEMtariff.Basedonthesedatabases,Black&VeatchsummarizedtheamountofDGinstalledthroughoutthestateundertheNEMtariff(plusnon‐NEMDGinstallations)aswellastheDGinstallationsresultingfromthestate’swholesaleDGprograms.ThewholesaleDGprogramsconsistof11:

Feed‐inTariff(FIT)

● AssemblyBill1969(AB1969)

● SenateBill32(SB32)

UtilitySolarPVPrograms(SPVP)

RenewablesAuctionMechanism(RAM)

Table3‐2belowsummarizesthebasiccharacteristicsofeachDGprogram.Eachprogramisdescribedinmoredetailinsections3.2.1,3.2.2and3.2.3.

11 In addition to these wholesale DG programs, AB 1613 established a FIT for efficient combined heat and power (CHP) systems. SB 1122 also established a FIT for 250 MW of bioenergy, which was signed into law September 27th, 2012. SB 1122 is planned to go into effect in 2013. Neither the AB 1613 program nor the SB 1122 programs were investigated in detail in this report.



Table 3‐2 Summary of DG Program Characteristics

PROGRAMYEAR

INITIATEDELIGIBLE

TECHNOLOGIESELIGIBLESYSTEMSIZES

PROGRAMGOAL(MW)

CUSTOMERTYPES

NetEnergyMetering 1995 SolarPV,Wind,FC 1kW–1MW Nospecificgoal AllTypesofIOUCustomers

EmergingRenewablesProgram

1998(endedin2012)

Wind,FC(includedSolarPVuntil2007)

Upto30kW Nospecificgoal AllTypesofIOUCustomers

SelfGenerationIncentiveProgram

2001

Wind,FC,MT,GT,IC,AES,pressurereduction

turbines,bottomingcycles(includedPVuntil2007)

Upto100%ofcustomer’sannualconsumption

Nospecificgoal AllTypesofIOUCustomers

CSI–GeneralMarket 2007 SolarPV 1kW–1MW 1,940MWby2016(5%ofbudget

allocatedtoMASHand5%allocatedto

SASH)

AllTypesofIOUCustomers

CSI–Multi‐familyAffordableSolarHousing

2007 SolarPV 1kW–1MWLow‐incomeMulti‐family

Housing

CSI–Single‐familyAffordableSolarHousing

2007 SolarPV 1kW–1MWLow‐incomeSingle‐family

Housing

NewSolarHomesPartnership

2007 SolarPV 1kW–1MW 360MWby2016 NewResidentialHousing

SB1POU 2007 SolarPV 1kW–1MW 700MWby2016 AllTypesofPOUCustomers

Feed‐inTariff‐AB1969,SB380,SB32

2006‐2009SolarPV,Wind,Biomass,Biogas,SmallHydro

Upto3MW 750MW IPPs–WholesaleSide

UtilitySolarPVPrograms 2010 SolarPVVariesbyutilityfrom0.5MW

to20MW776MW

IPPsandutilities– WholesaleSide

RenewableAuctionMechanism

2011SolarPV,Wind,Biomass,Biogas,SmallHydro

3–20MW 1,299MW IPPs–WholesaleSide

Notes:FC=FuelCells;MT=Microturbines;GT=GasTurbines;IC=InternalCombustionEngines;AES=AdvancedEnergyStorage



AsshowninFigure3‐1,thegoalsforCalifornia’scurrentlyactiverenewableDGprogramstotalalmost6,000MW,abouthalfoftheGovernor’sstatedgoalof12,000MWby2020.12Notably,thetimeframeformostoftheseprogramsisbeforetheendof2016.About3,750MWofthe6,000MWisrestrictedtosolarPV.Abouthalfofthetotalisrestrictedtocustomer‐sidegenerationonly.Bycomparison,thecurrentDGprogramgoalsarewellabovethecombinedcapacityofCalifornia’snuclearplants,about4,400MW.(Itshouldbenoted,though,thatthesenuclearplantsarebaseloadresourceswithhighcapacityfactors,whileDGsolarPVsystemsarevariableresourceswithlowercapacityfactors.)

Figure 3‐1 Goals for California's Active DG Programs

Thetotalcustomer‐sideDGinstallationsthrough2011aresummarizedinTable3‐3byutilityandtechnology.13SpecificdatasourcesincludedtheCSIWorkingDataSet,CPUCandCaliforniaEnergy

12 Note that additional DG outside these programs would likely be counted towards meeting the Governor’s goal. The Governor’s goal calls for 12,000 new MW of localized electricity generation, sited at customer loads or close to where energy is consumed so that new transmission lines are not required and environmental impacts are minimized. “Localized electricity generation” counted under the Governor’s goal may or may not fall under the same definition as “DG” included in this report. Governor Brown’s goal is described at http://www.jerrybrown.org/jobs‐california%E2%80%99s‐future. 13 In this table and all others below, “#” refers to the number of individual DG installations, and “MW” refers to the combined installed capacity in ac for all DG installations in that category reported in megawatts. The tables report installations under each of the following utilities: Pacific Gas & Electric (PG&E), Southern California Edison (SCE), Southern California Gas (SCG), San Diego Gas & Electric (SDG&E), and Publicly‐Owned Utilities (POU). California

California Solar Initiative1,940 MW

New Solar Homes360 MW

Public Utility PV SB 1700 MW

Utility Solar PV Programs776 MW

Feed‐in Tariff750 MW

Renewable Auction Mechanism1,299 MW

0 MW

1,000 MW

2,000 MW

3,000 MW

4,000 MW

5,000 MW

6,000 MW

Program

Goals, M

W

System‐side (Wholesale)

Customer‐side

Open to All Renewables

Solar PV Only

+ SGIP (no MW Goal)



Commission(CEC)programdatabases,SB1POUreports,andCPUCinterconnectiondatarequests.Theinstalledcapacity(AC‐rating)presentedhereinreflectstotalDGprojectsinstalledthroughtheendof2011,excludingqualifiedfacilities(QFs).14ThemethodologyindeterminingthetotalinstalledcapacityisdescribedinmoredetailinAppendixA.

Table 3‐3 Summary of Customer‐Side DG Installed in California by Technology (All Incentive Programs) through 2011

TECH‐NOLOGY

PG&E SCE SDG&E* SCG POU TOTAL

# MW # MW # MW # MW # MW # MW

SolarPV 57,069 558 26,897 297 13,482 111 264 14 10,360 110 108,072 1,090

Wind 253 7 369 5 35 0.1 5 0.1 0 0 662 12

RF** 52 19 23 9 12 7 14 9 0 0 101 44

FC 25 10 15 6 7 6 10 6 0 0 57 28

MT 14 2 4 1 4 1 0 0 0 0 22 4

IC 13 7 4 2 1 1 4 3 0 0 22 12

Non‐RF*** 210 79 81 33 44 24 121 75 0 0 456 211

FC 65 11 5 1 9 3 16 2 0 0 95 17

MT 42 8 27 5 13 1 38 6 0 0 120 20

GT 4 5 0 0 3 9 4 16 0 0 11 31

IC 99 55 49 27 19 10 63 50 0 0 230 142

AES 1 1 0 0 0 0 0 0 0 0 1 1

Total 57,585 663 27,370 345 13,573 142 404 98 10,360 110 109,292 1,357

Notes:*CaliforniaCenterforSustainableEnergy(CCSE)istheCSIandSGIPprogramadministratorforSDG&E.**RenewableFuels(RF)includesbiomass,digestergas,andlandfillgas.***Non‐RenewableFuels(Non‐RF)includesnaturalgas,propanegas,wastegas,andanyinstallationsforwhichthefueltypeisnotspecified.FC=FuelCells;MT=Microturbines;GT=GasTurbines;IC=InternalCombustionEngines;AES=AdvancedEnergyStorage

Basedonthisanalysis,thetotalnumberofDGinstallationsinthestatereachednearly110,000bytheendof2011andprovidedatotalinstalledcapacityofover1,350MWac.Ofthistotal,

Center for Sustainable Energy (CCSE) is the CSI and SGIP program administrator for SDG&E. Renewable Fuels (RF) include biomass, digester gas, and landfill gas; Non‐Renewable Fuels (Non‐RF) include natural gas, propane gas, waste gas, and any installations for which the fuel type was not specified. 14 QFs are facilities designated under the Public Utility Regulatory Policies Act of 1978 (PURPA) to receive special rate and regulatory treatment. They fall into two broad categories: 1) small power production facilities less than 80 MW whose primary energy source is renewable (e.g. hydro, solar, and wind), or 2) cogeneration facilities.



1,090MWacaresolarPVinstallations.Thesenumberscontinuetoincreaserapidly.Forexample,attheendof2012thetotalcustomer‐sideDGinstalledthroughoutthestatewasabout1,800MW;thisinformationisincludedinAppendixD.

Figure3‐2,Figure3‐3,andFigure3‐4belowdisplaythecumulativeDGcapacityinstalledeachyearsince1998,byprogramandbytechnology(Figure3‐4isamoredetaileddisplayofthenon‐solarDGshowninFigure3‐3).Thelargestgroupofadditionssince2009hasbeensolarPVtechnologiesdevelopedthroughtheCSIandSB1POUprograms.Updatedversionsofthefiguresbelowincluding2012dataareincludedinAppendixD.

Figure 3‐2 Cumulative DG Capacity Installed by Program

0

200

400

600

800

1,000

1,200

1,400

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MW Installed

California Solar Initiative

Public Utility SB 1

Self‐Generation Incentive Program

CEC Programs (Emerging Renewables Program and New Solar Homes Partnership)



Figure 3‐3 Cumulative DG Capacity Installed by Technology

Figure 3‐4 Cumulative Non‐Solar DG Capacity Installed by Technology

The following subsections describe the California DG programs inmore detail, and also provideinstalled capacity data for each. Section 3.2.1 covers customer‐side DG programs, Section 3.2.2

0

200

400

600

800

1,000

1,200

1,400

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MW Installed

Solar PV

Non‐Solar DG

0

50

100

150

200

250

300

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Non‐Solar MW Installed

Advanced Energy Storage

Internal Combustion Engines ‐ Non‐Renewable

Gas Turbines ‐Non‐Renewable

Microturbines ‐Non‐Renewable

Fuel Cells ‐Non‐Renewable

Internal Combustion Engines ‐ Renewable

Microturbines ‐ Renewable

Fuel Cells ‐ Renewable

Wind



covers the NEM tariff and non‐NEM DG installations, and Section 3.2.3 covers wholesale DGprograms.

3.2.1 Customer‐Side DG Incentive Programs

Thissectiondescribestheeightcustomer‐sideDGprogramsinmoredetail.TheseprogramsprovidefinancialincentivestosupporttheinstallationofDGonthecustomer’ssideofthemetertooffseton‐siteelectricityconsumption.Eachprogramisdescribedbelow,andtheDGcapacityinstalledundereachprogramissummarizedinTable3‐4.

CaliforniaSolarInitiativeTheCSIprogramhasthreecomponentsasdescribedbelow.ItiscurrentlytheprimaryincentiveprogramforsolarPVinthestate,andisoverseenbytheCPUCwitheachutilityadministeringtheCSIinitsownserviceterritory.15ItprovideseitherrebatesintheformofupfrontExpectedPerformance‐BasedBuydown(EPBB)incentivesorongoingperformance‐basedincentives(PBI)tocustomersofthethreemajorinvestor‐ownedelectricutilitiesinCalifornia(PG&E,SCE,andSDG&E)whoinstallsolarPVsystemsbetween1kWand1MW.Itbeganin2007andhasagoalofinstalling1,940MWofsolarPVinCaliforniaby2016.

CSI–GeneralMarketTheGeneralMarket(GM)portionoftheCSIprogramencompassesthemajorityofresidential,commercial,non‐profit,governmentandindustrialcustomers.Throughtheendof2011,almost63,000projectshavebeeninstalledforatotalof689MW.Sincethen,therehasbeensignificantadditionalgrowth,andbyDecember31,2012thetotalreached91,256projectsand1,031MW.ThoughtheCSIGMprogramisnotscheduledtoenduntil2016,allthreeprogramadministratorsarenearingtheendoftheiravailableincentivesasofMarch2013.Therearetenincentivelevels,andasmoreincentivesarereserved,theincentivelevelsaredesignedto“stepdown”overtime.PG&Ehasreachedthetenthandfinalstepforbothresidentialandnon‐residentialcustomers,SCEhasreachedtheninthstepforbothresidentialcustomersandtheeighthstepfornon‐residentialcustomers,andSDG&Ehasreachedthetenthstepforresidentialcustomersandtheeighthstepfornon‐residentialcustomers.16

CSI–Multi‐familyAffordableSolarHousingUnderCSI,therearetwolow‐incomeprograms—Multi‐familyAffordableSolarHousing(MASH)andSingle‐familyAffordableSolarHousing(SASH)—thatpromotesolarPVinstallations.TheMASHprogramprovidesrebatestolow‐incomemulti‐familyhousingunitsthatinstallsolarPVsystems.FivepercentoftheCSIbudgetisallocatedtoMASH.ItsframeworkwasadoptedandtheprogramofficiallybeganinOctober2008.Through2011,143projectshavebeeninstalledforatotalof7MW.

CSI–Single‐familyAffordableSolarHousingTheSASHprogramisalsopartoftheCSIandprovidesrebatestolow‐incomesingle‐familyhousingunitsthatinstallsolarPVsystems.FivepercentoftheCSIbudgetisallocatedtoSASH.ItbeganinNovember2007,andisadministeredbythenon‐profitorganizationGRIDAlternativesonbehalfoftheCPUC.(InTable3‐4,theMWinstalledfortheSASHprogramareallocatedtoeachProgramAdministratorbasedontheshareofthetotalnumberofinstallations.)Through2011,1,185projectshavebeeninstalledforatotalof3MW.

15 California Center for Sustainable Energy (CCSE) is the CSI and SGIP program administrator for SDG&E. 16 http://csi‐trigger.com/, accessed September 26, 2012.



CSISummaryTable3‐4summarizesthestatusoftheCSIprogramthroughtheendof2011byprogramandutility.WhiletheMASHandSASHprogramshave10percentoftheoverallprogrambudgetallocatedtothem,theyonlycomprisedabout1percentoftheMWinstalledthroughtheendof2011.

Table 3‐4 Summary of CSI Installations by Program and Utility (All Solar PV)

PROGRAM

PG&E SCE SDG&E* TOTAL

# MW # MW # MW # MW

GeneralMarket 35,194 384 19,305 226 8,452 79 62,951 689

MASH 74 3 38 3 31 2 143 7

SASH 613 2 410 1 162 0.5 1,185 3

CSITotal 35,881 389 19,753 230 8,645 81 64,279 700

Notes:*CaliforniaCenterforSustainableEnergy(CCSE)istheCSIandSGIPprogramadministratorforSDG&E.

Self‐GenerationIncentiveProgramTheSelf‐GenerationIncentiveProgram(SGIP)wasinitiatedin2001toprovidecustomersincentivestoinstalltheirowngenerationandhelpreducepeakelectricitydemandinthestate.ItisoverseenbytheCPUCwitheachutilityadministeringtheSGIPinitsownserviceterritory.Itprovidesrebatestocustomersoffourinvestor‐ownedutilitiesinCalifornia(PG&E,SCE,SCG,andSDG&E)whoinstallDGsystems.Thecurrentlistofeligibletechnologiesincludes:windturbines,fuelcells,gasturbines,microturbines,internalcombustionengines,advancedenergystorage,pressurereductionturbines,andbottomingcycles.Systemsizescannotexceed100percentofthecustomer’speakload,exceptwindturbinesmaybesizedupto200percentofthecustomer’speakload.SolarPVsystemsover30kWwereaneligibletechnologyuntil2007,whentheCSIprogrambegan;PVsystemsunder30kWwerepartoftheERP.Nearly1,500projectshavereceivedrebatesunderSGIPforatotalof406MW.The2011SGIPImpactEvaluationreportnotesthatthereareanumberofSGIPprojectsthathavebeendecommissioned(i.e.theyhavebeenremovedfromoperation),andalsoanumberwhoseoperatingstatusisunknown.Table3‐5belowshowsthetotalrebatedcapacityunderSGIP,buttherearecurrently20MWofdecommissionedsystemsand45MWofsystemswithunknownoperatingstatus.ThedecommissionedsystemsarenotincludedinthepeakdemandimpactanalysisdescribedinSection4.4.



Table 3‐5 Summary of SGIP Installations by Technology and Utility

TECHNOLOGY

PG&E SCE SDG&E* SCG TOTAL

# MW # MW # MW # MW # MW

SolarPV 493 81 232 36 103 13 90 13 918 143

Wind 7 6 3 2 0 0 0 0 10 8

RF** 52 19 20 9 12 7 14 9 98 44

FC 25 10 12 5 7 6 10 6 54 28

MT 14 2 4 1 4 1 0 0 22 4

IC 13 7 4 2 1 1 4 3 22 12

Non‐RF*** 210 79 81 33 44 24 121 75 456 211

FC 65 11 5 1 9 3 16 2 95 17

MT 42 8 27 5 13 1 38 6 120 20

GT 4 5 0 0 3 9 4 16 11 31

IC 99 55 49 27 19 10 63 50 230 142

AES 1 1 0 0 0 0 0 0 1 1

Total 763 185 336 80 159 44 225 97 1,483 406

Notes:*CaliforniaCenterforSustainableEnergy(CCSE)istheCSIandSGIPprogramadministratorforSDG&E.**RFincludesthefollowingfueltypes:biomass,digestergas,andlandfillgas.***Non‐RFincludesthefollowingfueltypes:naturalgas,propanegas,wastegas,andinstallationsforwhichthefueltypeisnotspecified.ThenumberslistedinthistablerepresentallrebatedsystemsunderSGIP,includingdecommissionedsystemsandsystemswhoseoperatingstatusiscurrentlyunknown.FC=FuelCells;MT=Microturbines;GT=GasTurbines;IC=InternalCombustionEngines;AES=AdvancedEnergyStorage

EmergingRenewablesProgramTheCECadministerstheEmergingRenewablesProgram(ERP),whichprovidesrebatestocustomersofCaliforniautilitiesforinstallingsolarPV,wind,orfuelcellsystemsunder30kW.Itwasestablishedin1998tostimulatemarketdemandfordistributedgenerationtechnologies,andwastheprimaryincentiveprogramforthesetechnologiesuntilthebeginningoftheSGIP.AftertheCSIprogrambeganin2007,solarPVsystemswerenolongereligiblefortheprogram.TheprogramwasdiscontinuedinlateJune2012inaccordancewithSenateBill1018(Stats.2012,ch.39).Nearly29,000projectshavebeeninstalledunderERPforatotalof128MW.



Table 3‐6 Summary of ERP Installations by Technology and Utility

TECHNOLOGY

PG&E SCE SDG&E OTHER* TOTAL

# MW # MW # MW # MW # MW

SolarPV 17,569 79 6,175 29 4,123 15 174 1 28,041 123

WindTurbines** 246 1 366 3 35 0.1 5 0.1 652 4

FuelCells 0 0 3 0.4 0 0 0 0 3 0.4

Total 17,815 80 6,544 32 4,158 15 179 1 28,696 128

Notes:*Inadditiontothethreelargeinvestor‐ownedelectricutilities,someothersmallutilitiesparticipatedintheERP,andtheseinstallationsareincludedinthe“Other”columns.**Installationscategorizedas“SolarPV&Wind”areincludedinthe“WindTurbines”category.

NewSolarHomesPartnershipTheNewSolarHomesPartnership(NSHP)isadministeredbytheCECandbeganin2007asacomplementaryprogramtotheCSI.ItsfocusistoprovidefinancialincentivesandothersupporttohomebuilderstoencouragethemtointegratesolarPVintohighlyenergy‐efficientnewresidentialhousingbuiltinCalifornia.Theultimategoaloftheprogramis360MWofsolarPVonnewresidentialdevelopmentsby2016.Nearly4,500projectshavebeeninstalledunderNSHPforatotalof14MW.

Table 3‐7 Summary of NSHP Installations by Utility

TECHNOLOGY

PG&E SCE SDG&E TOTAL

# MW # MW # MW # MW

SolarPV 3,126 9 737 2 611 3 4,474 14

SB1POUProgramsSenateBill1,whichtookeffectin2007,requiredallpublicutilitiestoestablishincentiveprogramsforsolarPVsimilartotheCSIprogram.Eachutilityadministersitsownprogram.Theoverallgoalisforpublicutilitiestoinstall700MWby2016.TheCECtracksSB1installationsofeachpublicutility.LosAngelesDepartmentofWater&Power(LADWP)andSacramentoMunicipalUtilityDistrict(SMUD)arethetwolargestpublicutilitiesinCaliforniaandhavethemajorityofPOUcustomerinstallationsinthestate.AllPOUscombinedhaveinstalledover10,000solarPVprojectsforatotalof110MW.



Table 3‐8 Summary of SB 1 POU Installations by Utility

TECHNOLOGY

LADWP SMUD ALLOTHERS TOTAL

# MW # MW # MW # MW

SolarPV 3,027 32 2,952 31 4,381 46 10,360 110

RenewableEnergySelf‐GenerationBillCreditTransferProgramTheRenewableEnergySelf‐GenerationBillCreditTransfer(RES‐BCT)ProgramwascreatedasaresultofAB2466(Laird,2008).ThetariffsapprovedbytheCPUCunderthisprogramallowlocalgovernmentstogenerateelectricityatoneaccountandtransferanyavailableexcessbillcredits(indollars)toanotheraccountownedbythesamelocalgovernment.DGsystemseligibleunderthisprogrammustbelessthan5MW,andthereisastatewideprogramlimitof250MW.Asoftheendof2011,therewerenoknownDGinstallationsparticipatinginthisprogram.

3.2.2 NEM Tariff and Non‐NEM DG Installations

TheNEMtariffwasestablishedbylegislationandisimplementedbytheCPUCforelectriccustomerswhoinstallsolar,wind,biogasorfuelcellsystemsof1MWorless.TobeeligiblefortheNEMtariff,generationmustbesizedtoprimarilyoffseton‐siteelectricalload.UndertheNEMtariff,acustomerisallowedtosendpowertotheutilitywhentheyaregeneratingmorepowerthantheyconsume.Customersreceiveafullretailratecreditforallgenerationexportedtothegridoverthecourseofayear,uptotheamountoftheirannualusage.ThiscreditcanbeusedtooffsetallkWh‐basedchargesexceptminimummonthlychargesorcustomercharges.Ifthecustomer’sexportsoverthecourseofayeararegreaterthanthecustomer’sannualusage,theyarecompensatedfortheexcessattheday‐aheadmarketprice(whichisgenerallylowerthanretailrates).Themajorityofcustomer‐sideDGinstallationstakeadvantageofthistariff(summarizedinTable3‐9),althoughtherearesomewhichdonot(summarizedinTable3‐10),oftenbecausetheydonotanticipateeverexportingpowerbacktothegrid.

EachIOUtracksNEMandnon‐NEMDGinstallationsthroughinterconnectioninformationandreportsthisdatatotheCPUCquarterlythroughthe“DistributedGenerationInterconnectionDataRequests”(DGInterconnectionDataset).Thereareatotalofabout1,580MWofreportedinstallationsinterconnectedtothethreeIOUs,bothNEMandnon‐NEM.TheseinstallationsarenotadditivetotheinstalledcapacityreportedinSection3.2.1.Thedatashowninthetablesbelowarebasedsolelyontheinterconnectiondatasets,andhavenotbeenindependentlyverifiedbyBlack&Veatch.



Table 3‐9 Summary of NEM DG Installations by Technology and Utility

TECHNOLOGY


# MW # MW # MW # MW

SolarPV 59,946 616 27,998 310 13,483 116 101,427 1,042

Wind 149 4 316 5 42 0.1 507 9

FC 79 13 27 5 0 0 106 18

IC 11 94 0 0 0 0 11 94

Multiple/Other* 123 26 65 6 2 0 190 32

Total 60,308 753 28,406 327 13,527 116 102,241 1,196

Notes:*Multiple/otherincludesmultipletechnologiesortechnologiesthatdonotfallintotheDGcategoriescoveredbythecustomer‐sideDGincentiveprogramsabove.FC=FuelCells;IC=InternalCombustionEnginesThistableincludesallNEMinstallations,includingthoseontheStandardNEMtariffandthoseontheNEMW,NEMFC,andNEMBIOtariffs.StandardNEMandNEMWprovidethefullretailrate,whileNEMFCandNEMBIOcoveronlythegenerationportionoftherate.



Table 3‐10 Summary of Non‐NEM DG Installations by Technology and Utility

TECHNOLOGY

PG&E SCE* SDG&E* TOTAL

# MW # MW # MW # MW

SolarPV 249 39 40 15 ‐ ‐ 289 54

Wind 2 2 ‐ ‐ ‐ ‐ 2 2

FC 13 7 ‐ ‐ ‐ ‐ 13 7

MT 44 10 ‐ ‐ ‐ ‐ 44 10

GT 15 89 ‐ ‐ ‐ ‐ 15 89

IC 122 122 ‐ ‐ ‐ ‐ 122 122

Multiple/Other** 19 99 ‐ ‐ ‐ ‐ 19 99

Total 464 368 40 15 ‐ ‐ 504 383

Notes:*SCEandSDG&Edidnotreportanynon‐NEMinstallations(exceptthatSCEreportedasmallnumberofsolarPVsystems),becausetheCPUCdidnotrequirethemtobereported.**Multiple/otherincludesmultipletechnologiesortechnologiesthatdonotfallintotheDGcategoriescoveredbythecustomer‐sideDGincentiveprogramsabove.FC=FuelCells;MT=Microturbines;GT=GasTurbines;IC=InternalCombustionEngines

3.2.3 Wholesale DG Programs

Inadditiontothecustomer‐sideprogramsdescribedabove,CPUCalsooverseesthreeprimarywholesalerenewableDGprograms,inwhichprojectsareinterconnectedontheutilitysideofthemeter.17TheseprogramsrequiretheIOUsinCaliforniatosignpowerpurchaseagreements(PPA)withlargerDGprojectsbetween1and20MW.Addedtogether,thegoalsofthewholesaleDGprogramsareapproximately3,150MW.Asoftheendof2011,atotalof101MWhavebeeninstalledundertheseprograms.

Feed‐InTariff(AB1969andSB32)Thefeed‐intariff(FIT)programbeganinCaliforniain2006,whenAssemblyBill1969(Yee,2006)waspassedtoauthorizespecialtariffsandstandardcontractsforpublicwaterandwastewaterutilitiestoinstallrenewableenergyprojectsupto1.5MW.ThesetariffsweremadeeffectivebytheCPUCinFebruary2008,andappliedonlytoPG&EandSCE.SenateBill380(Kehoe,2008)createdasingletariffforallutilitycustomersandaddedSDG&E.SenateBill32(Negrete‐McLeod,2009)waspassedin2009andincreasedeligibleprojectsizeto3MW.Allpublicandinvestor‐ownedutilitiesinCaliforniaarerequiredunderSB32todevelopFITprograms.Theoverallstatewidegoalis750MWunderSB32,butthereisnosetdatebywhichutilitiesmustreachthistarget.

17 Qualifying facilities under PURPA (for renewables and gas‐fired generation), efficient combined heat and power under AB 1613, and bioenergy facilities under SB 1122 programs are other programs in which distributed sellers may be interconnected to the utility distribution system, and thus be considered DG. These programs are not included in this report.



Twenty‐oneprojectshavebeencontractedandbroughtonlinethroughAB1969bytheIOUstotaling18MW.ThesearesummarizedinTable3‐11belowbytechnology.TherewerenorecordedinstallationsunderSB32asoftheendof2011.

Table 3‐11 Summary of FIT – AB 1969 Installations by Technology

TECHNOLOGY


# MW # MW # MW # MW

Biogas 3 2 1 1 4 6 8 9

Biomass 1 1 0 0 0 0 1 1

SmallHydro 10 6 0 0 0 0 10 6

SolarPV 0 0 2 2 0 0 2 2

Total 14 8 3 3 4 6 21 18

UtilitySolarPVProgramsIn2009and2010,SCE,PG&EandSDG&EwereauthorizedbytheCPUCtoinitiateSolarPVPrograms(SPVP)toprocuretheoutputfromwholesalesolarPVprojectsthroughtwomechanisms:1)developingtheirownutility‐ownedgeneration(UOG)projects,and2)signingcontractswithindependentpowerproducers(IPP)intheirserviceterritories.Originally,theprogramstotaled1,100MW,butSCEandSDG&EaskedforaportionoftheprogramtobemergedintotheRenewableAuctionMechanismprogram(describedinnextsection).Thecurrentgoalis776MW.Systemsizesvaryacrosstheutilities,butgenerallyrangefrom500kWuptoamaximumof20MW.Thegoalsforeachutilityareasfollows:

PG&Ehasatotalprogramgoalof500MW,splitevenlybetweenUOGandIPPprojects.InDecember2012,PG&EsubmittedarequesttotheCPUCtomove252MWofsolarPVfromthisprogramtotheRAMprogram.

SCEoriginallyhadaprogramgoalof500MW,splitevenlybetweenUOGandIPPprojects.However,SCEsoughtCPUCpermissiontoreducethisto250MW,againsplitevenlybetweenUOGandIPPprojects.SCEsoughtapprovaltomove225MWtotheRAMprogram,whichtheCPUCgranted.18

SDG&Ehadanoriginalprogramgoalof100MWwhichissplitinto26MWofUOGprojectsand74MWofIPPprojects.SimilartoSCE,SDG&Esoughtandreceivedapprovaltomovethe74MWofIPPprojectstotheRAMprogram.19

Table3‐12showsthatasoftheendof2011,83MWhadbeeninstalledtowardthosegoals.20

18 Southern California Edison, “Southern California Edison Company’s (u 338‐e) Third Annual Compliance Report on the Solar

Photovoltaic Program”, July 2, 2012, available at: http://www3.sce.com/sscc/law/dis/dbattach4e.nsf/0/3D14CD4ADEC4C8A488257A2F0080B23D/$FILE/A0803015_R1105005+‐+SCE+3rd+Annual+SPVP+Compliance+Report_Public.pdf 19 CPUC, “RPS Quarterly Report – 1st and 2nd Quarter 2012”, available at: http://www.cpuc.ca.gov/NR/rdonlyres/2060A18B‐CB42‐4B4B‐A426‐E3BDC01BDCA2/0/2012_Q1Q2_RPSReport.pdf



Table 3‐12 Summary of IOU Solar PV Program Installations by Ownership

OWNERSHIP


# MW # MW # MW # MW

Utility‐owned 4 52 7 12 0 0 11 64

IndependentPowerProducer 0 0 8 19 0 0 8 19

Total 4 52 15 31 0 0 19 83

RenewableAuctionMechanismTheRenewableAuctionMechanism(RAM)programbeganin2011whentheCPUCapproveditasasimplifiedprocurementmechanismforwholesalerenewableDGprojects.TheCPUCinitiallyauthorizedtheIOUstoprocure1,000MW,whichwasthenexpandedto1,299MWbyCPUCdecisionsD.12‐02‐035andD.12‐02‐002.Projectsbetween3and20MWmustmeetcertaineligibilitycriteria,andmustsignapre‐approvedstandardPPA.Auctionsareheldtwiceperyear,withthefirstauctioninNovember2011.ContractsfromthisfirstauctionwereapprovedbytheCPUCinApril2012,sotherewerenooperationalprojectsasoftheendof2011.Additionalauctionsareplannedin2012andbeyond.

20 The totals are based on the CPUC RPS Contract database. However, at least in the case of SCE, they do not appear to exactly match the numbers in the compliance filing referenced above.


BLACK & VEATCH | DG Impacts on the Transmission and Distribution System 4‐1

4.0 DG Impacts on the Transmission and Distribution System Asdiscussedinthissection,DGmayhavepositiveandnegativeimpactsonthetransmissionanddistributionsystem.BecauseofthedirectconnectionofDGtothedistributionsystem,impactsareexpectedtobemostprevalentatthedistributionlevel.However,asthepenetrationofDGincreases,theimpactswillbegintobeobservedonthetransmissionsystem.

ManyoftheimpactsofDGareattributabletothefactthatthegridwasnotoriginallydesignedtoacceptgenerationonthedistributionsystem.Traditionally,centralizedgenerationwasconnectedtothetransmissionsystem,whichsuppliedthedistributionsystem,whichinturnfedthemajorityofloads.Thisdesignisdepictedinthefigurebelow,illustratingtheflowofelectricpowerfromgeneration,throughtransmission,throughthedistributionsystem,andontocustomerloads.Thedistributionsystemisgenerallydefinedastheportionofthegridwithavoltageof40kVorless.21Thetransmissionsystemisgenerallytheportionofthegridthatoperatesabove40kV.

Figure 4‐1 Typical Electric Power System Single‐Line Diagram22

Thefollowingtopicsarecoveredinthissection:

Section4.1–ImpactsofDGonthedistributionsystem 21 Distribution voltage definition per the Institute of Electrical and Electronics Engineers (IEEE) Standard 141 is a nominal voltage of 40 kV or less. Often, voltage levels between 40 kV and 138 kV are considered to be “subtransmission;” however, this report discusses both subtransmission and transmission as transmission. Each utility in California operates its own distribution system of varying voltage levels. 22 J. Keller and B. Kroposki, “Understanding Fault Characteristics of Inverter‐Based Distributed Energy Resources,” National Renewable Energy Laboratory, Golden, CO, January 2010, p. 31.



Section4.2–ImpactsofDGonthetransmissionsystem

Section4.3–EffectsofaDGsystem’ssizeandlocationonitsgridimpacts

Section4.4–ImpactthatDGhasontheCAISOpeakdemand

Whileanumberofimpactsaredescribedinthissection,itisimportanttonotefewhavebeenwidelyobserved.Iftheyhavebeenobserved,itisdifficulttoconclusivelyattributethemtocustomer‐sideDGsystems.Theimpactsdescribedherehavebeenidentifiedthroughmodeling,research,orlimitedreal‐worldobservations.Thelackofobservedimpactscanbeattributedtoseveralreasons:

Currentlyabout90percentofconnectedDGcapacityisonthecustomer‐sideofthemeter

Customer‐sideDGsystemsaretypicallysmall

ThecurrentpenetrationlevelofDGislow

Atthegivenpenetrationlevels,theinterconnectionprocessandrequirementshavesuccessfullymitigatedimpactsbeforetheyoccur

ThereisagenerallackofmonitoringDGsystemoutput23andoftheeffectsofDGsystemsonthegrid(thatis,utilitiesdonothavetheappropriatetoolstosystematicallycollectandevaluatedataonproblemsorbenefitsattributabletoDG).

Forthesereasons,itisdifficulttoquantifytheimpactsofcustomer‐sideDGonthegrid.ItisexpectedbymanythatimpactswillincreaseasDGpenetrationincreases.However,tobeabletoquantifytheimpacts,theutilitieswillneedtobeginsystematicallymonitoringforthemandthenassociatingthemwithDGsystems.Furthermore,theutilitieshavenotedthatdatacollectionormonitoringalonewillnotnecessarilyleadtoabetterunderstandingoftheimpactsofDGonthegrid.FormalresearchanddevelopmentisrequiredtofacilitatebetterunderstandingofissuesandbenefitscorrelatedtoDG.

QuantificationofDGimpactsisvitallyimportanttotheDGindustry,utilitiesandpolicymakers.ItwillinformdecisionsthatseektofurtherDGgoalswhileminimizingthenegativeimpactsofDGandmaximizingitsbenefits.

4.1 DISTRIBUTION SYSTEM RELIABILITY AND OPERATION ImpactsofDGondistributionsystemreliabilityandoperationaredescribedinthissection.Itisimportanttonote,however,thatimpactsarehighlydependentonthelocalfeederconfigurationandloadinglevel.24Impactsdiscussedinthissectionincludethefollowing:

Distributionsystemlinelosses

Peakdemandreduction

23 As noted above, currently only units 1 MW or larger have telemetering requirements. Smaller units do not have this requirement since at lower penetrations the expectation was that the impacts would be minimal, the cost to collect the data would be relatively high, and processing of this additional data may not be necessary. This assumption should be revisited as penetration increases or the operational requirements for DG change. In that vein, California utilities have recently proposed telemetering requirements for certain wholesale DG smaller than 1 MW where the power will be exported and scheduled into CAISO’s market. As of this writing, the CPUC has not yet evaluated those proposals. 24 Itron, “Final 2007‐2009 Impact Evaluation,” Submitted to: Southern California Edison and California Public Utilities Commission Energy Division, February 2010, p. 4‐30.



Deferreddistributionsystemupgrades

Frequencycontrol25

Voltagecontrol

Reversepowerflow

Operationflexibility

4.1.1 Distribution System Line Losses

DGsystemshavethepotentialtoreducetheamountofenergylostduetotransmittingenergyoverlongdistancesondistributionlines.Typically,energytravelsfromacentralizedgeneratingsourcethroughsubstationstoload.BecauseDGsupplieslocalloads,lessenergyisrequiredtotravelfromcentralizedsources,anddistributionlossesmaybereduced.However,insomecasesDGmayactuallyincreaselosses.Forexample,ifaDGsystemisinjectingmorepowerontothedistributionsystemthanconductorswereoriginallydesignedfor,lossescouldactuallyincrease.

Someresearchershavemodeleddistributionsystemsandfoundtheretobeanoptimalpenetrationleveltominimizelinelossesonasinglefeeder.Forexample,UCIrvineandPG&Eresearcheshavemodeledtwofeedersandfoundtheoptimalpenetrationleveltoreducelinelossesisapproximately60percent.Abovethoselevelslinelossesbegintoincrease.26Asareference,currentpenetrationlevelsinCaliforniaaregenerallybelow10percent.

DuringinterviewswithIOUs,distributionlinelosseswerenotmentionedasanimpactofDG.WhilereductionindistributionlinelossesshouldtheoreticallybeoccurringasDGincreasesandreversepowerflowislimited,theutilitiesarenotsystematicallyquantifyingthisbenefit,orpossiblecost,andassociatingittoDG.Itmaybepossibletomorecloselytrackthismetricasutilitiesgainmoreintelligenceaboutdistributionsystemperformancethroughsmartgridupgrades.

4.1.2 Peak Demand Reduction

TotheextentDGoutputiscorrelatedwithlocalloads,DGmayreducethepeakloadonsomepartsofthedistributionsystem.TheamountofpeakdemandreductionwilldependonthetypeofDGresource,itsoperatingpattern,andtheloadprofileforthefeederorsubstation.Peakdemandreductionisgenerallyviewedasapositiveimpactasitreducestherequiredcapacityandequipmentforthesystem.PeakdemandreductionisexploredfurtherinSection4.4,whichanalyzestheimpactontotalsystempeakaswellassomeselecteddistributionfeeders.

4.1.3 Deferred Distribution System Upgrades

DGcanreducetheutilizationofthedistributionsystemaslessenergyisrequiredtobetransportedoverthesystem(asdescribedabove),andthisisgenerallyviewedasapotentialpositiveimpactofDG.WithinstallationofDG,thenetloadseenbythedistributionsystemmaynothaveincreasedassignificantlyasexpected,orthesystemmightageslowerthanexpectedbecauseitisusedless.Tosomeextent,plannedupgradestothedistributionsystemforcapacityincreasesorreplacementofdevicesbecauseofwearandtearmaybepartiallydelayedordeferredifDGsystemsarelocated 25 It should be noted that the frequency of the distribution system and transmission system is the same, and therefore impacts to frequency on the distribution system similarly affect the transmission system. For simplicity, the frequency control impact is listed and discussed under distribution system impacts here. 26 J. Payne, F. Gu, J. Brouwer, S. Samuelsen, M. Heling, J. Carruthers, D. Pearson, “Evaluation of High Pen PV in Distribution Circuits”, High Penetration Solar Forum 2013, February 2013.



anddesignedappropriately.27However,systemupgradesandmaintenanceareimpactedbyseveralfactorssuchasage,temperatureandweatherconditions,surroundingequipment,andsoon.

Unfortunately,basedoninterviewswithIOUs,theywereunawareofDGsystemsinCaliforniathathaveprovidedthisbenefit.Infact,IOUsindicatedthattheinstallationofsomeDGsystemscanrequireupgradestothedistributionsystem;forinstance,sinceDGincreasesthevoltageatthepointofinterconnection,IOUsmayneedtoperformupgradestopreventvoltagefromexceedingallowablelimits,particularlyifthereisahighlevelofgenerationduringoff‐peakconditions.Further,increasedcyclingofequipment(suchascapacitorbanks)duetointermittentrenewablesmayincreasemaintenancerequirements.

ToachievethisbenefitwouldrequirestrategiclocationofDGonthedistributionsystem.UtilitiesalsodesirethattheDGbeavailableordispatchable,includingpotentiallycontractualobligationstoprovidereliablepower.However,therearenoincentivesforDGsystemownersordevelopers,specificallywholesaleDG,tolocateDGinlocationsthatprovidethemaximumbenefitintheformofdeferreddistributionsystemupgrades.Thismaybeabarriertofurthercost‐effectivedeploymentofDG,asdiscussedinSection5.2.1.

Inaddition,PG&Ehassuggestedthatdistributiondesignstandardsmayneedtobereviewedtoseeifmodificationstosystemdesigncouldincreasethebenefitsofdistributedgeneration,oratleastmitigatetheimpactssuchthathigherpenetrationscouldbeachievedataloweroverallcost.

4.1.4 Frequency Control

TheCPUCRule21andIEEEstandardsprovidefrequencyrequirementsforDGconnectingtothedistributionsystem.TheserequirementsprovidetheupperandlowerlimitsforthefrequencyoftheDGsystem.Whenthefrequencygoesoutsideofthespecifiedrange,theDGsystemswillautomaticallybetrippedoffline.

Energygeneratingtechnologiesthathaveinertia,suchascombustionturbines,providefrequencysupport–meaningtheycanhelpadjustthefrequencyofthegrid.Thiscanbedonebyeitherspeedinguporslowingdowntherotationofthedevices.

ThemostprevalentDGtechnologies,suchassolarPV,donotprovidefrequencysupport.Infact,thesesystemsarerequiredtotripoffline(UL1741)intheeventofanoverorunderfrequencysituation.TheneteffectofDGsystemstrippingofflinecould,inthefuturewhenhigherpenetrationisachieved,exacerbateanunderfrequencysituation;thisisviewedasanegativeimpactofDG.

Whilefrequencyimpactshavebeenseeninmodelsandactualsystemfrequencydata,theIOUsarenotabletoattributetheseimpactstocustomer‐sideDGsystems.TheexpectationisthatasDGpenetrationincreasesutilitieswillbeabletoattributetheseimpacts,ortheexacerbationoftheseimpacts,toparticularsystems.

Changestoinverterstandards(specificallyIEEE1547),suchasallowingawiderrangeofvoltageandfrequencyconditions,couldhelpalleviatechallengeswithinadvertentvoltageandfrequencytrips.SmartinverterscouldalsohelpmitigatethefrequencyimpactofDG.Smartinvertersmaybeabletoprovidefrequencysupport,oravoidtrippingofflineduringsomeunder/overfrequencyevents. 27 U.S. Department of Energy, “The Potential Benefits of Distributed Generation and Rate‐Related Issues that May Impede Their Expansion,” February 2007, p. 3‐11.



4.1.5 Voltage Regulation

Voltageregulationisacorefunctionofutilityoperations,andDGhasthepotentialtomakevoltageregulationsignificantlymoredifficultforutilities.Voltageistypicallycontrolledlocallyatthedistributionlevel.Addinggenerationonafeederthatnormallyservesloadwillincreasethevoltageatthepointofinterconnection.IftheDGissolar,wind,oranysortofvariableDG,therecouldbevoltagefluctuationsonthefeeder.Figure4‐2belowillustratesanintermittentsolarresource.ThevariabilityofsolarPVgenerationcanbequitehigh,particularlyonpartlycloudydays.

Figure 4‐2 Sample Solar Resource Data for One Day28

PassingcloudcoverandotherdisturbancescanaffectDGoutput,whichaffectsgridvoltage,andmayultimatelyimpactsystemoperationtriggeringprotectiondevices.AnNRELreport,ImpactofSolarSmartSubdivisionsonSMUD’sDistributionSystem,indicatedthatatlowPVpenetrationlevels,noadversevoltageregulationeffectswerefound;however,aspenetrationsincrease,aneffectmaybeseen.29ThevoltagefluctuationmayleadtovoltagesoutsideacceptablerangesimposedbytheCPUCRule2(ConservationVoltageRegulation–CVR)andIEEEstandards.Fluctuationinvoltagecancausewearandteartoelectricalequipmentownedbycustomersandutilities,andisviewedasanegativeimpactthatDGsystemscanhaveonthedistributionsystem.

Atcurrentpenetrationlevels,widespreadvoltageissueshavenotbeenobserved,buttheyareexpectedtooccurmoreoftenasmoreDGsystemsareinstalled.Basedoninterviewswithdistributionengineers,theIOUshaveobservedsomeinstancesofvoltageimpacts.SDG&Eindicatedtheyhaveexperiencedadversevoltagefluctuationonafeederhostingtwo1‐MWNEMsolarPVinstallations.OnaSCEfeeder,a400kWPVsystematfulloutputincreasedvoltageenoughtotriptheinverteroff;becauseofthis,SCEinstalledanewtransformerandchangedthetapsettingtohandlethevoltagefluctuationsatitsowncost.

28 M. Patsalides, A. Stavrou, G. Makrides, V. Efthimiou and G. E. Georghiou, “Harmonic Response of Distributed Grid Connected Photovoltaic Systems,” University of Cyprus, Nicosia, p. 3. 29 P. McNutt, J. Hambrick, M. Keesee, and D. Brown, “Impact of SolarSmart Subdivision on SMUD’s Distribution System,” National Renewable Energy Laboratory, Golden, CO, July 2009, p. 33.



SCEindicatedthattheyhaveobservedinstallationsexperiencingovervoltagesexceedingpermittedvoltagelevelsbyupto200percent.Theseovervoltagecasesarecausedbyaneffectreferredtoas“transientovervoltage.”ForDGsystems,thiseffectistemporaryandoccurswhenaPVDGsysteminverterdisconnectsduringlowloadconditions.Asaresultoftransientovervoltages,thePVsystem’sisolationswitchmayfailifnotsizedappropriately,andcustomerloadmaybeexposedtoovervoltages.SCEisworkingwithinvertermanufacturerstomitigatethisissueandestablishproperdesignprotocolsforDGPVsystems.

Similartofrequencycontrol,aDGsystemisrequiredtotripofflineduringanunder‐orovervoltageevent,perUL1741inverterrequirements.Losinggenerationcausesadecreaseinvoltage;thereforethetrippingofflineofDGsystemscanexacerbateanundervoltagesituation.

Somemitigationapproacheshavebeendevelopedorimplemented,forexampleloadtapchangersontransformershavebeenusedtomitigatevoltageissues.AllowinginverterstoprovideVArsupportorinstallingVArcontrollersisatechnicallyviableoption.However,thismaynotbepracticalforcustomer‐sideDGsystemsgiventheirsmallsizeanddistributedlocations,andthefactthatutilitiesdonotcurrentlyhavecontrolovercustomer‐ownedequipment.Changinginverterstandardstonotrequiredisconnectionduringtemporarylowvoltageeventsisamitigationapproachreferredtoaslow‐voltageride‐through(LVRT).In2008,GermanyrequiredLVRTonthedistributionsystem.30SDG&Eindicatedthatseveralvoltagemitigationapproachesaretechnicallyavailable,butthereislimitedresearchavailabletoindicatethebestapproach.InSection7.0,anapproachisdiscussedforastudytoexaminebestpracticesforaddressingthevariousvoltageandfrequencyimpactsofDGonthedistributionsystem.

4.1.6 Reverse Power Flow

AsDGpenetrationincreases,thelikelihoodofgenerationflowingbackontothedistributiongridincreases.Thisisoftenreferredtoas"reversepowerflow."ReversepowerflowcanpotentiallynegativelyimpactthecoordinationofDGinstallationswithexistingdistributionfeederautomatedprotectionfeaturesandotherequipment.

Distributionsystemsarenotgenerallydesignedtoaccommodatetheinterconnectionofwidespreadparallelgeneration.Rather,theyaredesignedtodistributepowerproducedfromcentralizedgenerationconnectedtothetransmissionsystem.Existingdistributionsystemsaregenerallydesignedtoaccommodatepowerflowoutofthedistributionsystemandmayhaveissueswithexcessivepowerflowingintothesystem.Examplesofissuesthatmightoccurinthissituationinclude:

Sometypesofequipment,suchasloadtapchangersthatregulatevoltage,maynotfunctioncorrectlyifelectricityisflowingoppositetheiroriginaldesign.

PVsystemsmaynotdetectfaultswithlowshortcircuitcurrentonthedistributionsystemandthereforemayremainconnectedtothedistributionsystem.ThismayinterferewiththedistributionsystemoperationasthePVsystemmaybefeedingthefaultandtherestofthedistributionsystemmaynotdetectthefaultasitotherwisewouldwithouttheDGPVsystem.

Networkdistributionsystems,whicharetypicallyusedinurbanareas,generallycannothandlesignificantpowerflowsintothesystem.Thisisbecausethereisadevicespecifically

30 J. Keller and B. Kroposki, “Understanding Fault Characteristics of Inverter‐Based Distributed Energy Resources,” National Renewable Energy Laboratory, Golden, CO, January 2010, p. 31.



usedfornetworksystemsthatinhibitspowerflowintothesystemforsystemprotectionreasons.31ThislimitsthesizeandamountofPVthatcanbeinstalledonthesystem.

OnespecificexampleofpotentialreversepowerflowimpactscomesfromlargerPVsystems(>20kW)thathaveasingle‐phaseoutputbecausetheyareinstalledonasingle‐phaseserviceatamulti‐familyhousingcomplex—thisoccasionallyhappenswithsystemsinstalledundertheMASHprogram.Becauseoftheirsize,systemsover20kWusuallyhaveathree‐phaseoutput.Butinsituationswhereasingle‐phaseoutputisrequiredbecauseofthelocation,thelargeamountofpowerthatmaybeexportedtoonlyoneofthethreephasesonthedistributionnetworkcouldcreateasignificantphaseimbalance.Distributionoperationscouldbenegativelyimpactedifthisweretooccur.

Theneteffectofreversepowerflowispossiblenegativeinteractionwiththedistributionsystem’sprotectionschemes,causingpartsofthesystemtogooffline.Thelevelatwhichreversepowerflowbecomesproblematicforutilitiesisnoteasilydeterminedwithasimplepercentageofcapacitypenetration;manyfactorsmustbetakenintoaccountsuchasmagnitudeofreversepowerflow,capacityoffeeder,relayandrecloser32settings,andlengthoffeeder.Tomitigatetheseissues,utilitiesmayreconfigureorredesigntheirprotectionschemes.Utilitieshaveindicatedthatthishasbeendoneonacasebycasebasistodate.

4.1.7 Operational Flexibility

AsDGpenetrationincreases,thecomplexityofthedistributionsystemincreasesandutilitiesmayhavelessflexibilitytooperatetheirsystem,potentiallynegativelyimpactingthesystem.Thedistributionsystemanditsassociatedprotectionschemes(protectiondevicesandthecoordinationbetweenthem)weredesignedtodistributeorsupplypowertoloads.Withgenerationsourcesspreadacrossthesystem,certainprotectionschemeswillhavetochange.DGbringsadditionalcomplexitytotheoperationandtroubleshootingofthedistributionsystemformanyreasons,includingthefactthattheinterconnectionpointmayactasagenerationsourceoraload.Furthermore,whenproblemsoccuronthedistributionsystem,itmaybemoredifficulttotroubleshootthem.Forthesereasons,itislikelythatutilitieswillhavelessflexibilitywiththeirsystem.Forexample,manydistributionsystemsareradialinnature,whichmeansthereisalonglinerunningfromthesource,andnoloopsorredundancy.IfaDGsystemcausesanissuewiththedistributionsystemsomewherealongthisline,requiringaportionofthelinetobeisolated,thentheutilitymayhavetodisconnecttheDGsystemandanythingbeyonditfromthemainsource.Thislimitonoperationalflexibilitymayreducethereliabilityofthedistributionsysteminsomecases.

4.2 TRANSMISSION SYSTEM RELIABILITY AND OPERATION Transmissionsystemimpactsfromcustomer‐sideDGinstallationsinstalledtodate,particularlythoseinurbanareaswithhigherload,arecharacterizedasminimalinthestudiesconductedbytheCPUCconsultantsandothers.AliteraturesurveyofthetopicrevealsthattheconclusionmostoftenadvancedisthattheissueshavenotbeenexperiencedattheselowlevelsofDGpenetration,butasthepenetrationlevelsgrow,issuesareexpectedtoappear.Theissuesdiscussedinthefollowingparagraphsareonesthatarelargelyanticipated,buthavegenerallynotbeenobservedontheIOUssystemsatthetimeofthisreport.Anticipatedissuesthatwilllikelyneedtobeaddressedastheyariseinclude:

31 M. Coddington, B. Kroposki, T. Basso, K. Lynn, M. Vaziri, T. Yohn, “Photovoltaic Systems Interconnected onto Secondary Network Distribution Systems – Success Stories,” National Renewable Energy Laboratory, Golden, CO, April 2009, p. 8. 32 Relays and reclosers are system protection devices used in distribution and transmission systems.



Transmissionsystemlinelosses

Reverseflowfromthedistributionsystemtothetransmissionsystem

Existingoperationalprocedures

Voltageregulation

Reliablecapacityandplanning

Capacitymargin

Systemstability

4.2.1 Transmission System Line Losses

Aswiththedistributionsystem,DGthatserveslocalloadswilloffsettheneedtoimportpowerthroughthetransmissionsystematthetimethattheDGsystemisproducingenergy.Thisshouldreducetransmissionlinelossesduringthosetimes,andisgenerallyviewedasapositiveimpactofDG.Atthepresenttime,theutilitiesandtheCAISOarenotroutinelyquantifyingthisbenefitandassociatingitwithDG.

4.2.2 Reverse Power Flows from the Distribution System

Reversepowerflows,asmentionedinthedistributionsystemsectionabove,canhavenegativeimpacts.ReversepowerflowscausedbyincreasedDGwouldlikelyoccurwhenDGoutputexceedsloadandtheexcessenergyflowsthroughthedistributionsystemtothetransmissionsystem.Thisisnotawidespreadissuetoday,butIOUengineersanticipatethatatsomelevelofDGpenetration,itmaybecomeaproblem.Whilethisreportspecificallyexaminespeakloadimpacts,theIOUengineersindicatedthattheywilllikelyseereverseflowissuesduringoff‐peakconditionswhentheirloadsareafractionoftheirpeakload,causingexcessenergyfromDGprojectstoflowbackontothesystem.Ifthisweretooccur,itwouldalsoimpacttransmissionoperationsproceduresandtheabilitytobalancesystemloadwithresources.Theimpactsofreversepowerflowonthetransmissionsystemaredifferentthanthedistributionsystem,partiallyduetothedifferentapproachestooperationofthedifferentsystems.Theliteraturesurveyedforthisreportdidnotrevealanyspecificstudiesthathavebeenconductedonthisissue.AnalysesconductedonDGimpactsonthetransmissionsystemhavefoundthatthelowlevelofDGpenetrationlimitsanyconclusionsthatcanbedrawnatthistime.33

4.2.3 Operational Procedures

MuchinthesamewaythatdistributionsystemoperatorswillhavetoadaptasDGpenetrationlevelsgrow,transmissionsystemoperatorswillalsoneedtoadapt,especiallyifactualenergyoutputdifferssignificantlyfromtheforecastedoutput.GridoperationmaybenegativelyimpactedbyboththevariabilityandtheuncertaintyofvariableDGresources.34Instancesofover‐generationhaverecentlyoccurredwithwindgeneration.Similarover‐generationwithsolarDGismostlikelytooccurinthemorningwhileloadsarelow,butshouldacloudpass,generationcandecreaseveryquickly.35SCADAhasbeenseenastooexpensivetoinstallformonitoringoutputfromsmallerDG

33 Itron, “Impacts of Existing Distributed Generation – Final report,” Prepared for CPUC Energy Division Staff, Davis, CA, January 2010. Pages 5‐8; 5‐13. 34 NREL, “Impact of High Solar Penetration in the Western Interconnection,” A Technical Report Prepared by NREL and GE Energy, Golden, CO, December 2010. Page 6. 35 California ISO, “Integration of Renewables Resources: Operational Requirements and Generation Fleet Capability at 20% RPS,” August 31, 2010. Pages 12‐18.



installations,sotheoutputistypicallynettedwithitsnativeload.Asaresult,minute‐by‐minutechangesinDGoutputcanappearasunexpectedincreasesordecreasesinload.Transmissionoperatorsmonitorsystemstatusaroundtheclock,andhaveproceduresformanagingspecificscenarios.ThesewouldneedtobeexpandedtoincludehowtomanageimbalancescausedbyincreasedDGonthesystemasthiswouldbeanewphenomenon.

4.2.4 Voltage Regulation

Voltageregulationissues,asmentionedabove,canhavenegativeimpactsonthesystem.VoltageregulationissuesonthetransmissionsystemasaresultofDGsystemadditionshasnotbeenidentifiedspecificallyinanyoftheliteraturereviewedforthisreport.InterviewswithIOUengineershaverevealedthatthisisnotanexistingissueonthetransmissionlevelsubstationbusesrelatedtocustomer‐sideDG,butitisexpectedtobecomeaprobleminthefuture.36TheDGpenetrationpointatwhichtheIOUengineersthinkthisissuewillmanifestonasystem‐widebasisisunknownatthistimeanditisonetheyhaveexpressedtheywouldlikestudiedandunderstood.

4.2.5 Reliable Capacity and Planning

WhileDGtechnologiesthatarenotvariablecanbereliedontoproducetheircapacityasexpected,mostDGinCaliforniaisPVwhichisnotforecastedinareliablewaytoday.Also,becausetransmissionexpansionplanslookattimehorizonsanywherefrom5to20yearsintothefuture,thequestionofwhatcapacitytoassumefortheseplansisstillatopicofdebate.WhiletechnicalanalyseshavefoundthatPVresourcescontributeupto30percentcapacityvalues,theISOusesacalculationthataveragespeakcapacitiesandusesthosevaluesasreliablecapacityinplanningstudies.37Resourceadequacy,theprocurementofsufficientflexibledemandorgenerationcapacitytomeetfutureloads,iscriticaltoloadservingentities.38Transmissionplannersaretaskedwithstudyingthebulkelectricsystemandidentifyingmitigationprojectsforanyissuesthatwillimpactreliableservicetoutilitycustomersunderpeakloadconditions.TheobligationtoserveacustomerremainswhetherornotthecustomerhasaPVsysteminstallation.Therefore,transmissionplannersassignavalueofzerototheseresourcestobeconfidentthattheyhaveadequateresourcesunderthecriticalpeakloadperiod.39AhigherconfidenceinPVforecasting,forinstance,wouldleadtomorecreditbeingattributedtoPVsystemsasreliablecapacity,apotentialpositiveimpactofDG.Also,athigherpenetrations,geographicdispersionwillprovidehighercapacityassurance.Inotherwords,manysmallsystemsoperatinginadispersedgridwillnotlikelyhavenegativeimpactsasgreataslarger,lessdispersedsystems.

Thereareongoingregulatoryactivitieswhichshouldprovidebettercertaintytothetreatmentofsolarorwindresourcesasdependableresourcesinthefuture.Inparticular,thereareproceedingsunderwayattheCPUCtoconsiderincorporatingflexiblecapacityinthe2014ResourceAdequacyprogram.ThatwouldincludepreparationandreviewofnewstudiesoftheeffectiveloadcarryingcapacityofwindandsolarresourcesinCalifornia.40

36 SCE indicated that larger wholesale DG systems do cause voltage regulation issues today. 37 NREL, “How Do High Levels of Wind and Solar Impact the Grid? The Western Wind and Solar Integration Study,” Technical Report, Golden, CO, December 2010. Page 10. 38 LBNL, “Mass Market Demand Response and Variable Generation Integration Issues: A Scoping Study,” Environmental Energy Technologies Division, Berkeley, CA, October 2011. Page 56. 39 IOU engineers interviewed for this report expressed that the obligation to serve customers is paramount. 40 CPUC Rulemaking 11‐10‐023, Filed October 20, 2011. Available online http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M031/K723/31723210.PDF , Accessed December 13, 2012.



4.2.6 Transmission Capacity Margin

Capacitymarginistheunusedcapacityontransmissionlinesbasedontheirratedcapacities.Typically,thiswasduetoload;however,asDGpenetrationincreasesonthesystem,theseadditionscouldpotentiallypositivelyaffectthemargins.ResearchandstudiesconductedontransmissionlineloadingandhowDGaffectsitduringpeakloadconditionshasgenerallyconcludedthattheeffectsareminimal.ThereasonisthatthesystempeakoccurslateintheafternoonatthetimewhenPVoutput,forexample,issharplydeclining.Theresultingeffecthasresembledloadshaving,butnotpeakloadshaving‐‐whichutilitiesgreatlyvalueforreducingtheneedlepeakinload.InterviewswithIOUengineershaverevealedthatratherthanareductioninflowsonlines,theyhaveseenanincreaseinflowswhenDGhasbeeninstalledwhereloadsareminimalornotpresent.Technicalanalysesconductedontransmissioncapacitiesshowedthatimpactsareminimaltoday,andnoconclusionscanbedrawnduetopresentlylowlevelsofDGpenetration.41

4.2.7 System Stability

Systemstabilityistheabilityofthebulkelectricsystemtostayintactbystayingsynchronizedandregainingequilibriumfollowingacontingencyonthesystem.Thisisespeciallyimportantinthefirstfewcyclesandsecondswhenautomaticgenerationcontrol(AGC)respondstothelossofgenerationortransmission.Astheproportionofvariablegenerationwithlimitedsystemresponsecapabilitiesincreasescomparedtolargeconventionalspinninggeneration,itislikelythatsystemstabilitymaybedecreased.InterviewswithIOUengineersidentifiedtheneedtoconductstudiestodeterminethelevelofpenetrationthatmayadverselyimpactsuchissuesassystemstability.

4.3 SIZE AND LOCATION DEPENDENT IMPACT OF DG Inadditiontoalloftheissuesmentionedabove,thesizeandgeographiclocationofaDGsystemareimportantfactorsthatmayaffectitsimpactonthetransmissionanddistributiongrid.Eachoftheseissuesisdiscussedseparatelybelow.

4.3.1 Size Impacts

ThesizeofaparticularDGsystem,relativetothedistributioncircuittowhichitisinterconnected,affectsgridoperationsforanumberofreasons.Allelsebeingequal,asmallersystemhasasmallerriskofhavingnegativeimpactsandcausinggridinstabilitythroughvoltageandfrequencyfluctuations,faults,trippingprotectionschemes,overloadingcircuitsorback‐feedingontothetransmissionsystem.FordistributedsolarPVandwindsystems,thevariabilityoftheiroutputcanbemorechallengingiftheyarelargerandareservingasignificantportionoftheloadonaspecificcircuit;inthatcase,asuddendroporincreaseinoutputwillhaveaproportionallylargerimpactongridoperationthanasimilarsystemofasmallersize.

However,itisimportanttonotethattheseimpactsalsovarybasedonthedistributioncircuit.DistributionengineersfromtheIOUsindicatedthatsomecircuitsmayhavethenecessarycharacteristicsandcapacitytoeasilyaccommodateasinglelargeDGsystem,whileothercircuitsmaybeunabletohandlemorethanasmallamountofDG.Also,theynotedthatthelocationoftheDGsystemalongtheradialdistributioncircuit—i.e.,whetheritisnearthesubstationorattheendoftheline—maybethemostimportantfactor,incombinationwiththeamountofloadintheimmediatevicinity.Overall,theseengineersagreedthatalargernumberofsmallDGsystemswouldhavelessofanegativeimpactongridoperationsthanasmallernumberoflargeDGsystems—with 41 Itron, “Impacts of Existing Distributed Generation – Final report,” Prepared for CPUC Energy Division Staff, Davis, CA, January 2010. Pages 5‐15.



thecaveatthatthereareexceptionsandeachcircuithasspecificcharacteristicsaffectingitsabilitytoaccommodateDG.

4.3.2 Location Impacts

ItiswellknownthatthegeographiclocationsofDGsystemsaffectgridoperations,andtherearetwomainreasonsforthis.First,clusteringofDGsystemsmayposechallengesbecausethosesystemswilltendtoresembleasinglelargeDGsystem,withtheattendantissuesdiscussedabove.Thoughthisisapotentialconcern,programmanagersforthecustomer‐sideDGincentiveprogramsateachIOUnotedthatclusteringisnotcurrentlyhappeningwithcustomer‐sidesystemstotheextentthatpresentsachallengeforgridoperations.Furthermore,theIOUshavealsoprovidedinterconnectionmapswhichdirectdevelopersofwholesaleDGinstallationstoareaswheregridimpactsmaybesmallerduetogreatersystemcapacityandlessexistingDG.

Second,geographicdisbursementofvariableDGresourceslikesolarPVandwindreducestheirshort‐termvariabilitywhenviewedcollectively.Thiseffectiswell‐documented,andtheimpactofgeographicdiversityonsolaroutputvariabilityisdiscussedinarecentstudybyLawrenceBerkeleyNationalLaboratory,aswellasarecentpaperbyCleanPowerResearch.42,43Asshownbelow,theoutputfromagroupof25PVsitesspacedoverawidegeographicareaisconsiderablylessvariablethantheoutputfromasinglesite.

Figure 4‐3 Solar Irradiance Variability – One Location vs. 25 Locations44

LookingatbothsizeandlocationimpactsofDG,theliteraturereviewandinterviewswithutilitypersonnelindicatethatalargenumberofsmallDGsystemsspreadoveralargegeographicareawouldgenerallyhavelessofanegativeimpactongridoperationsthanasmallnumberoflargeDG

42 A. Mills and R. Wiser, “Implications of Wide‐Area Geographic Diversity for Short‐Term Variability of Solar Power,” Lawrence Berkeley National Laboratory, Berkeley, CA, Sept. 2010. 43 T. Hoff and R. Perez, “Modeling PV Fleet Output Variability,” Submitted to: Solar Energy, 2010. 44 T. Hoff, “Advanced Modeling and Verification for High Penetration PV,” DOE High Penetration Solar Forum, San Diego, CA, March 2011.



systemslocatedincloseproximitytoeachother.ThisistrueforanytypeofDGtechnology,butisespeciallytrueforvariableresourceslikesolarandwind.Whiletheseprinciplesmayholdtrue,asdiscussedintheBarrierssection(Section5),therearecurrentlynoincentivestositeDGinamannertominimizenegativeimpactsonthegrid.

4.4 PEAK DEMAND IMPACT ANALYSIS ThissectiondescribestheimpactofinstalledDGcapacityonthepeakelectricdemandoftheCaliforniaIndependentSystemOperator(CAISO)systemin2011.

Peakdemandreferstothetimeofdayandwhenelectricloadonthegridisgreatest,usuallymeasuredonadailyorannualbasis.In2011,theannualpeakdemandontheCAISOgrid,whichservestheterritoriesofPG&E,SCE,andSDG&E,was45,569MWandoccurredat4:30pmonSeptember7th.SincethisstudyanalyzesCAISOloadandDGgenerationonanhourlybasis,the“peakhour”intermsofCAISOdemandwasbetween4and5pmonSeptember7th,2011.

Inestimatingtheimpactofthetotalamountofcustomer‐sideDGcapacityoperatingontheCAISOgridduring2011peakdemandperiod,twoseparateapproachesweretakenforsolarPVandnon‐solarinstallations.TodeterminetheimpactofsolarPVcapacityduringthesystempeakdemand,Black&VeatchdevelopedamethodologythatutilizedactualmetereddatafromalargesamplingofsolarPVsystems.ThisanalysiswasundertakeninplaceofaCSIImpactEvaluationfor2011,inwhichpeakdemandimpacthasbeenreportedinpreviousyears.ThedetailsofthemethodologyanddatasourcesusedaredescribedinAppendixB.

Black&VeatchreliedondatafrommultiplesourcestodeterminethetotalamountofDGcapacityoperatingduringthe2011peakhour.

ForsolarPV,actualproductiondataforalargesetofoperatingPVsystemswasused.TheCPUCcollects15‐minuteintervalproductiondatafrommetersonhundredsofsolarPVsystemsinstalledundertheCSI(bothEPBBandPBI)andSGIPprograms.TheproductiondatawasusedtorepresenttheproductionprofileofallPVinstallationsintheIOUterritoriesforcalculatingthepeakdemandimpactofsolar.TheanalysisdidnotincludetheinstallationsfromthePOUSB‐1programs.Foradetaileddescriptionofthemethodologyemployed,refertoAppendixB.

Fornon‐solartechnologies,Black&Veatchusedthe“CPUCSelf‐GenerationIncentiveProgramEleventh‐YearImpactEvaluation”preparedbyItroninJune2012.Thestudyreportedthepeakdemandcapacityfactorsfornon‐solarSGIPgenerationincludingfuelcells,microturbines,gasturbines,andinternalcombustionengines(separatedbyrenewableandnon‐renewablefuels).ThesecapacityfactorswerethebasisforcalculatingtheamountofgenerationfromthesetechnologiesduringtheCAISOpeakdemandin2011.Nopeakhourcapacityfactorswereprovidedinthereportforwindturbinesoradvancedenergystoragesystems,sincemetereddatawasnotavailableforthesetechnologies.

TheoverallcontributionofDGinstallationsforthepeakdemandday,bothsolarPVandnon‐solar,ispresentedinFigure4‐4andFigure4‐5intermsoftotalMWoperatingineachhour.ThesefiguresdisplaysimilarinformationwiththedifferencebetweenthembeingthatFigure4‐5showsthedisaggregatedimpactofeachprogramonaseparatescalethantheCAISOload.Figure4‐6showsthehourlycapacityfactorforallDGonthepeakdemandday.



Figure 4‐4 Impact of Customer‐Side DG on CAISO Demand on September 7th, 2011

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Figure 4‐5 Operating DG Capacity by Program and CAISO Demand on September 7th, 2011

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Figure 4‐6 Hourly DG Capacity Factors by Program and CAISO Demand on September 7th, 2011

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Overall,thepeakdayprofileofsolarPVshowsthatsolarPVhasasmallbutsignificantimpactontheCAISOgridatmid‐dayandalesssignificantimpactduringtheactualpeakdemandperiod.Thenon‐PVtechnologieshavearelativelyconstantgenerationprofileandthereforeamoreconsistent—thoughsmaller—impactonCAISOdemandthroughouttheday.

ThetotalpeakdemandimpactofinstalledDGontheCAISOgridduringthe2011peakdemandperiod(4to5pmonSeptember7th)was335MWandwasapproximately0.7percentofCAISOload.TotalinstalledDGcapacityontheCAISOgridonthisdatewas1,136MW,ofwhich892MWwassolarPV.ThedetailedresultsareshowninTable4‐1below,brokendownbytechnology.

Table 4‐1 Peak Demand Impact by Technology

TECHNOLOGY MWINSTALLEDPEAKHOURCAPACITY

FACTORPEAKDEMANDIMPACT

(MW)

SolarPV 892 0.25 227

Wind* 12 0.00 0

RF

FC 23 0.84 19

MT 4 0.08 0

GT 0 0.00 0

IC 12 0.49 6

Non‐RF

FC 17 0.54 9

MT 17 0.39 7

GT 31 0.83 26

IC 128 0.32 41

AES* 2 0.00 0

Total 1,136 0.29 335

*NoproductiondatawereavailableforWindandAESinstallations,sotheywereassignedacapacityfactorofzero,i.e.theywereassumedtohavenoimpactonpeakdemand.SeeAppendixBfordetails.RF=RenewableFuels;Non‐RF=Non‐RenewableFuels;FC=FuelCells;MT=Microturbines;GT=GasTurbines;IC=InternalCombustionEngines;AES=AdvancedEnergyStorage

Basedontheseresults,Black&VeatchfoundthatdistributedsolarPVcontributesabout25percentoftotalinstalledcapacityduringthe2011CAISOpeakdemandperiod.SolarPVgenerationtendstopeakaroundmid‐day,whileCAISOdemandtendstopeakmidtolateafternoonwhensolarPVoutputisdeclining,asisclearinFigure4‐5andFigure4‐6above.Thus,thehighestPVdemandimpactwasbetween12pmand1pm,whendistributedPV(plusotherDG)provided728MWofcapacityandaccountedfor1.8percentofCAISOload.ThesolarPVcontributionatthetimeof



CAISOpeakdemandisaboutaquarteroftheinstalledcapacityratingofPV;allDGaccountsfor0.7percentofCAISOpeakloadfrom4pmto5pm.

AccordingtoBlack&Veatchestimates,DGsolarPVachievesanhourlycapacityfactorof0.25duringtheCAISOpeakdemandhour(4‐5pmonSeptember7th)in2011.The2010Reportestimatedanhourlycapacityfactorof0.65forallDGsolarPVoperatingduringtheCAISOpeakdemandhour(3‐4pmonJune20th)in2008,andthe2010CSIImpactEvaluationreportestimatedanhourlycapacityfactorof0.56forallDGsolarPVoperatingduringtheCAISOpeakdemandhour(3‐4pmonAugust25th)in2010.Theestimatefor2011issignificantlylowerduetoanumberoffactors.First,theCAISOpeakdemandcamelaterinthedayin2011thanin2010and2008—4to5pminsteadof3to4pm—whenPVsystemsareproducinglessenergybecauseitisclosertosunset.Also,theCAISOpeakdemandoccurredlaterintheyearin2011thanin2010and2008,whichagainmeansthatPVsystemsareproducinglessenergy;thesunisclosertosettingat4pminSeptemberthanitisat4pminJune.Finally,itispossiblethatthepeakdemandhourin2011mayhavebeencloudierthanthepeakdemandhourin2010and2008.AllofthesefactorsresultinalowersolarPVcapacityfactorthaninpreviousyears.

Black&VeatchacknowledgesthattherearelimitationstoonlyestimatingtheimpactofDGonCAISOpeakdemand.CAISOandeachIOUhavetoplanforpeakdemandatavarietyoflevels(customertransformer,distributionfeeder,distributionsubstation,subtransmissionnetwork,transmissionsubstation,transmissionline,theutilitysystem,andtheentireCAISOsystem)andthisreportdoesnotattempttomodeltheimpactofDGateverylevel—althoughthatmaybeausefulexercise.Rather,thisreportseekstoshowthemagnitudeofDGoutputrelativetothetotalCAISOloadbecausethisgivesageneralsenseofhowmuchDGcontributestostatewidepeak.FuturestudiesshouldconductanalysisofDG’speakdemandimpactatotherlevelsbecausetheimpactislikelytobedifferentatlowerlevelsthanattheCAISOlevel.

TheIOUsarealreadyconductingsomeresearchintotheimpactofDGatthedistributionfeederlevel,inordertobetterunderstandtheseimpactsandhowtheymightchangeaspenetrationincreasesinthefuture.Inparticular,SCEconductedastudyinOctober2012toassessthepeakdemandimpactofcustomersolarPVonresidential(Figure4‐7)andnon‐residential(Figure4‐8)feederswithabove‐averagePVpenetrationrates.Asshowninthefigures,PVoutputpeaksaround1pminallcases,whileloadpeaksaround7pmontheresidentialfeederandaround3pmonthenon‐residentialfeeder.Whilethesearejustselectedexamples,thisanalysisshowsthatwhilePVcanhaveasignificantimpactintermsofreducingpeakdemandonanon‐residentialfeeder,butithasalmostnoimpactonaresidentialfeeder.ResultslikethisprovethevalueofexaminingDGimpactsatthelevelofindividualdistributionfeeders,becauseitbecomesapparentthattheimpactsofDGdependatleastasmuchonthelocalizedcharacteristicsofthedistributionsystemasonthecharacteristicsoftheDGsystemitself.



Figure 4‐7 Peak Demand Impact of Solar PV on Typical SCE Residential Distribution Feeder45

45 “Coincidence of Solar Production with SCE’s System Load and Distribution Circuits,” SCE Load Research, Oct. 2012, p. 3.



Figure 4‐8 Peak Demand Impact of Solar PV on Typical SCE Non‐Residential Distribution Feeder46

Additionalstudiesinthisareaofpeakdemandimpactarewarranted,evenbeyondtheanalysisofpeakdemandimpactatlevelsotherthantheentireCAISO.TheCPUCdatasetcontaining15‐minutemeteredproductiondataforCSIandSGIPsystemsisverylargeandrich.Thepeakdemandimpactanalysisperformedhereisasimpleexampleofitsuse.PreviousCSIImpactEvaluationreportshaveperformedotheranalysesthatwerebeyondthescopeofthisreport,buttherearestillmanypossibleusesforthedatathathavenotbeenfullyexploredtodate.Thesecouldinclude:

ExtrapolationofresultstodetermineimpactsathigherDGpenetrations

AssessmentofNEMsystems’impactonloadshapeandconsequentialpeakshifting

Analysisofnon‐peakperiodsincludingidentificationofperiodsofmaximumDGexport

CalculationofEffectiveLoadCarryingCapacity(ELCC)ofdifferentDGsources.ELCCrequiresastatisticalprobabilityanalysisofpreferablymultipleyearsofcoincidentloadandgenerationdatatodeterminethecapacityvalueofdifferentgenerationsources.

Analysisoftheimpactsofwest‐facingversussouth‐facingPVsystemsonloadshape

Assessmentoftheeffectsofdecommissioningandperformancedegradationontheresults

46 “Coincidence of Solar Production with SCE’s System Load and Distribution Circuits,” SCE Load Research, Oct. 2012, p. 5.



Comparisonandvalidationofdifferentforecastingtechniques

Analysisofshort‐termvariabilityofPVoutputbygeographiclocation,systemtype,etc.

Analysisofhowmuchshort‐termvariabilityisreducedbycombiningoutputfromPVsystemsspreadoverawidegeographicarea


BLACK & VEATCH | Issues and Barriers Impacting DG Deployment 5‐1

5.0 Issues and Barriers Impacting DG Deployment TherateofDGinstallationsontheCaliforniagrid,inparticularsolarPVsystems,hasincreasedsignificantlyoverthepastseveralyears.Thisincreasecanlargelybeattributedtofinancialandregulatoryincentives,theavailabilityofnewleasingandfinancingoptions,thedeclineinsolarPVcostsglobally,andincreasedmarketingefforts.Inmanyrespects,CaliforniahasledthenationinidentifyingandremovingbarrierstoDGdeployment.InitiativessuchasimplementationofNEM,reformofRule21,andcompletionofon‐linetoolsforrebateprocessinghaveallowedCaliforniatosuccessfullyadvancethelargestDGmarketintheU.S.California’ssuccesshasbeenamodelforotherstatesinimplementingtheirownDGprograms.

DespiteCalifornia’ssuccess,therearestillbarrierstoadditionaldeploymentofDG.Thesebarriersexistfromboththeutility’sperspectiveandthecustomerand/ordeveloper’sperspective.Moreover,thereareanumberofissueswhichaffectDGdeploymentandmeritdiscussion,butarenotactuallybarriers.BarriersinthisreportaredefinedasthosethingswhichdirectlyinhibitgreaterdeploymentofDG—asopposedtoissues,whicharedefinedhereasthosethingswhichaffectbutdonotnecessarilyinhibitit.Thissectionaddressesbothbarriersandissues.

Itron’s2010Reportidentifiedpotentialbarriersrelatedtopolicy,technicalbarriersrelatedtoRule21,distributionsystemunknownswithincreasedpenetration,anduncertaintyaroundenvironmentalrequirementsforDG.Inthisreport,Black&Veatchprovidesanupdateanddiscussionofadditionalissuesandbarriers.ThesearelistedinTable5‐1bycategory,alongwithwhethereachisanissueorabarrier,andwhethereachisconsideredakeyissueorbarrier.

Thefollowingsectionsaddresseachofthesecategories,andalsoprovideaprioritizedlistofthekeyissuesandbarriers.Itshouldbenotedthattheidentificationofabarrierorissueinthisreportdoesnotnecessarilyimplythatitshouldbe,orevencouldbe,addressed.Manybarriershavealreadybeenreduced(suchasinterconnectionissues),andsomearelargelyoutsidethecontrolofthestate(suchashighequipmentcosts).Asnotedintheintroductiontothissection,California’sDGmarketisthelargestinthecountry,andalreadyhasmademuchprogressinaddressingmanyofthelargerbarrierstoDG.



Table 5‐1 Issues and Barriers Impacting DG Deployment

CATEGORY/TOPIC ISSUEORBARRIER? KEYISSUEORBARRIER?

FinancingandEconomics

FinancialIncentives Issue

AccesstoFinancing Barrier

EquipmentCosts Barrier

SoftCosts Barrier

PolicyandRegulatory

IncentivestoLocateDGinBeneficialAreas Issue

RateStructures Issue

EquitableAllocationofCosts Issue

RegulatoryMandates Issue

GridAccessandInterconnection

BarrierstoDGInterconnection Barrier

Integration

Monitoring,Forecasting,andControl Barrier

ModelingToolsforIntegrationofDG Issue

DistributionSystemDesign Issue

InverterStandards Issue

Miscellaneous

ProcessingTimesandCustomerUnderstanding Issue

AllocationofFunds Issue

MultiplePrograms Issue

AvailabilityofInstallers Barrier

MarketingandConsumerEducation Barrier

ForecastingofFutureInstallations Issue

ProjectSiting Barrier



5.1 FINANCING AND ECONOMICS Perhapsthemostimportantbarriertocontinuedcustomer‐sideDGdeploymentistherelativelyhighfinalcosttocustomers.ThevariousincentivesandprogramsavailableforinstallationofDGsystems(describedinSection3.2.1)haveencouragedwidespreadgrowthofDGthroughoutCalifornia.However,intheabsenceofsubsidies,mostDGtechnologiesarecurrentlyunlikelytobecompetitivewithgridpower.

SeveralfactorscontributetotheultimatecostofDGtocustomersincludingfinancialincentives,accesstofinancing,equipmentcosts,and“soft”costs.

5.1.1 Financial Incentives

BecauseoftherelativelyhighinitialcostofDGtechnologiescomparedtogridelectricity,andbecausepublicpolicyinCaliforniaandnationwidehasshownsignificantsupportforDG,financialincentivesarethemostimmediateanddirectmethodofreducingthecostofDGandincreasingitsdeployment.AtthestatelevelinCalifornia,therearenumerousprogramswhichprovidefinancialincentivesforDG,asdescribedinsection3.2.1.TheNEMtariffisalsoasignificantfinancialbenefitforcustomer‐sideDG,becauseitallowscustomerstobecreditedforgeneration(uptotheirannualconsumption)attheretailrate.Atthefederallevel,themainfinancialincentiveforDGistheinvestmenttaxcredit(ITC),whichprovidesataxcreditofupto30percentoftheinstalledcostforcustomerswhoinstallsolarPV,windorfuelcells,and10percentforthosewhoinstallmicroturbinesorCHPsystems.47

Giventhecurrentlevelsoffinancialincentivesofferedbystateandfederalgovernment,amajorissueforfutureDGdeploymentisthelimited,declining,orexpirationofstateandfederalfundingofincentives.48First,fundingformanyofthestateincentiveprogramsislimited,whichdeterslaterDGcustomersifdemandforincentivesoutpacesavailabilitybeforeaprogramends.Second,programfundingmaydecreasebecauseofoutsideinfluences(e.g.governmentspendingcuts),orper‐unitpaymentstocustomersmaydeclinewithgreaterparticipation.ThislattermechanismisactuallypartofthedesignofprogramssuchasCSI,becausetheyassumethatDGcostswilldecreaseasmoreisinstalledandthatincentivelevelsperkWcandecreaseaccordingly.

Third,manycurrentstateandfederalincentivesaresettoexpireatspecificpointsinthefuture,whichisanissuebecauseoftheuncertaintyitcreateswithintheindustry.Thefederalproductiontaxcredit(PTC)andinvestmenttaxcredit(ITC)forwindwasallowedtoexpireattheendof2012,butwasthenextendedforjustoneyearaslongasconstructionbeginsbeforetheendof2013.Similarly,biomassexpiresin2013andPVexpiresin2016.TheCSIisalsosettoendin2016.49Otherincentiveprogramsfaceexpirationdatesaswell.Duetothepoliticalnatureoftheseprograms,itisnotknownifanyofthemwillbeextendedpasttheirexpirationdate,andiftheyareextendeditisnotknownhowincentivelevelswillchange.Anendorsignificantchangetothesegovernmentincentives(especiallytheITC)wouldlikelyreduceDGdeploymentsincethefinalcostofDGtothecustomercouldabruptlyincreaseandalargeportionofDGprojectsmightnolongerbeeconomic.Thus,alackoffinancialincentivesisoneofthemostimportantpotentialissuesforDGdeployment,andalsoperhapsthemostvisibleissuetocustomers.

47 http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US02F&re=1&ee=1 48 Energy and Environmental Economics, “California Solar Incentive Cost‐Effectiveness Evaluation,” Prepared for: California Public Utilities Commission, San Francisco, CA, April 2011, p. 10. 49 The CPUC has recently begun a market transformation study to determine what the market for customer‐side solar PV will look like post‐CSI.



5.1.2 Access to Financing

DGinstallationsgenerallyinvolvelargeupfrontcosts,andinthecaseofrenewableDGlikesolarPVandwind,theinitialcapitalcostisessentiallytheonlycost(exceptforasmallamountofmaintenanceoverthelifetimeofthesystem).FormostcustomersinterestedininstallingDG,thislargeupfrontinvestmentisabarrierbecausetheymaynothavetherequiredamountofcashimmediatelyavailabletopayforthesystem,anditismuchsimplerandeasiertocontinuepayingtheircomparativelysmallmonthlyelectricbill.ThismayhappendespitethefactthatinmanycasestheycouldpotentiallysavemoneyoverthelongtermwithaDGsystem.

However,overthelastfewyearstheavailabilityofthirdpartyleasingandfinancingoptionsforsolarPVhashelpedtosignificantlyalleviatethisbarrierandhasallowedlessaffluentcustomerstodeploysolarPV.50CompaniesofferingthesethirdpartyfinancingoptionsoftenallowcustomerstoinstallPVwithlittleornoupfrontinvestment,allowingthemtosimplypayamonthlychargelessthantheirpre‐existingelectricbill.Theprevalenceofthesethirdpartyarrangementshasincreasedconsistentlyanddramaticallyinthelastfewyears,asmeasuredbyapplicationstotheCSIprogram,fromabout10percentofCSIapplicationsin2007to68percentin2012.51Thistrendisespeciallystrongamongresidentialcustomers.Figure5‐1showstheincreasingrateineachyearsincetheCSIprogrambeganin2007throughSeptember2012.

Figure 5‐1 Percentage of PV Systems with Third‐Party Ownership in CSI, 2007‐2012

Despitetheriseofleasingandotherinnovativefinancingarrangements,accesstofinancingisstillabarrierformanycustomers.Leasingcompaniesprefercustomerswithhigherelectricitybillsandgoodcredit,whichtendtobemoreaffluentcustomers.Forexample,toqualifyforalease, 50 E. Drury et al., “The Transformation of Southern California Residential Photovoltaics Market Through Third‐Party Ownership,” National Renewable Energy Laboratory, Golden, CO, Jan. 2012. 51 Based on Black & Veatch analysis of the CSI Working Data Set, available at www.californiasolarstatistics.org/current_data_files.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012

Third‐Party Ownership (%

of All Applications)



customersofonesolarleasingcompanymusthaveaFICOcreditscoreofatleast700.Justoverhalfofthepopulationhadascorethathighin2011.52Whileotherfinancingstructuresareavailable,theydonotoffertheattractivemonthlypaymenttermswithnoupfrontcosts.

5.1.3 Equipment Costs

FinancialincentivesfrompublicprogramsandnewfinancingoptionscanhelptoreducethecostofDGtocustomers,buttheinitialcostoftheequipmentitselfisalsoamajorfactorinthiscostandcanbeabarrier.Asmentionedabove,theunsubsidizedcostsforDGremainhighrelativetothecostofgridelectricity;althoughinsomecasesthecostofDGequipmentisdecliningbecauseofincreasingadoption,improvingeconomiesofscale,andtechnologicalinnovation.ThecostofsolarPVmodules,inparticular,hasdecreasedsignificantlyinthelastfewyears,asshowninFigure5‐2below.Butevenwiththesedeclines,DGequipmentcostsarestilloneofthelargesteconomicbarrierstogreaterDGdeployment.

Figure 5‐2 Solar Module Prices from December 2001 – March 201253

5.1.4 Soft Costs

InadditiontoDGequipmentcosts,thetotalcostofinstallingaDGsystemincludesanumberoflesstangibleor“soft”costcomponents,whichinmanycasescanbejustassignificantasthe“hard”costsforthephysicalequipment.Softcostsincludeanypermittingfees,administrativecosts,financingandcontractingcosts,designandengineeringcosts,customeracquisitioncosts,incentiveapplicationfees,interconnectionfees,taxes,aswellasthecostsassociatedwithprojectdelaysdue

52 FICO, “FICO® Scores Shift During Recession,” http://bankinganalyticsblog.fico.com/2011/09/fico‐scores‐shift‐during‐recession.html, accessed September 2012. 53 Solarbuzz, PV Module Price Index, available at: http://www.solarbuzz.com/facts‐and‐figures/retail‐price‐environment/module‐prices, accessed September 2012.



topermittingorinterconnectionissues.DGprojectsinCaliforniamustusuallyobtainapprovalfrommultipleentitiesorjurisdictions,includingtheutilitytowhichtheyareinterconnecting,theincentiveprogramtowhichtheyareapplying,thelocaljurisdictionwhichmustinspectthemforpublicsafetyreasons,andpossiblyotherentitiesaswell.

AsequipmentcostsforPVhavedropped,softcostshavestayedrelativelyconstant,thusincreasingtheirshareoftheoverallcosts.ThesesoftcostscanconstitutealargeportionoftotalDGsysteminstalledcosts,andthereforeareabarriertoDGdeployment.LawrenceBerkeleyNationalLaboratoryreleasedastudyinSeptember2012comparingtheinstalledcostsofresidentialrooftopsolarPVinstallationsintheU.S.andGermany.54ThestudyfoundthataverageinstalledcostsperwattinGermanyin2011were45percentlowerthanintheU.S.,mostlyattributabletosoftcosts.Moreover,inGermany,softcostsaccountedforjust20percentoftotalinstalledcosts,whileintheU.S.theyaccountedforover50percentoftotalinstalledcosts.Thestudyexploresanumberofexplanationsforthisdifference,andindicatesthatthemainsoftcostbarriersforgreatersolarPVdeploymentintheU.S.relativetoGermanyinclude:

SmalleroverallsolarPVmarket

Smalleraveragesystemsize

Slowerprojectdevelopment/installationprocess

Highernet‐profitmarginsforinstallersduetolesscompetition

HighersystemsalespricesduetomoregeneroussubsidiesandhigherPVsystemoutput

Highercustomeracquisitioncosts,includingsystemdesigncostsandmarketingandadvertisingcosts

Higherlaborhourrequirementsforpermitting,interconnection,andinspection

Higherpermittingandinterconnectionfees

HighersalestaxesonPVsystems

Manyattemptshavebeenmadeatalllevelsbytradeassociations,localpermittingauthorities,utilities,stateagencies,legislators,andadvocacygroupstoreducesoftcosts,withvaryinglevelsofsuccessdependingonthejurisdiction.ThemostsignificanteffortinthisareaistheU.S.DepartmentofEnergy’sSunshotInitiative,whichisseekingtoreducetheinstalledcostofsolarPVby75percentbetween2010and2020.Thisincludesacomparabledecreaseinsoftcosts,andtheinitiativehasalreadyfundedmultiplestudiesandprojectsinCalifornia.55

5.2 POLICY AND REGULATORY Somecurrentgovernmentalpoliciesandregulationscanaffecttheproliferationofcustomer‐installedDG.Theseissuesarelistedbelow,andfurtherdescribedinthefollowingsubsections.

LackofincentivestolocateDGinareaswiththegreatestbenefittothegrid

CertainratestructuresprovidedifferingincentivestoDG

Equitableallocationofcostsandbenefits

54 J. Seel, G. Barbose, R. Wiser, “Why Are Residential PV Prices in Germany So Much Lower Than in the United States?: A Scoping Analysis,” Lawrence Berkeley National Laboratory, Berkeley, CA, Sept. 2012. Available at http://eetd.lbl.gov/ea/emp/reports/german‐us‐pv‐price‐ppt.pdf. 55 http://www1.eere.energy.gov/solar/sunshot/nonhardware_bos.html



Regulatorymandates

Itshouldbenotedthatchangesoradditionstopoliciesandregulationswillrequireresearchandclosecollaborationbetweenutilities,industry,andregulators.

5.2.1 Incentives to Locate DG in Beneficial Areas

Fromtheoutset,someofthekeybenefitsofdistributedgenerationhavebeenassociatedwiththeirabilitytobelocatedinareaswheretheycanreducepeakdemand,reducelinelosses,anddeferdistributionandtransmissionsystemupgrades.However,therearecurrentlyverylimitedincentivesprovidedtoDGsystemownersanddeveloperstoactuallysiteDGintheseareas.Instead,DGinstallationsareprimarilydrivenbyotherfactorssuchashostsiteeconomics,landavailability,permitting,andresourcequality.Duetotheseoverridingconsiderationsandthelackofincentives,DGisnotbeingoptimallylocatedonthedistributionsystemandmanyofthepotentialbenefitsarenotfullyrealized.Infact,largerDGsystemsroutinelyarefacedwithdistributionsystemupgradecosts–notbenefits.

AsstatedinareportpublishedbyRockyMountainInstituteandPG&EinMarch2012,“DGthatisatthe‘rightplaceattherighttime’willcreatethegreatestvalue,whileadditionalelectricitysupplyinthewrongplaceatthewrongtimecouldresultinaddedcoststothesystem.”56

ThelackofincentivestolocateDGinareaswiththegreatestbenefittothegridisanissuesimpactingcosteffectivedeploymentofDG.IfCaliforniadoesnotprioritizebeneficialsitingofDG,thencoststoachievethestate’sDGgoalsarelikelytobehigherandbenefitstoconsumersarelikelytobelower.

5.2.2 Rate Structures

Utilityratestructurescanhaveasignificantimpactonthecost‐effectivenessofcustomer‐sideDGinstallations.InsomecasestheymaybefavorabletotheinstallationofDG,whileinothercasestheymaydeterDG.Asaverysimpleexample,customerswhopayhigherratesaremorelikelytosavemorefromDGinstallation.Whilethesecustomersbenefitfromthegreatersavings,totheextentthereisacostshiftassociatedwithcurrentnetenergymeteringpolicy,othercustomerswillabsorbthosecosts(seenextsection).Ratedesigncanthusaffect(1)thedeploymentofDGinCalifornia,and(2)impactnon‐DGcustomersandtheutilities’abilitytorecovercostsofservice.Itshouldbenotedthattheintentofthissectionisnottoassesswhethercertainratedesignsshouldbeencouragedordiscouraged.Itisbeyondthescopeofthisreporttoaddresstheimpactofutilityratestructuresonthecost‐effectivenessofcustomer‐sideDG.57TheexamplesmentionedherearesimplymeanttoillustratespecificwaysinwhichdifferentratestructurescanaffectDGdeployment.

ImpactofRateStructureonDGDeploymentRatestructures,whichareslightlydifferentforeachIOU,determinehowautilitycustomerischargedforelectricityusage.ForresidentialcustomersoftheIOUsinCalifornia,therearemultipleratetiers:uptoacertainamountofusage,onerateischarged,andthenahigherrateappliestousageuptothenextthreshold,etc.Figure5‐3showsPG&E’sresidentialratetierstructureasan

56 “Net Energy Metering, Zero Net Energy, and the Distributed Energy Resource Future: Adapting Electric Utility Business Models for the 21st Century,” Rocky Mountain Institute, Snowmass, CO, March 2012. 57 The CPUC has opened a rate design rulemaking to comprehensively examine utility rate structures. Order Instituting Rulemaking on the Commission’s Own Motion to Conduct a Comprehensive Examination of Investor Owned Electric Utilities’ Residential Rate Structures, the Transition to Time Varying and Dynamic Rates, and Other Statutory Obligations, R.12‐06‐013, Issued June 21, 2012.



example.CustomersinthehighesttierpayamuchhigherrateperkWhthancustomersinthelowertiers.Asshowninthefigure,atalmost$0.35/kWh,theTier4rateisaboutthreetimeshigherthantheTier1rate.Thus,high‐usagecustomershavegreatereconomicincentivetopursueDGoptionsthancustomersinlowertiers.Iftheresidentialrateswerestructureddifferently—e.g.iftheper‐kWhratewerethesameforallcustomersregardlessofusage—theadoptionrateofDGbyvarioustypesofcustomerswouldlikelybedifferent.Intoday’sratestructure,thelowerratepaidbycustomersinthelowertiersmaybeactingasadeterrent,ifsuchcustomersmaybeinterestedininstallingDGbutarenotabletojustifyitcomparedtotheirlowper‐kWhrate.Ofcourse,equalizingthetierswouldalsoruncountertootherpolicygoals,suchasencouragingenergyefficiency.

Figure 5‐3 PG&E Residential Rate Tier Structure (January 2012)58

Forcommercialandindustrialcustomers,thesituationismorecomplicated.Inadditiontotheper‐kWhenergychargetherealsocanbea“demandcharge”paidbasedontheindividualcustomer’speakdemand.Thepeakdemandismeasuredasthehighestaverageusageovera15‐minuteperiodoutofthemonth.Placingachargeonpeakdemandismeanttocoversomeofthecostsoftheinfrastructuretoservethesecustomers;italsogivestheselargercustomersanincentivetoreducetheirpeakdemand.Thedemandchargecanbeasignificantportionofthecustomer’selectricbillifthecustomerhashighpeakenergyuse.

AccordingtoCCSE,thedifferentnon‐residentialtariffsfortheIOUsshiftvaryingamountsofthecustomer’soverallcostsbetweenthedemandchargeandtheper‐kWhcharges,butPG&EandSCE

58 “Net Energy Metering, Zero Net Energy, and the Distributed Energy Resource Future: Adapting Electric Utility Business Models for the 21st Century,” Rocky Mountain Institute, Snowmass, CO, March 2012.



havetariffsthatshiftmorecoststotheper‐kWhchargethanSDG&E.59ThismeansthatcommercialcustomersinSDG&EterritoryhavelessofaneconomicincentivetoinstalldistributedsolarPV.Eventhoughtheymaybeabletoreducetheirper‐kWhcostswithPV,theystillhavetopayarelativelylargerdemandcharges(comparedtoPG&EandSCEterritories)whichDGmaynothelptoreduce,sincePVmaynotpeakwhenthecustomer’sdemandpeaks.Aswiththeresidentialratetiersmentionedabove,iftherelativedistributionofdemandchargesandkWhchargeswereadjustedforcommercial/industrialIOUcustomers,thentheadoptionofDGwouldlikelychange.

Figure5‐4showstheimpactthatdifferentratestructurescanhaveonelectricbillsforcustomersinSDG&E’sterritory.Thechartshowscomparesexamplesofmonthlybillsforacommercialcustomerunderthreescenarios:

“BillsBeforePVInstallation”showsatypicalbillinghistoryforacommercialcustomerwithoutanyDGonthestandardrate.

“BillsAfterPV,onTOURate”showsthebillinghistoryforacommercialcustomerwithsolarPVonatypicaltime‐of‐useratethatincludesasignificantdemandcharge(Rate:AL‐TOU).

“BillsAfterPV,onDGRate”showsthebillinghistoryforacommercialcustomerwithsolarPVonamodifiedratethatincludesamuchlowerdemandcharge(Rate:DG‐R).

Figure 5‐4 Example Impact of Rate Structures on SDG&E Customer Electric Bills.60

59 For example, PG&E’s A‐6 tariff for small general time‐of‐use service does not have a demand charge. Its energy rate for summer peak periods is $0.44/kWh. See http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_A‐6.pdf. 60 J. Del Real and J. Fortune, “Understanding Non‐Residential Utility Rates,” California Center for Sustainable Energy, May 2010.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Customer's Monthly Electricity Bill

Bills Before PV Installation

BillsAfter PV, on TOU Rate

BillsAfter PV, on DG Rate



AcustomerwithPVonanytypeofratewillhavelowerelectricbillsthanthe“BillsbeforePVInstallation”,becausethePVgenerationisoffsettingconsumptionfromthegrid;thus,both“BillsAfterPV”barsarelowerthanthe“UtilityBillwithoutPV”barineverymonth.ButitisclearfromthedifferencebetweentherateswithPV(i.e.thedifferencebetween“BillsAfterPV,onTOURate”and“BillsAfterPV,onDGRate”)thattheDGratewithlowerdemandchargesresultsinalowerbill,especiallyduringthesummermonthswhenPVproductionisgreatestanddemandchargesarehighest.ThislowerbillwillreducethepaybacktimeforthePVsystem,anditillustratesthatthevalueofDGtothecustomercanbesignificantlyaffectedbytheratestructure.

ImpactofRateStructureonCostofServiceRecoveryWhilealowerutilitybillwillresultinareducedpaybacktimeforthePVsystem,itmayalsohindertheIOUs’abilitytorecoverthecostsofprovidingelectricservicestoresidentialandothercustomerclasseswhoinstallself‐generation.Thisisbecausecostsofservice(i.e.theinfrastructurethatallowsDGcustomerstoreliablyconsumeelectricityfrom,andexportto,theutilitygrid)areembeddedinenergy(kWh)relatedchargesforcertaincustomerclasses.Iftheutilityisunabletofullyrecovercostsfromself‐generators,nonparticipatingcustomersmayhavetoabsorbthosecosts,whichcouldaffecttheirrates.SDG&Eindicatedthataworst‐casesituationcouldarisewhenratesincreaseduetogreaterDGdeployment,andmorecustomersthenbecomeincentivizedtoinstalltheirownDGsystem,whichcouldfurtherexacerbatetherateincreases,creatinganunsustainablefeedbackloop.

5.2.3 Equitable Allocation of Costs

Distributedgenerationsystemsreceivevariousincentivesthroughtheprogramsdescribedinthisreport.Ultimately,allratepayersandtaxpayersfundtheseincentives,whethertheyareparticipantsandnon‐participants,eventhoughonlyarelativelysmallportionofthepopulationcurrentlyparticipatesintheseincentiveprograms.Whilenon‐participantsreceivesomebenefits,suchasreductionofgreenhousegasemissions,thesebenefitsmaynotexceedthecostspaid.Ifthereisconcernthatcostallocationisnon‐equitable,thismayaffectcontinuedproliferationofDG.

Anotherexampleofnon‐equitablecostallocationrelatestodistributionsystemupgradesthatmayberequiredtoinstallDG.Asdiscussedinsection4.1,protectionschemesmayneedtobemodified,additionalequipmentmayberequired,orsystemmodificationsmaybeneeded.Theallocationofcostsforthesenewrequirementsmayfallinequitablyonallratepayers,includingthosewhodonotbenefitdirectlyfromtheupgrade.61Undercurrentlaw,NEMprojectspaylittletonocosttointerconnecttotheutilitygrid.62Fromtheutilities’perspective,thereisconcernthatwithincreasedDGandNEMinstallations,additionalupgradestothedistributionsystemmaybecomenecessary.Thecostsoftheseupgradeswouldbebornebytheutilityandpassedontoallratepayers,meaningthatnon‐NEMcustomerswouldeffectivelybesubsidizingtheNEMcustomers.ThisissueismademorecomplexbythefactthatcustomerswhoinstallDGandtakeadvantageoftheNEMtarifftendtobewealthierthantheaverageratepayer,sopoorercustomerswouldbesubsidizingwealthieronesinthisscenario.63TheequitableallocationofcostsbetweenNEMcustomersandother

61 Itron, “Impacts of Distributed Generation,” Prepared for: California Public Utilities Commission Energy Division Staff, Davis, California, January 2010, p. 4‐5. 62 This exemption for NEM projects derives from Pub. Util. Code § 2827(d) and was interpreted by the CPUC in D.02‐03‐057 to include exemptions from the costs of interconnection application review fees, interconnection studies, and distribution system modifications triggered by the NEM project. 63 “Net Energy Metering, Zero Net Energy, and the Distributed Energy Resource Future: Adapting Electric Utility Business Models for the 21st Century,” Rocky Mountain Institute, Snowmass, CO, March 2012, p. 32.



ratepayersisconsideredbyutilitiestobeamajorconcernforincreasingDGdeployment,andiscurrentlybeingstudiedbytheCPUC.

Paststudiesandnewinitiativesareunderwaytotrytoaddressthisissue.Thesehaveshownmixedresults:someindicatetherearesignificantsubsidiesforNEMcustomers,whileothersindicatetherearesignificantnetbenefitsforallratepayers.TheNEMCost‐EffectivenessEvaluationcompletedfortheCPUCinMarch2010foundthatallNEMPVinstallationsthrough2008resultedinalevelizedcross‐subsidyofapproximately$20millionperyear.SCEin2012completedastudythatestimatedthatNEMcustomersaresubsidizedbynon‐NEMcustomersaround$50millionperyearwithNEMcapacityataboutonepercentofsystempeakdemand.64Conversely,astudycompletedbyCrossborderEnergyonbehalfoftheVoteSolarInitiativeinJanuary2013estimatedthatwhenNEMPVcapacityreachesfivepercentofpeakdemandinCaliforniaitwillprovideapproximately$90millionperyearinnetbenefitstoratepayersofPG&E,SCEandSDG&E;itfoundthatmostofthosenetbenefitswouldresultfromnon‐residentialNEMinstallations.65ItisexpectedthattheupdatedNEMCost‐BenefitEvaluationfor2012‐2013,commissionedbytheCPUC,willaddressthisissueagainandprovidegreaterdetail.66Finally,theUniversityofSanDiegoEnergyPolicyInitiativesCenter,Black&Veatch,andCleanPowerResearcharecurrentlyconductingacost‐benefitstudyfocusedonthenetcostorbenefitofsolarPVNEMsystemsinSDG&E’sterritory.AnobjectiveofthatstudyistodeterminethecostoftheservicesprovidedtoNEMcustomersandthevalueofthebenefitstheyprovidetothesystem.

5.2.4 Regulatory Mandates

CPUC,FERCandotherregulatingbodiesapplycertainoperationalmandatestoutilities.InputfromtheIOUsindicatedthatmandatesthataredifficulttoimplementorlimitautility’soperationscanunintentionallyaffectfurtherDGdeployment.Forexample,SDG&Eindicatedthattheuniqueattributesoftheirsystem,specificallybeingheavilyresidential,arenotoftenconsideredbyregulatorsandcouldimpactfurtherdeploymentofDG.

Asanotherexample,theCPUCrequiresutilitiestomaintainvoltageatacertainstandard(forexample,withina+/‐5percentthreshold).67Asdescribedinsection4.1.5,DGsystemsaffectsystemvoltage,andmayleadtoviolationsoftheCPUCmandatedthresholds.Thus,itispossiblethatthesestandardscouldindirectlyaffectDGdeploymentbydiscouraginginstallationswhichmaycausevoltageissues.PEPCOHoldings,Inc,whichisdealingwithincreasedsolarPVinstallationsinNewJersey,hassuggestedthatvoltagestandardsmightbereviewedandpotentiallyrelaxedtoprovidegreaterflexibilitytoaccommodateDGinitsserviceterritory.Inparticular,Germanyappliesa+/‐10percentthreshold.68However,relaxingvoltagerequirementswouldneedtobecarefullyconsideredandmaynotbeappropriateinCalifornia.Operatingathighervoltagemaybedetrimentaltoexistingcustomerloadequipmentthatwasdesignedandratedfortheexistingvoltagerange.

64 SCE, “Retail Rates and Cost Issues with Renewable Development,” May 2012, available at http://www.energy.ca.gov/2012_energypolicy/documents/2012‐05‐22_workshop/presentations/09_Garwacki_SCE‐Retail_Rate_2012‐05‐22.pdf. 65 Crossborder Energy, “Evaluating the Benefits and Costs of Net Energy Metering in California,” January 2013. Available at: http://votesolar.org/resources‐impacts‐of‐net‐metering‐in‐california/. 66 http://www.cpuc.ca.gov/PUC/energy/Solar/nem_cost_benefit_evaluation.htm 67 Voltage and other service standards are set out in each IOU’s Electric Tariff Rule 2, which is subject to the CPUC’s approval. 68 PEPCO Holdings, Inc., “Challenges for Distribution Feeder Voltage Regulation with Increasing Amounts of PV”, Available at: http://www1.eere.energy.gov/solar/pdfs/hpsp_grid_workshop_2012_steffel_pepco.pdf.



5.3 GRID ACCESS AND INTERCONNECTION ChallengesinobtainingaccesstothedistributiongridandcompletingtheutilityinterconnectionprocessareoftencitedasbarriersforDGdeployment.CaliforniahasmadelargestridesinfacilitatingDGinterconnection.Thissectiondescribesexistinginterconnectionprocesses,barriersrelatedtointerconnection,andfutureinterconnectionpoliciesthatmayaffectthesebarriers.

5.3.1 Existing Interconnection Processes

TherearethreedifferentinterconnectionprocessesthatapplyinCalifornia,dependingonprojectsizeandwhethertheinterconnectionistothetransmissionordistributionsystem.AlthoughthisreportdoesnotfocusonwholesaleDGsystems,theinterconnectionprocessesforthesesystemsaresummarizedinadditiontocustomer‐sideDGbelow.

CAISOInterconnectionProcessWholesaleDGprojectsmayinsomecasesbelargeenoughtointerconnectwiththetransmissionsystem.Ifthisweretobethecase,theywouldgothroughtheCAISOinterconnectionprocess,whichhasfourtracks,listedinorderfromsimplesttomostcomplex:

10kWInverterProcess

FastTrackProcess

IndependentStudyProcess

StandardClusterStudyProcess

WholesaleDistributionAccessTariffProcessIfawholesaleDGprojectistointerconnectwiththedistributionsystemofanIOUandengageincompetitivewholesalecommercialarrangements,thenitwouldlikelygothroughtheinterconnectionprocesssetoutineachIOU’sWholesaleDistributionAccessTariff(WDAT),whichissimilarbutnotidenticalforeachIOU.TherearemultipletrackswithintheWDATprocesssimilartotheCAISOtrackslistedabove.69EachIOU’sWDATisaFERC‐jurisdictionaltariff.

Rule21ProcessCustomer‐sideDGsystemsinterconnectingwiththedistributionsystemandwholesaleDGengaginginanavoided‐costsaletothehostutility,suchasfeed‐intariffparticipants,willtypicallyusetheCPUC‐jurisdictionalRule21interconnectiontariff.Rule21wasinitiallyadoptedbytheCPUCin1982toaddressthesafeandreliableinterconnectionofQualifyingFacilities(QFs)underthePublicUtilityRegulatoryPoliciesAct(PURPA).TheCPUCrevisitedRule21in2000andworkedtosubstantiallystreamlinetheinterconnectionprocessforsmaller,customer‐sideDGsystems,especiallyNEMsystems.Thechangeswereeffective:todate,asshowninTable3‐9above,over100,000NEMsystemshavebeensuccessfullyinterconnected.

However,asthescaleandpenetrationofDGsystemshaveincreased,particularlywiththeadventoftheCPUC’snewerwholesaleDGprograms,additionalreformstofacilitateinterconnectionbecamenecessary.SignificantreformstoRule21enactedinSeptember2012aredesignedtomaketheinterconnectionprocessmoretimely,cost‐effective,andtransparentforwholesaleDGprojectswhileretainingthesameefficiencyforNEMprojects.

69 CAISO, “Resource Interconnection Guide,” July 2012. Available at http://www.caiso.com/participate/Pages/ResourceInterconnectionGuide/default.aspx.



ToserveDGinterconnectingtothedistributionsystemonbothsidesofthemeter,theRule21interconnectionprocessinvolvesthefollowingstudytracks,alsolistedinorderofsimplesttomostcomplex:

FastTrackProcess

DetailedStudies

● IndependentStudyProcess

● DistributionGroupStudyProcess(forthcoming)70

● TransmissionClusterStudyProcess71

AdditionalrecentreformstoRule21include:

Eligibilityforthe“FastTrack”processisexpandedtoincludeexportingfacilitiesupto3MWforPG&EandSCE,andupto1.5MWforSDG&E.

EligibilityforDGpenetrationlevelsisexpandedtothehighestinthenation.Theinitialscreenforaggregategeneratingcapacityupto15percentofpeaklinesectionloadisretained;however,ifanapplicantfailsthisscreen,theaggregategeneratingcapacitymayalternativelybetestedagainst100percentofminimumloadonthelinesection.ThisshouldallowformoreDGtobeconnectedwithintheFastTrackprocess.

Energystorageisincludedwithinthedefinitionof“generatingfacility,”makingstoragetechnologieseligibleforthesameinterconnectionprocesswithinRule21.

StandardInterconnectionAgreementsforNEM,non‐export,andexportinggeneratingfacilitiesareapproved.

Standardapplicationandsupplementalreviewfees(NEMsystemsexemptfromthesefees)areapproved.

Firmtimelinesareestablishedtoensurethatprojectsmakeprogresstowardinterconnection.

DisputeresolutionmechanismsattheIOUsandattheCPUCareestablishedtoaddressinterconnection‐relateddisputesefficiently.

AprocessforobtainingResourceAdequacyvalueisidentifiedthroughtheTransmissionClusterStudyProcess.

Apre‐applicationreportandonlineinterconnectionqueuesareintroducedtoaidsitingdecisions.

70 The Distribution Group Study Process is intended as a more‐efficient study track for groups of electrically interdependent generating facilities interconnecting to the same distribution circuit. The CPUC has identified this additional study track within Rule 21 as an issue to be completed within Phase 2 of the interconnection OIR. See Assigned Commissioner’s Amended Scoping Memo and Ruling Requesting Comments, filed September 26, 2012 in R.11‐09‐011. 71 Applicants under Rule 21 that are found to have electrical interdependence with the transmission network are offered the option of transitioning to the next applicable transmission cluster study process conducted by CAISO.



5.3.2 Barriers Related to DG Interconnection72

TheCPUC’sinterconnectionoversightandreformeffortshavefocusedonRule21,thetariffundertheCPUC’sjurisdiction.ItisimportanttonotethatthereformstoRule21adoptedinSeptember2012wereintendedtoaddressanumberofbarrierstoentryrelatedtotimeliness,transparency,andpredictabilitythathadbeenidentifiedbeforethestartoftheCPUC’sinterconnectionrulemaking.Thus,theCPUCwillbemonitoringthesuccessofthereformsinreducingoreliminatingthosebarrierstoentry.

Atthesametime,theCPUChasidentifiedcertainforward‐lookinginterconnectionpoliciestoaddressinPhase2oftheinterconnectionproceeding.Thoseinclude:

DetailingtheDistributionGroupStudyProcess,

Developingadditionalstandardizedinterconnectionformsandagreements,

Enhancinginterconnectioncostcertainty,usingtoolssuchastheidentificationofpreferredlocationsforDG,

EvaluationofthesuccessofRule21inreducinginterconnectionasabarriertoentry,and

EvaluatingtechnicaloperatingstandardsthatcanaidinaccommodatingincreasesinDG,includingautonomoussmartinverterfunctionalities.73

TimetoProcessInterconnectionApplicationsTheefficiencyandspeedwithwhichinterconnectionapplicationsareprocessedunderRule21hasbeenidentifiedasabarrierbysome,sincetheamountofDGinstallediscompletelydeterminedbyhowmuchDGisapprovedforinterconnectionbytheutility.Somepointtothefactthatinterconnectionprocessispaper‐basedasasourceofinefficiency.Tohelpaddressthisissue,SDG&Ehasimplementedanonlinedatabaseforinterconnectionapplications,similarinsomewaystothePowerClerksoftwareusedbytheCSIprogramforincentiveapplications.Thishasimprovedapplicationprocessingspeedandallowedgreatercustomervisibilityintotheinterconnectionapprovalprocess,therebyreducingtheperceptionofinterconnectionprocessingasabarriertoDG.However,thefundingforsucheffortsmayhavetobedrawnfromthebudgetforotheractivitieslikeoperationsandmaintenance,whichisabarrierontheutilitysidetofurtherimprovements.

Table5‐2andFigure5‐5showtheaveragetimestakentoprocessinterconnectionapplicationsfordistributedsolarPVintheCSIGeneralMarketprogrambyeachIOU.AlloftheIOUsareonaveragemeetingtheirstatutoryobligationtoprocessNEMinterconnectionapplicationswithin30days.Forbothresidentialandnon‐residentialapplications,SDG&EshowedsignificantlyshorterprocessingtimesthanPG&EandSCE.WhileSDG&Ehasasmallervolumeofinterconnectionrequests,representativesfromCCSEindicatedthatSDG&Efocusesoncompletinginterconnectionsquicklyandthatitsonlineinterconnectiondatabasealsomakestheprocessmoreefficientthantheotherutilities’paper‐basedsystems.SincenearlyalloftheseapplicationsareforDGsolarsystemsthatarealsoreceivingincentives,theinterconnectionapplicationprocessingtimeismerelyonepartoftheprocessthatcancausedelays.However,itisperhapsthemostcriticalpartbecauseacustomer

72 As noted previously, California has successfully addressed many interconnection barriers in the past, and many additional barriers have been addressed through the reforms to Rule 21. This section describes issues which have historically been considered barriers, but which may no longer represent significant obstacles to DG interconnection. 73 Assigned Commissioner’s Amended Scoping Memo, filed September 26, 2012 in R.11‐09‐011.



cannotlegallyinterconnecttothegridandstartproducingelectricitywithoutcompletingtheinterconnectionprocess.

Notably,theaverageinterconnectionapplicationprocessingtimeforallthreeIOUsincreasedinthefirst6monthsof2012comparedtopreviousyears.Aprobableexplanationfortheincreaseistheincreasedvolumeofinterconnectionrequests.Comparedtopreviousyears,therateofinterconnectionapplicationshassubstantiallyincreased,insomecasesdoubling.Addingstaffandimplementinganonlineprocessingsystemmaydecreasetheaverageinterconnectionprocessingtime.

Table 5‐2 Number of Interconnection Applications and Average Interconnection Application Processing Times for CSI PV Systems by IOU74

TIMEPERIOD

PG&E SCE SDG&E

RESIDENTIALNON‐

RESIDENTIAL RESIDENTIALNON‐

RESIDENTIAL RESIDENTIALNON‐

RESIDENTIAL

AverageNumberofApplicationsReceivedperMonth

January–June2012 798 63 889 38 273 8

2009–2011 726 36 453 19 200 6

AverageProcessingTime(Days)

January–June2012

18.4 17.6 12.3 19 4.5 6.9

2009–2011

10.7 12.6 10 17.9 3.6 4.8

74 http://www.californiasolarstatistics.ca.gov/reports/data_annex/ and CSI Working Data Set



Figure 5‐5 Average Interconnection Application Processing Times for CSI PV Systems by IOU

IdentifyingOptimalInterconnectionLocationsAshasbeennotedthroughoutthisreport,identifyingthe“rightplaceattherighttime”forDGwillcreatethegreatestvalueforratepayersandtheelectricgrid.Achievingthisgoalhasdirectimplicationsforinterconnection.First,asdiscussedinthissection,thereareseveraltoolsnowavailableinCaliforniatoaidDGsitingdecisions.Second,theCPUCisconsideringnext‐generationpolicies,suchasimprovinginterconnectioncostcertaintyandautonomoussmartinverterfunctionalities,tofurtheridentifytheoptimallocationsandtimingofDGonthedistributionsystem.

InterconnectionCapacityMapsInstallersanddevelopersinthepastoftennotedthatitwouldbehelpfultohaveamaporGIStoolwhichwouldallowthemtoidentifyoptimallocationsonthedistributionsystemforlargerDGsystems(generallywholesalesystems)basedoncircuitcapacityorothercharacteristics,ratherthanhavingtofindoutwhichsitesaregoodorbadthroughtheinterconnectionreviewprocess.Fortunately,thisparticularbarrierhasbeenatleastpartiallyaddressedforwholesalesystems,andisgenerallynotachallengeforcustomer‐sidesystems.In2011,pursuanttoCPUCdecisionsimplementingtheRAMprogram,theIOUsreleasedweb‐basedmapsofinterconnectioncapacityontheirdistributionandtransmissionsystemsforjustthispurpose(seeFigure5‐6).PursuanttoCPUCorders,theIOUsactivelymaintainthesemapsontheirwebsitesandupdatethemapproximatelyoncepermonth.

0

2

4

6

8

10

12

14

16

18

20

Residential Non‐Residential Residential Non‐Residential Residential Non‐Residential

PG&E SCE SDG&E

Interconnection Application Processing Time, Days 2009 – 2011

January – June 2012



Figure 5‐6 Example Interconnection Capacity Mapping Tool from PG&E75

Pre‐ApplicationReportandOnlineIntegratedQueuesInadditiontothemaps,aPre‐ApplicationReportisnowavailableunderRule21,whichprovidesalow‐cost($300)firstlookofthetechnicalpotentialandchallengesofadesiredpointofinterconnectionforaDGproject.Anypotentialapplicantcanrequestareport,regardlessofwhethertheywillapplyforinterconnectionunderRule21ortheWholesaleDistributionAccessTariff.

Rule21alsonowrequiresIOUstomaintainanonlineintegratedqueueoftheDGprojectsseekinginterconnectiontothedistributionsystemunderRule21andtheFERC‐jurisdictionalWholesaleDistributionAccessTariff.Thisonlinespreadsheetprovidesmarketparticipantsameansofevaluatingthenumberofapplicantsqueuedaheadonthesamedistributioncircuit.Thelengthofthequeueimpactsthetimeandriskassociatedwiththeinterconnectionprocess.

5.3.3 Future Interconnection Policies

BecauseoftheincreasingamountofDGandthegrowingfocusonitsroleintheelectricsystem,effortstodevelopthenextgenerationofinterconnection‐relatedpoliciesareunderwayatboththestateandfederallevel.

75 https://www.pge.com/b2b/energysupply/wholesaleelectricsuppliersolicitation/PVRFO/PVRAMMap/index.shtml



CPUCRule21InitiativesCostcertaintyhasbeenidentifiedasamajorfactoraffectingtheabilityofDGinstallerstocompletetheinterconnectionprocess.Costuncertaintycantaketheformofalackofpredictabilityabouttheupgradesandcoststhatwillbetriggeredatagivenpointofinterconnection,and/orahighdegreeofvariabilityintriggeredcostsduringtheinterconnectionprocess,becauseofdecisionsmadebyqueued‐aheadprojects.76TheCPUCheldafirstworkshoponcostissuesinNovember2012tolaunchPhase2oftheinterconnectionproceeding.

AsdiscussedfurtherinSection6below,DGhasthepotentialtosupport,ratherthandetractfrom,thereliabilityofthegrid.InPhase2oftheinterconnectionproceeding,theCPUCisexaminingthepotentialtointroduceautonomoussmartinverterfunctionalitiesthatwouldbeapplicabletocertainDGsystems.ThepotentialforcontributionsbyDGwithsmartinverterfunctionalitiesisdiscussedfurtherinSection5.4andSection6.0.

CAISODGInitiativesAlsoatthestatelevel,CAISOissuedamemoranduminSeptember2012fortheconsiderationofitsboard,coveringCAISO’sevolvingpoliciestoaddressincreasingDGdeploymentinCalifornia.77Thismemorandumincludesanumberofinitiatives,allofwhicharedesignedtofacilitatetheinterconnectionofDGonthetransmissionanddistributionsystem:

AstreamlinedassessmentprocessforDGprojectsrequestingdeliverabilitystatustosupportresourceadequacyprocurementfor2014

AreviewandstakeholderprocessrelatedtocomplexandcostlytelemetryandmeteringrequirementsforDGprojects

A“non‐generatingresource”modeltoallowenergystorageprojectstoparticipateintheCAISOmarket

Aclarificationthatenergystoragecanprovidebothspinningandnon‐spinningreservesforthegrid

FERCDGInitiativesAtthefederallevel,FERCiscurrentlyconsideringapetitionforrulemakingfiledbytheSolarEnergyIndustriesAssociation(SEIA)inFebruary2012.ThispetitionrequestedthatFERCreviseitssmallgeneratorinterconnectionprocedurestomakeiteasierfordistributedsolarPVtobeinterconnectedtothedistributiongridusingthe“fast‐track”reviewprocess,largelybyraisingtheprojectsizelimitsandbyintroducingthealternativeDGpenetrationlimitof100percentofdaytimeminimumloadnowavailableinRule21.FERCheldatechnicalconferenceinJuly2012todiscussthisparticularissue,atwhichtheCPUCpresentedthenewpenetrationthresholdandotherrelevantadvancesthatwerethenpending(andsinceapproved)inRule21.Asofthiswriting,FERChasnotyetreachedadecisionaboutwhethertoactonSEIA’spetition.WhileitisnotcertainthatFERCcanadoptSEIA’sproposedchangesbecausetheyaresolar‐specific(FERCmustremaintechnology‐neutralinitspolicies),thefactthatthepetitionisbeingconsideredshowsthattheremaybechangeatthefederallevelintermsofinterconnectionprocessesrelatedtoDG,andthatregulatorychangesmayreducebarrierstogreaterDGdeployment.

76 For more on the cost issues associated with interconnection, see Assigned Commissioner’s Amended Scoping Memo and Ruling Requesting Comments, filed September 26, 2012 in R.11‐09‐011. 77 K. Edson, “Briefing on Distributed Energy Resources,” submitted to CAISO Board of Governors, Sept. 2012.



5.4 INTEGRATION TheintegrationofDGintothedistributionsystemandtheoveralloperationoftheutility’sgridisachallenge.ManyDGsystems,predominantlythosewhichimplementwindorsolartechnology,donothavetheabilitytosupplygenerationondemand.AsDGpenetrationincreases,particularlyonthesamedistributionfeeder,theintegrationofDGsystemswillbecomemorechallenging.

ThereareseveralchallengestointegratingDGsystemstothetransmissionanddistributiongrid,particularlyintermittentsystemssuchassolarorwindfacilities.Theseissuesandbarriersarelistedbelow,andarefurtherdescribedinthefollowingsubsections.

Lackofmonitoring,forecastingandcontrolcapabilities

LackofmodelingcapabilitiestoaddressincreasedintegrationofDG

Distributionsystemdesignedforpowerflowtowardsload

Inverterstandardscouldbemore“gridfriendly”

5.4.1 Monitoring, Forecasting, and Control

Currently,muchoftheDGinstalledonthegridinCaliforniaisnot“visible”tothegridoperators.Thisisduetoalackofmonitoringandcontrolcapabilitiescombinedwithlimitedforecastingsystems.AsDGpenetrationgrows,thismaypresentasignificantbarriertoefficientuseoftheoverallsysteminthefuture.

Currently,utilitiesdonotmonitorthereal‐timeoutputofmostcustomer‐sideDGplants.Onlysystemsabove1MWarerequiredtoinstallmeteringandtelemetrythatpermitreal‐timemonitoring.Mostcustomer‐sidesystemsarebehindthemeterandoffsetload,andasaresult,onlythenetloadisvisibletoutilities.ThelackofvisibilityinDGoutputhasnotbeenconsideredaprobleminthepast.Infact,historically,itwasthoughtthatthecosttomonitortensofthousandsofsmallersystemsdidnotjustifythebenefitsatlowpenetrationlevels.Furthermore,giventhelackofstandardcommunicationprotocolsforthevariousDGequipmentdeployed,utilitiesfinditchallengingtocollectandmakeuseofthedata.78

AsdescribedinarecentreportbyExeterAssociatesandGeneralElectric,thelackofvisibilityintoDGoperationcanbedividedintotwomainconcerns:(1)theimpactofDGonloadforecastingand(2)thepotentialforlargeamountsofDGtodropoffthegridinresponsetosystemdisturbances.79TheseconcernsincreaseasDGpenetrationincreases.

78 While smart meters are being deployed through California, all IOUs indicated that smart meters do not currently improve their ability to monitor DG systems. Currently, there is generally no communication between smart meters and customer side PV systems. There are numerous challenges to this, as explained by the utilities in recent reports to the CPUC. See http://www.cpuc.ca.gov/PUC/energy/Solar/UtilityProgramAdministratorsReportsUsingAMIForTrackingRooftopsolarGenerationJuly2012.htm. SMUD and EPRI have just begun work on a pilot program to test a low‐cost inverter‐smart meter communication approach. 79 Exeter Associates and General Electric, “PJM Renewable Integration Study. Task Report: Review of Industry Practice and Experience in the Integration of Wind and Solar Generation”, November 2012.



ForwholesaleDGsystems,thistypeofmonitoringisalreadytypicallypresent.80Forsmallersystems,SCEandSDG&Eindicatedthatvisibilityintoasystem’sstatusandproductionmaybeuseful.SDG&Eindicatedthatthisvisibilitymaypossiblyallowthemtofactoritintotheirtransmissioncapacitymargincalculations(seesection4.2.6).SCEindicatedthatmonitoringofsystems,particularlythoselargerthan250kW,isnecessary.AthigherDGpenetrations,theutilitiesmayneedtorequiremonitoringatsmallerDGsizessincesmallerunitsmayaggregatetoalargercapacityandmayhaveamoresignificantimpact.IOUsrecognizethathavingthiscapabilitywouldlikelyincreasethecomplexityoftheirsystemoperationsignificantly,butthismaybenecessaryfortheefficientandreliableoperationoftheirsystem.

Inadditiontolackofmonitoring,theutilitiesalsodonottypicallyhavecontrolcapabilitiestocurtailtheamountofenergyDGsystemsproduce.Whilesignificantimpactsduetolackofmonitoringandcontrolmaynotappearforseveralyears,itmaybeprudenttobeginconsideringoptionsaheadoftimesoastobeprepared.Germany,whichhasabout30GWofsolarPVconnectedtoitssystem,hasbeendealingwithintegrationissuesforsometime.Ithasrecentlyinstitutedrulechangesthatwillrequireretrofitof315,000olderPVinstallationstoallowvaryinglevelsofcontrol.AccordingtoExeterAssociates:

GermanyrequiresthatallDGunitsequaltoorgreaterthan100kilowatts(kW),withtheexceptionofsolarPV,beremotelyobservableanddispatchableforthetransmissionsystemoperator.SolarPVsystemslessthan100kWareexemptfromrequirementstomeasurepoweroutput.However,solarPVunitsbetween30kWand100kWarerequiredtobeabletoreduceoutputremotelyincaseofgridcongestion.Further,solarlessthan30kWmustbeabletoreduceoutputremotelyincaseofgridcongestionortoreducemaximumpowerto70%ofinstalledcapacity.81

Inadditiontolackofmonitoringandcontrol,reliablemeansofforecastingthenear‐termoutputfromDGsystemsisonlynowemerging.ForecastingofDG,andPVinparticular,maybenecessaryforintegrationofDG.Forecastingmovingcloudcoverandotherweatherchangeswillallowforimprovedcontrolandfunctionofthedistributionsystem,balancingofgenerationinacontrolarea,andmoreeconomicalunitcommitment.Ifforecastingcapabilitiesareachieved,thencontrolcapabilitiesmaybecomemorevaluabletocurtail,increaseorotherwisecontroldistributedgenerationasnecessary.

5.4.2 Modeling Tools for Integration of DG

Thereisalackofeasy‐to‐usemodelingtoolsanddatawhichallowuserssuchasutilitiestodynamicallymodelrenewableresourcesonthedistributionsysteminconjunctionwiththetransmissionsystem.Sometoolsarebeingusedtomeetcurrentneeds,butasSDG&Eindicated,theyarenotuser‐friendlyandoftenrequirespecializedpersonneltorun.Utilitieswouldprefertohavethiscapabilityinhouse.

80 Currently, telemetering requirements are imposed only on DG systems 1 MW or larger. Smaller units do not have this requirement since at lower penetrations the expectation was that the impacts would be minimal, the cost to collect the data would be relatively high, and processing of this additional data may not be necessary. This assumption should be revisited as penetration increases or the operational requirements for DG change. For example, California utilities have recently proposed telemetering requirements for certain wholesale DG systems smaller than 1 MW that will export power to be aggregated and scheduled into CAISO’s market. As of this writing, the CPUC has not yet evaluated those proposals. 81 Exeter Associates and General Electric, “PJM Renewable Integration Study. Task Report: Review of Industry Practice and Experience in the Integration of Wind and Solar Generation”, November 2012.



Inadditiontothelackofmodelingsoftware,certaininputsforthissoftwareareoftenlimited–specifically,modelsforsolarPVinvertersthatrepresentnotonlythestaticbehavior,butalsothedynamicbehavior.SCEindicatedthatinvertermanufacturerstypicallyrequestnon‐disclosureagreementswithutilitiesbeforeprovidingdetailedinformationontheirmachines.Becauseofthislimitation,utilitiesgenerallycreateinvertermodelswithseveralassumptions.Theaccuracyofthemodelsmaybelimitedbecauseofthelackofdata;andwiththelackofdata,utilitiescannotbesurethemodelingsoftwaretheyareusingisappropriate.ThelimitedaccuracycouldhinderfurtherinstallationofDG,specificallysolarPV.

ThereisnotwidespreaduseofhighDGpenetrationmodelsbydistributionandtransmissionengineers,especiallymodelsthatsimultaneouslysimulateintegratedtransmissionanddistributionsystems.TheneedforthistypeofmodelwillbecomemorepressingasthepenetrationofDGincreasesandreversepowerflowfromthedistributionsystemtothetransmissionsystemgrowsmorecommon.

5.4.3 Distribution System Design

Thedistributionsystemwasdesignedtosupplyenergyfromthetransmissionsystemtoloads.DGsystemsintroduceenergysourcesonthedistributionsystem.Becausethedistributionsystemwasnotdesignedforthisfunctionality,therearechallengeswithintegratingDGathighpenetrationlevels,especiallywhentheyarenotgeographicallyspreadoutacrossthedistributionsystem.ThisissueleadstosomeofthenegativeimpactsofDGonthegrid,suchasreversepowerflows.ApotentialbenefitofDGsystemsistoreducethenumberofsystemupgradesneeded;however,thismaynotalwaysbethecaseifDGdeploymentinaparticularareaincreasestheneedforsystemupgrades.

5.4.4 Inverter Standards

IEEE1547isavoluntarystandardforinterconnectingdistributedgenerationtothegrid.Specifically,IEEE1547addressestopicssuchasperformance,operation,testing,safety,andmaintenanceofinterconnection.IEEE1547specificallycallsforinverterstotripofflinequicklyintheeventofagriddisturbancetoavoidislandingofgenerationandotherissues.Initscurrentform,thestandarddoesnotallowfeaturessuchaslow‐voltageride‐through(LVRT),whichcouldbevaluableinhelpingmaintainsystemstabilityinthecaseofsystemdisruptions.Revisingthisaspectofthestandard,andpossiblyothers,mayallowinverterstobemore“gridfriendly”andbetteraccommodatehighDGpenetrationscenarios.Gridfriendlyinvertersmayallowbettersupportorcoordinationwiththegridregardingvoltageandfrequency.

AsnotedbyPG&E,thenationalstandards,suchasIEEE‐1547andUL‐1741arenotcurrentlycompatiblewithsomeofthedesiredinverterfeatures,suchasLVRT.WhiletheIEEE‐1547andUL‐1741wouldneedtobemodifiedtopursuetheseadvancedinverterfeatures,thenationalstandardsmaytakesometimetorevise.Therefore,Rule21wouldneedtobemodifiedinparalleltorevisingthenationalstandards.

5.5 MISCELLANEOUS Inadditiontothetechnicalandeconomicbarriersandissuesdiscussedintheprevioussections,thereareanumberwhicharelesstangibleorquantifiablebutarestillsignificantforcustomer‐sideDGdeployment.Theseissuesandbarriersincludethefollowing,andarediscussedinthesubsectionsbelow:

Processingtimesandcustomerunderstanding



Allocationoffunds

Multipleprograms

Availabilityofinstallers

Marketingandconsumereducation

Forecastingfutureinstallations

Projectsiting

5.5.1 Processing Times and Customer Understanding

AsignificantbarriertoDGdeploymentfromthecustomerordeveloper’sperspectiveistheadministrativeprocessingtimerequiredtoparticipateinDGincentiveprograms,toapplyforinterconnection,andtoobtainnecessaryinspectionsandsafetychecks.Customersanddevelopersoftencitethisasabarrierbecausethetimeandefforttocompletealltheseprocessescandiminishorevennegatetheexpectedbenefitsoftheproject.Fromtheutilityorprogramadministrator’sperspective,acloselyrelatedbarrieristhefactthatcustomersanddevelopersoftendonothavesufficientbackgroundorexperiencetocompletetheseprocessessuccessfully,andtheirlackofunderstandingcausesadministratorstospendtimeorientingthemtotheprocesses.Thistakesawaystaffresourcesfromreviewingandapprovingapplicationsforincentives,interconnection,etc.AnotherrelatedbarrieristhatDGadministratorsmaybeshort‐staffedrelativetothevolumeofapplicationsreceived,foravarietyofreasons.

5.5.2 Allocation of Funds

ExistingDGincentiveprogramsgenerallyhavetargetsorallocationsforhowmuchfundingshouldbedirectedtocertaintypesofDGinstallations.Forinstance,manyoftheprogramsattempttodividefundsevenlybetweenresidentialandnon‐residential(commercial,industrial,government,non‐profit,etc.),andmanyalsohave“carve‐outs”forlow‐incomeprojects.InthecaseoftheCSIprogram,MASHandSASHwerecreatedasentirelyseparateprogramstoensurethatadesignatedamountoffundingreachedlow‐incomeprojects.

Issuesrelatedtoallocationofprogramfundsareoftenperceivedasaproblembyparticipants,butthenatureoftheproblemdependsontheparticipant’sperspective.Low‐incomehomeownersorrentersmayseethelimitonfundingforlow‐incomeprojectsasaproblemifthereissubstantialcompetitionforthesefunds.Utilitiesmayseethedivisionoffundsbetweenresidentialandnon‐residentialprojectsasanissuepreventingefficientuseoffunds,becausesomefeelthatlargernon‐residentialprojectsareamorecost‐effectiveuseofpublicmoneythansmallerresidentialprojects,duetothelowerper‐kWcostsforlargersystems.Conversely,residentialcustomersmightviewtheallocationsforlargecommercialprojectsashinderingtheirownparticipationsincetheremainingfundsforsmallresidentialprojectsarethenmorelimited.

Totalfundingfornon‐renewableDGsystemsisgenerallylessthanthatforrenewableDG,andtheyoftenreceivealowerincentiveperkW.Sinceitislesslikelytobeinstalled,thismaybeconsideredanissuespecificallyfornon‐renewableDG.

5.5.3 Multiple Programs

Section3.0ofthisreportdescribesanumberofdifferentprogramssupportingDGinCalifornia.Theproliferationoftheseprogramsmaybeanissuetosomedegreeinitself.Fromacustomerorprojectdeveloper’sperspective,theremaybeconfusionabouttheprogram(s)forwhichtheirprojectiseligible.Thiscanleadtoprojectdelaysinsomecases,andalsotofrustrationonthe



customer’sordeveloper’spart.Fromautilityorprogramadministrator’sperspective,theremaybedifficultyduetolimitedfinancialorstaffresources,suchthatitisnotefficienttoadministeranumberofdifferentprograms.However,DGprogrammanagersdidindicatethatthiswasnotamajorconcernforutilitiesindeployingDG,andthatthearrayofdifferentDGprogramswasappropriatebecauseeachistargetedatadifferentprojecttypeorcustomersegment.Theirmainconcernwasthattheyspendasignificantamountofstafftimeeducatingcustomers,installers,anddeveloperswhoareunfamiliarwiththemultitudeofprograms.

5.5.4 Availability of Installers

Inordertodeploycustomer‐sideDG,skilledandexperiencedinstallersmustbeavailabletosupportvoluntaryDGinstallations.TherateofDGdeploymentdependsinpartontheavailabilityofinstallers,andalackofinstallersinthepastconstitutedabarriertogreaterdeployment.Ingeneral,utilityrepresentativesagreedthatalackofDGinstallersmayhavebeenaproblempreviously,butthatitisnotawidespreadbarriernowbecausethevolumeofinstallationsandinstallershasrisendramaticallyandsohasthenumberandcoverageofexistinginstallers.Intheopinionofutilityrepresentatives,competentinstallersarenowavailableinmostpartsofCalifornia.

5.5.5 Marketing and Consumer Education

BecauseDGinstallationsarevoluntary,customersmustfirstbeawareofDGasanoptionfortheirelectricneeds,andalsoseeitasapotentiallybeneficialoption—intermsofeconomiccost,environmentalimpact,energyindependence,localjobcreation,orsomecombinationofthese.DGincentiveprogrammanagersconfirmedthatthisissuehasbeenandcontinuestobeabarrierforgreaterDGdeploymentinCalifornia,thoughitisnotconsideredsignificantenoughtodaytobelistedasakeybarrier.ThegeneralpublicismuchmoreawareofDGtechnologiesandtheirbenefitsnowthanwasthecaseafewyearsago,duelargelytothefundingandeffortsofthestate’sDGprogramsaswellastheeffortsofinstallersthemselves,whoperformasubstantialamountofmarketingandconsumereducationaspartoftheirsalesprocess.However,moreinvestmentinmarketingandeducationofconsumerswouldlikelyreducethisparticularbarrierfurther.

Therearealsoopportunitiesforbettertargetingofsuchmarketingandeducationefforts,butmanyofthesewouldrequireinformationsharingbetweenentities.Forexample,CCSEadministerstheCSIandSGIPprogramsinSDG&E’sserviceterritory,andalsoleadsmarketingfortheseDGprogramstoSDG&Ecustomers.However,CCSEdoesnothaveaccesstospecificcustomerinformationwhichcouldhelpittotargetitsmarketingtowardthosecustomersmostlikelytoadoptDG,e.g.higherincomecustomers,customerswithrelativelyhighusage,customersondistributioncircuitswithsignificantexcesscapacity,etc.

5.5.6 Forecasting Future DG Installations

TheabilityorinabilitytoforecastfutureDGinstallationsisanissueforutilitiesandprogramadministrators.Programadministratorsneedsuchforecastsofinstallationstoallocatefinancialandstaffresourcesandplanforfuturechangesinbudgetorstaffinglevels.WhentheforecastsareinaccurateitcanleadtoinsufficientresourcesandthereforebacklogsinDGapplicationprocessing.UtilitydistributionplanningprocessesshouldhaveforecastsoffutureDGinstallationsandoutputtodesigntheirsystems.AsDGinstallationsincrease,inaccurateforecastscouldimpactthegrowthofthedistributionsystemsuchthatappropriateinfrastructureisnotavailabletoaccommodategrowthofDGinstallationsinthemostcost‐effectivemanner.Programadministratorsindicatedthatshort‐termDGinstallationforecastshavebecomerelativelyreliablebasedonanalysisofrecentinstallationtrends,butthatlong‐termforecastsaremuchlessreliablebecauseofthevarietyofpolicyandmarketfactorsaffectingDGdeploymentandtherapidpaceatwhichtheychange.



Overall,theyclaimedthatlong‐termforecastingisnotyetasubstantialissue.However,utilitydistributionengineersdidseethisasapotentiallysignificantissueforfutureDGexpansion,althoughithasnotmanifestedtoalargeextentyet.

5.5.7 Project Siting

ThereareseveralaspectsofsitingaDGprojectthatcouldconstituteabarriertofurtherdeploymentofDG.Ithasbeenestimatedthatupto75percentofelectriccustomersdonothavetheabilitytoinstallsolarPVontheirownproperty.82Thereareavarietyofreasonsforthis,including:1)residentialandcommercialrentersoftendonothavethenecessaryauthoritytoinstallpermanentequipmentlikeaPVsystem,2)manyhomesarelocatedinareaswithinadequateresources(e.g.,toomuchshade)orinfrastructure(roofswithanon‐optimalorientation),3)non‐taxableentitiescannottakeadvantageoftheITCorothertaxbenefitsavailableforPV,and4)avarietyofcustomersdonothavethetimeorfinancialcapacitytoinstallPV.Allofthesebarriersapplyinprincipletonon‐solartypesofDGaswell.PG&EindicatedthatDGtechnologiesotherthansolar,suchaswind,areactuallymuchmorecomplexandlesscommon,whichcanbeabarrierforcustomerstositeandsuccessfullyinstallduetotherelativelackoftechnicalexpertise,potentialcommunityreaction,andquestionsfrompermittingauthorities.

Apotentialsolutiontothisbarrieristheuseofvirtualnetmetering,whichallowsmultiplecustomerstoobtainbillcreditforelectricityproducedatanothersiteandcountittowardtheirownelectricityconsumption.IntheU.S.,virtualnetmeteringarrangementsareoftenusedby“communitysolar”projects(whenthepowerisgeneratedbysolarPV),whichreferstoarangeofprogramandprojecttypesthatallowgroupsofcustomerstoreceivebenefitsfromasinglesolardevelopment.ThesamestructurehasbeenusedinotherpartsoftheU.S.andEuropeforsmall‐scalewindsystems.Communitysolarprojectscanbebuiltandfinancedbyindependentdevelopers,inwhichcasethearrangementcanbesimilartoathird‐partysolarleaseorpowerpurchaseagreement,orbyutilities,whichcanoffercustomerstheabilitytodirectlypurchaseaportionoftheproject’soutputortoparticipateina“solarrate”.Theseprojectshavethepotentialtotakeadvantageofbettersites(intermsofresource,easeofinterconnection,publicvisibility,etc.),toreducecoststhrougheconomiesofscale,toeliminatethecustomer’sresponsibilityforfinancingcostsoroperationsandmaintenance,tofacilitateparticipationforthosecustomerswhocouldnototherwisebuildsolarPV,andtoenablecustomerstocontinuebenefitingfromtheprojecteveniftheymove.83

However,itshouldbenotedthatmanyofthesamecostallocationconcernsthatapplytoregularNEMinstallationsalsoapplytovirtualNEMarrangements—customersparticipatinginavirtualNEMarrangementmayreceiveasubsidyfromotherratepayers.

5.6 KEY ISSUES AND BARRIERS CaliforniahasmadesignificantprogressaddressingissuesandbarriersrelatedtoDG.Manyoftheissuesandbarrierslistedinthissectionhavebeenatleastpartiallyaddressed,andtheindustryandregulatorsareworkingonmanyothers.TheissuesandbarriersdescribedinthissectionmaylimitorotherwiseaffectthedeploymentofDG,andseveralofthemimpacttheabilitytoreceivethetoutedbenefitsofDG.Thekeyissuesandbarriersidentifiedinthisreportarelistedbelow.

82 The Vote Solar Initiative, “Community Shared Solar: Bringing Solar to the Masses,” presentation by Hannah Masterjohn, July 2012. 83 Solar Electric Power Association, “Utility Community Solar Programs,” presentation by Bianca Barth, July 2012.



Table 5‐3 Key Remaining Issues and Barriers for Customer‐side DG

Financing and Economics

• EquipmentandsoftcostsofDGarehighcomparedtogridelectricity.• Availabilityofgovernmentandutilityfinancialincentivesisbecomingmorelimitedbecausefundsfor

incentiveprogramsaredeclining.

Policy and Regulatory

• PublicresistancetoDGcoulddevelopifnon‐DGcustomersareexcessivelyburdenedwithcoststosubsidizeNEMDGcustomers.

• ThereisalackofincentivestolocateDGinareaswiththegreatestbenefittothegrid;needtoadoptamoretargetedapproach.

Integration

• Lackofmonitoring,forecastingandcontrolcapabilitieslimitstheutilities’abilitytomanageDGintegrationintothedistributionsystem,andabilitytorelyonDGcapacity.

• LackofcapabilitiesintegratingDG(especiallysolarPV)withdistributionandtransmissionmodels.Thisaffectstheutilities’abilitiestoaccuratelysimulateandplanforDG.

• Distributionsystemdesignisnotintendedforinjectionofgenerationleadingtovoltageissues,reversepowerflow,etc.ThisissuewillbecomemorewidespreadasDGpenetrationincreases.

• Inverterstandardsmayneedtobechangedtoallowbettersupportofthegrid.

Miscellaneous

• ProcessingtimesandadministrativedelaysforincentiveapplicationsandinterconnectionapplicationsreducethespeedatwhichDGcanbedeployed.

• LackofsuitableprojectsitespreventsthemajorityofutilitycustomersfrominstallingDGontheirownproperty.


BLACK & VEATCH | Emerging Technologies 6‐1

6.0 Emerging Technologies AlargeamountofresearchanddevelopmentisbeingdoneonemergingtechnologieswhichmayalleviatesomeofthenegativeimpactsandbarrierstogreaterDGdeployment.Themajortechnologiesbeingdevelopedinclude:

Smartinverters

Energystorage

Advancedgridmanagement/smartgridtechnologies

Microgridtechnologies

Thissectiondiscusseseachofthesetechnologiesandtheirpotentialbenefits.

Thedeploymenttimeframeofthesetechnologiesvaries.Therearenumberofdemonstrationprojectscompletedorunderway.GreaterappreciationoftheneedforthesetechnologieswillfollowanincreaseddeploymentofDGsystemsandidentificationofthetechnicalproblemsthatthesenewtechnologiesmaybeabletoresolve.Itisnotknownwhetherthe“tippingpoint”atwhichthesetechnologieswillbecomebeneficial,orevenessential,willoccurwithinthenext1to3yearsorthenext5to10years.However,giventherapidpaceofDGdeploymentinCalifornia,itisreasonabletoproactivelydemonstrateanddeploytheemergingtechnologieswiththegreatestpotentialbenefits.

AlthoughthestatehostsanumberofDGtechnologies,thevastmajorityofDGinCaliforniaissolarPV.SolarPVandwindDGbothhaveissuesassociatedwiththeirvariability,buttheamountofwindDGisverysmallcomparedtosolarPV.OtherDGtechnologiessuchasfuelcellsandinternalcombustionenginesdonotposeallofthesamechallengesasvariablegenerationlikePV.Theyhavetheabilitytobedispatchable,althoughthereiscurrentlynoprocesstoenabledispatchbytheutility.84Thus,becauseofitsdeploymentshareandthecomplexityofissuesassociatedwithvariablegeneration,thissectionwillfocusonemergingtechnologiesrelatedtosolarPV.

6.1 SMART INVERTERS Theinverteristhe“gatekeeper”ofsolarpower,whetherfeddirectlytoanenduser,toanenergystoragesystem,orthroughaninterconnectionontothegrid.Forgridinterconnections,nextgenerationinverters,orsmartinverters,aremachinesthathavespecialfunctionsdesignedtoremedygridfaultsandprotectthequalityofgridpowerbyminimizingtheirimpacttothegrid.Theyareusedforutility‐scalesolarPVsystemsinNorthAmericaandbothutility‐scaleandlargedistributedsolarPVsystemsinGermany.85

Thepotentialforsmartinvertersissignificant.Studieshaveshownthattheymaybeabletomitigatevoltageissuesandincreasethegrid’scapabilitytoaccommodatePVsignificantly.86Smartinvertersmightprovidemanyadvancesincluding:

84 Despite the fact these technologies are more firm than variable renewables, these types of DG systems are typically baseload rather than having dispatch agreements with the utility. This makes it difficult for the utility to curtail these units even during system emergencies. 85 Notholt, “Germany’s New Code for Generation Plants connected to Medium‐Voltage Networks and its Repercussion on Inverter Control”, European Association for the Development of Renewable Energies, Environment and Power Quality, April 2009. 86 Braun, et al., “Is the distribution grid ready to accept large‐scale photovoltaic deployment? State of the art, progress, and future prospects”, Progress in Photovoltaics: Research and Applications, 2010.



Remotemonitoring

Voltageregulation

VArcontrol

Lowvoltageandlowfrequencyride‐through

Rampratecontrol

Curtailmentability

Thesesmartinverterfeatureswouldbeusedincombinationwithdistributedcommunicationinfrastructurestomanagesolarpowerinjectedintodistributionsystemsinamannerthatiscoordinatedamongsolarpowerandconventionalgenerationsources.Theresultcouldbeastrengtheningofdistributionsystemsthroughtheuseofreactivepowertoregulatevoltagealongdistributionfeeders.

Currently,smartinvertersarenotcodecompliantforusewithdistributedPVsystemsintheUnitedStates.Nationalstandards,IEEE‐1547andUL‐1741donotcomportwithmanyofthesmartinverterfeaturesmentioned.However,thesestandardsarevoluntarybyutilitiesandcouldbedecoupledfromRule21toallowuseofsmartinvertersinCalifornia.TheStatecouldwaitfornationalstandardstoberevised,buttheprocessmaytakeyears.Accordingtocode,DGinvertersmustdisconnectfromthegridforfiveminuteswhentheysenseaproblemwiththequalityofgridpowerandnotreconnectuntiltheproblemisresolved.TheintentionofthisrequirementisforPVsystemstobetakenofflinesothegridcanrecoveronitsown.Codealsorequiresthatinvertersdisconnectfromthegridduringpoweroutagestopreventsolarpowerfromharminglinemen.

Inhigh‐penetrationPVscenarios,someresearchersbelievethecurrentU.S.coderequirementscouldcausecascadedisconnectsoflargeswathsofPVsystemsduringgridfaultsandthusexacerbategridinstability.87Smartinvertershavetheabilitytopreventthisbystayingconnectedand“ridingthrough”momentarygridfaults(discussedfurtherinSection4.1.5).Theycanalsoprovidevoltagesupporttothegridduringfaults,thusstrengtheningpowerqualityandthereliabilityofthegrid.Thepowerindustrycallsthistypeofgridsupport“ancillaryservices”.Somesmartinverterscanprovideancillaryservicesatnightinadditiontoduringtheday.

Rampingdownsolarpowersmoothlytoreducesolarpowervariabilityisanotherfeatureassociatedwithsmartinverters.However,smartinvertersalonearenotcapableoframpingdownindividualsolarpowersystems.Energystorageand/oraccuratesolarresourceforecastingcombinedwithautomatedpowercurtailmentarealsoneeded.

Itisimportanttonotethatsmartinverterfeaturesdonotcomewithoutadditionalcost.Thisadditionalcostcouldbequitelargedependingoncommunicationsrequirements(suchasrunninganewfiberopticline)orifenergystorageisincluded.Therefore,smartinvertersarenotasolutiontoallDGissues,andtheircostsmustbeweighedagainstthecostofothermeanstosupporthigherpenetrationPVsuchasreplacingdistributionlineconductors,installingcapacitorbanksinsubstations,etc.

Giventheirreactiveandremedialcapabilities,smartinvertershavegreatpotential;however,therearesignificantchallengestousingsmartinvertersforDG.Inadditiontotheaforementionedstandardsandcostchallengesisthedevelopmentofadistributedcommunicationinfrastructuretosignaltheinverterstodisconnectwhendistributionlinesareseveredorwhengridoperatorsissue 87 “Solar Energy Grid Integration Systems (SEGIS) Program Concept Paper”, US DOE EERE/Sandia, October, 2007.



acommand.Also,aprotocolmayneedtobedevelopedtocoordinatetheoperationofallthesmartinverterssothattheywillworktogetherproperly.Toaddressthecommunicationschallenge,severalsolutionsarebeingexplored:

AsolutionhasbeendemonstratedatLakelandElectricinFloridabySatcon,aninvertermanufacturer,incollaborationwithCooperPowerSystemsandtheFloridaSolarEnergyCenter.ThedemonstrationwaspartoftheDOE’sSolarEnergyGridIntegrationSystemstechnologyaccelerationprogram,usingatechnologycalledpowerlinecommunications.88

Anotherpossibility,mentionedduringBlack&Veatch’sinterviewswiththeutilities,isforutilitiestocontrolinvertersthroughsmartmetersviaZigBeeoranotherwirelesscommunicationprotocol;however,untilthePVindustryhasanapprovedZigBeeinverterprotocolforSmartInverters,thisoptionisnottechnicallyfeasible.

Athirdoptionistoinstituteautonomousorpre‐setfunctionalitiesforsmartinverterstoperforminresponsetocertainvoltageconditions,thusrequiringnocontrolbytheutility.Asnotedinthisreport,thisoptionisbeingexaminedinPhase2oftheCPUC’sinterconnectionproceeding.

Finally,anotherchallengeforsmartinvertersisthatutilitiesarenotrequiredtopayallcustomersfortheancillaryservicestheycouldprovideforgridsupport,especiallyiftheinverterisbehindthecustomer’smeter.

Asnotedabove,theintroductionofautonomoussmartinverterfunctionalitiesoncertainDGsystemsisincludedinPhase2oftheCPUC’sinterconnectionproceeding.

6.2 ENERGY STORAGE Energystoragedevicessuchasbatteries,flywheels,compressedair,ultra‐capacitors,andpumpedstoragehydro,canalsoaidinaccommodatingtheintegrationofvariableDGresourcesintothegrid.WhenPVgenerationdrops,storagedevicescanbebroughtonlinetomitigateoutputswings,toprovidesmoothingorfirming,andtoserveloaduntilotherreservescanbebroughtonline.89Storagetechnologieshavedifferentcharacteristics(suchasstoragecapacity,dischargedurationandcost)thatmakethemmoreorlesssuitedforparticularapplications.Ingeneral,theenergystoragetechnologiesaregroupedintopowerandenergyapplications.Belowaresomepotentialenergystoragesolutionsgroupedbydischargeduration,orenergy,capabilities:

ShortDuration(batteries,flywheel,ultra‐capacitor)

MediumDuration(batteries)

LongDuration(pumpedstorage,compressedairstorage)

88 “Solar Energy Grid Integration Systems: Final Report of the Florida Solar Energy Center Team”, SANDIA REPORT SAND2012‐1395, March 2012. 89 It is also noteworthy that curtailing inverters in advance of steep declines in solar resource using accurate weather forecasting may reduce energy storage capacity required.



Figure 6‐1 Energy Storage Discharge Time and Rated Power Graph90

Energystoragetechnologiescanspanawiderangeofpowercapabilitiesaswell.Figure6‐1aboveisagraphicalrepresentationofpowerandenergycapabilitiesofenergystoragetechnologiescompiledbytheElectricityStorageAssociation(ESA).

Oftheseoptions,batteriesaremostoftendeployedwithPV.Leadacidbatterieshavebeenusedwithoff‐gridPVsystemsfordecades,butarerareamonggrid‐connectedsystems.However,batteriesarenowbeingdemonstratedtoreducethevariabilityofsolarpower,providerampratecontrol,provideancillaryservicessupporttothegrid,improvepowerquality,andforloadshifting—i.e.storingelectricitygeneratedduringoff‐peaktimesandusingitduringpeaktimes.91Batteriesarealsousedincombinationwithothertechnologiestoprovidecontinuoussupportforfacilitiesduringgridoutagesinsystemssometimesreferredtoasmicrogrids,describedlaterinthissection.

Theprincipaltwoimpedimentstobatteriesandotherenergystoragetechnologiesare(1)theirrelativelyhighcosts(exacerbatedbyarelativelackofcostdatapubliclyavailable)and(2)inabilitytofitintoexistingregulatoryandoperationalframeworkthatmakestakingadvantageofmultiplebenefitsfromasinglelocationdifficult.Regulators,includingFERCandtheCPUC,havebeguntorecognizethatenergystoragetechnologiesrequirespecialconsiderationandtomodifytheappropriateproductandcompensationrules.Infact,duetoAssemblyBill2514,theCPUCiscurrentlyconsideringwhethertoimplementspecificprocurementtargetsforenergystoragein

90 Electricity Storage Association 91 “Solar Energy Grid Integration Systems –Energy Storage (SEGIS‐ES) Program Concept Paper”, DOE EERE and Sandia, May 2008.



Californiabyutility,toacceleratedeploymentanddecreasecoststhrougheconomiesofscale.92CAISOhasalsobegunconsideringaprocessforenergystoragetoparticipateintheCAISOwholesalemarket,asdiscussedinSection5.3.3.Inaddition,meteringandmonitoringprotocolsforenergystoragearestillbeingrefined.

Researchersarealsoworkingtobringdownthecostofbatterieswhileimprovingtheirperformancethroughtechnologicalinnovations.Recentadvancesinbatterytechnologieshavebeendrivenbymobileelectronicsandelectricvehicles.LeadacidbatteriesarethetraditionalcomplementtosolarPVsystems,butlithiumionbatterieswithuniquecathode,anodeandproprietaryelectrochemicalvariantsarequicklybecomingpopularoptions.Today’sresearchislargelyfocusedonincreasingtheenergydensityofbatterieswhiledrivingdownthebatterycostandimprovingbatterysafety.Onebatteryoptionunderdevelopmentthatshowspotentialforimprovingtheenergydensityofbatteriesisthezinc‐airbattery.Zinc‐airbatteriesmaybelessexpensivethanlithiumion,andlesstoxicandlighterthanlead‐acidbatteries.Additionally,lithium‐sulfurandlithium‐airbatteriescouldfurtheradvancethebatteryenergydensitybyemployingnanostructuresandnovelelectrodecombinations.93

Energystoragedevicesdonotnecessarilyneedtobeco‐locatedwithPV.Theycouldbewidelydistributedacrossthegridtomeetmultipleneedsindifferentapplicationsatvariousscales—fromlargecentralizedstoragedevicesatsubstations,tocommunityenergystoragedevicesondistributionfeeders,tosmalldevicesatindividualhomes(seeFigure6‐2).Forexample,larger,centralizedenergystoragesystemsdeployedforcommercialpurposesarebeingtestedtoshavepeakloadandcouldbeusedtofirmsolarpower.94,95Centralenergystoragesystemsincludebothmetalionvarietiesandflowbatteries,devicesthatuseelectrolyticfluidstostoreenergy.Batteriesinelectricvehiclesarealsobeingconsideredasanenergystoragecomponent.Thoughtheappropriateinfrastructurewouldneedtobedeveloped,theycouldbeusedtofirmsolarpowerandreducepeakloads.96Understandingtheoptimummixoftechnologiesandtheirplacementisachallengeforthefuturecost‐effectivedeploymentofenergystorage.Inaddition,moreresearchisneededontherampingresponsivenessofvarioustypesofstoragetodeterminewhetheritcouldbewidelydeployedacrossthegridtomeetmultipleneedsindifferentapplicationsatvariousscales—fromlargecentralizedstoragedevicesatsubstations,tocommunityenergystoragedevicesondistributionfeeders,tosmalldevicesatindividualhomes.

92 E. Wesoff, “California Energy Storage Bill AB 2514 Signed Into Law by Governor,” Greentech Media, Sept. 2010. http://www.greentechmedia.com/articles/read/vc‐cmeas‐gunderson‐on‐utility‐scale‐storage/. The CPUC’s storage proceeding is Order Instituting Rulemaking Pursuant to Assembly Bill 2514 to Consider the Adoption of Procurement Targets for Viable and Cost‐Effective Energy Storage Systems, R.10‐12‐007, Issued December 21, 2010. 93 Yang, Y. McDowell, M. Jackson, A. Cha, J. Sae Hong, S. Nano Lett. 2010, 10. 1486‐1491. 94 “Public Interest Energy Research (PIER) Program Final Project Report, Demonstration of ZBB Energy Storage Systems”, July 2012. 95 “Energy Storage Shaping the Future of California’s Electric Power System”, California Energy Storage Alliance (CESA) and Strategen, Intersolar, June 2011. 96 “Vehicle‐To‐Grid Technology Gains Some Traction”, New York Times, July 22, 2009.



Figure 6‐2 Potential Applications of Energy Storage (Black & Veatch)

6.3 ADVANCED GRID MANAGEMENT / SMART GRID TECHNOLOGIES Asmentionedpreviously,thevariablegenerationofsolarPVsystemsmayimpactnormalgridoperations.Gridoperatorsareconstantlyworkingtobalancesupplyanddemandonthegrid.Theymustmaintainpowerqualitybyregulatingvoltage,current,andfrequency.SmartgridtechnologieswouldallowincreasedawarenessandcontrolofthedistributionsystemandmayenablesolutionstomanyDGintegrationissues.SmartinvertersforDGonthecustomersidehavethepotentialtocomplementsmartgridtechnologiesontheutilitysideofthedistributionsystem,andsmartgridtechnologiescanalsosupporttheuseofenergystorage.

AnumberofeffortsintheareasofsmartgridinfrastructureareunderwaytoprepareforhighpenetrationDGPV(Figure6‐3).Thissectiondescribessomepotentialsmartgridsolutions.



Figure 6‐3 Emerging Smart Grid Infrastructure in Support of High Penetration DG PV

EnhancedVoltageMeasurementandAutomatedControl–Voltageregulationisacorefunctionofutilityoperations,butDGhasthepotentialtomakevoltageregulationsignificantlymoredifficult.However,widespreaddeploymentofadvancedmeteringinfrastructure(AMI),or“smartmeters,”hascreatedanewtechnologyenablerthatcanimprovevoltagecontroleffectivenessandhelpmitigatesomeoftheissuesrelatedtoDG.SmartgridandAMIsystemshavelaidthefoundationforimprovedvoltagemanagementbyprovidingreliable,two‐waycommunicationsbetweennumerousfielddevices.Intelligentelectronicdevices(IEDs)incombinationwithsubstation/feedercontrolornewcentralizeddistributionmanagementsystems(DMS)canmeasurevoltagefromeverygridendpointandprovideimprovedvoltagecontrols.SystemssuchasAdvancedVoltVArControl(AVVC)canallowenhancedcontrolofvoltageandVArflow.AVVCallowsamoreefficientuseoffieldcapacitorbanksandotherequipmenttooptimizepowerflow.

LoadControl–Directloadcontrolallowsutilitiestoturnonandoffcertainloads(i.e.facilities,equipment,appliances,etc.)duringcertainperiodswhenelectricitydemandishigh,orwhenintermittentdistributedgenerationrampsupordownsuddenly.Thiscanenableutilitiestomanageandoptimizeanincreasinglydynamicelectricpowergridonwhichpowerisinjectedatdistributedlocationsthroughoutthesystem.

Re‐Sectionalizing–Gridre‐sectionalizinginvolvestheautomaticreroutingofpowerfromonepartofthegridtoanother.Asthedistributionsystembecomesmoredynamic,andvariableDGsourcesareaddedinlargequantities,itwillbeimportantforutilitiestobeabletomanagepowerflowandvoltageamongdifferentsectionsofthegrid.Widespreaduseof

Solar PowerEnergy Storage

Demand Response

Time of Use Pricing Data

Generation & Load

ForecastingData

Central Generation Balancing

SCADA:Supervisory Control & Data

Acquisition

Central Energy Storage Balancing

Distributed GenerationHomes & Buildings

Central GenerationCAISO & Utilities

Emerging Smart Grid Infrastructure in Support of High Penetration DG PV



automatedswitchingsystemswillbeanimportantcomponentofthissolution.Thefigurebelowillustratesanexampleofre‐sectionalizing.

Figure 6‐4 Re‐sectionalization Example

DistributionManagementSystem(DMS)–DMSisanintegrateddecisionsupportsystemwherebyalloperationalaspectsoftheutility’sdistributionsystemaremadevisibleandoperablefromacentralsource.Advancedalgorithmsareusedtooptimizethesysteminreal‐timebasedonvaluesprovidedbyAMIandsupervisorycontrolanddataacquisition(SCADA)systems.ADMScanbeenhancedwithcentralizedvolt/VARoptimization(VVO)basedonanon‐linepowersystemmodel.97ImplementingaDMSwithVVOisamajorinitiativethatcouldtakemultipleyearstocomplete;however,ithasmanybroadbenefits.ForintegrationofDG,aDMScanhelpautilitymaximizeitsmultipledistributedenergyresourcestakingintoaccountloadforecasts,weatherforecasts,DGoutputforecasts,electricvehicles,andstorage.Thisincludeshandlingresourcedispatching,initiatingdemandresponseprograms,verifyingandvalidatingactivedemandresponseprograms,mitigatingvoltageissues,andmanaginganetworkedpowersystemgridwithbi‐directionalflows.Ifcommunicationprotocolsareharmonized,aDMScouldalsoprovidedirectcommunicationwithDGsmartinvertersthatwouldfurtherenhancegridoperations.

Smartgridtechnology,andtheadvancedgridmanagementsolutionsthatitenables,isanemergingfield.Additionalsmartgridtechnologiesnotcoveredheremayhelpaddressotherchallengesinthefuture.

6.4 MICROGRIDS Onesubsetoftheemergingsmartgridinfrastructureis“microgrids,”whichcouldbeparticularlyimportantforgridintegrationofDGinthefuture.Amicrogridisasmallpowersystemthatincorporatesself‐generation,distribution,sensors,energystorage,andenergymanagementsoftwarewithaseamlessandsynchronizedconnectiontoautilitypowersystem.98Amicrogridcan

97 VVO is a method of optimizing distribution power delivery, which utilizes distribution automation, SCADA, and AMI to reduce energy consumption and peak energy capacity demand by improving system power factor. VVO is based on sophisticated algorithms and logic from the on‐line power flow application, which is another application within the DMS suite. 98 http://www.smartgridlibrary.com/



operateinparallelwiththeutilityorindependentlyasanislandfromthatsystem.Itspurposeistoincreasereliabilityforcustomerswithinthemicrogridbymaintainingpowerevenwhentheutilitygridisexperiencinganoutage,andalsotoallowlocalizedcontrolofenergyinfrastructure.Theoretically,microgridscanalsosupportthelargerutilitygridbydecreasinglocalloadandsafelyexportingpowerattimeswhentheutilitygridisstressed.Inaddition,microgridshavethepotentialtoprovideanumberofserviceswhichwouldenablegreaterDGpenetration:

Seamlessbidirectionalenergyflow

Voltage,frequencyandVARcontrol

Eliminationofmomentaryoutagesassociatedwithtypicalstandby/backuppowersystems

Pricedrivenloadmanagement,i.e.demandresponsebasedondynamicpricesignals

Self‐healingnetworksthroughintegrationoffeederautomation

Morerobustcommunicationandcontrolofthedistributionsystem

Anumberofutilities—includingSDG&EandSMUD—areinvestigatingthecostsandbenefitsofmicrogridsthroughdemonstrationprojects,usuallyfundedbygrantsfromtheU.S.DOEandtheCEC.SDG&EhassignificantmicrogridprojectsoperatingwithinitsserviceterritorywhichincorporateDGasoneofthecorecomponents:

1) UniversityofCaliforniaSanDiego(UCSD)Microgrid:TheUCSDcampushasinvestedsignificantresourcesintyingtogetherdistributedPVresources,abiogasfuelcell,andanaturalgascentralcogenerationplantwithresponsiveloadsincampusbuildingsthroughanincreasinglysophisticatedcentralcontrolsystem.Itisclaimedthattheflexibilityofthis42MWmicrogridallowsthecampustosavesignificantamountsofmoneyonitsutilitybillsannually,andprovidesupto85percentofcampuselectricity.Also,UCSDhasbeenabletoreduceitslocalloadsandexportpowertotheSDG&EgridduringemergenciessuchastheblackoutofSeptember2011andthewildfiresof2009.99Thecampuswasabletoswitchfromimporting3MWofpowertoexporting2MWofpowerwithin30minutesduringthe2009incidentandtherebyprovidecriticalsupporttothelargergrid.100TheUCSDmicrogridisanevolvingandongoingproject,fundedbytheuniversity,andwillcontinuefortheforeseeablefuture.101

2) BorregoSpringsMicrogridProject:ThisprojectintheSanDiegoareaisdesignedasapilot‐scaleproofofconceptofhowinformation‐basedtechnologiesanddistributedenergyresourcesmayincreaseutilityassetutilizationandreliability,includingcontributionsfromanumberoforganizationsandvendors(IBM,HorizonEnergyGroup,Motorola,PacificNorthwestNationalLabs,Oracle,AdvancedEnergyStorage,UniversityofSanDiego,LockheedMartin,GridPoint,andXanthus).Itsgoalsareto:1)reducefeederpeakloadbymorethan15percentthroughDG,energystorageandloadmanagement;2)demonstrateVARmanagement;and3)developandtestavarietyofdistributionmanagementsystemsandcapabilities—e.g.,advancedmeteringinfrastructure,outagemanagementsystems,feederautomationtechnologies,pricedrivenloadmanagement,andintentionalislanding.Itincorporatesawidevarietyofcustomer‐sidetechnologies,includingrooftopsolarPV,batterystorage,grid‐friendlyappliances,demandresponsethroughremote‐controlledthermostats,andplug‐inhybridelectricvehicles.ThesmalltownofBorregoSprings,eastof

99 http://blog.rmi.org/the_ucsd_microgrid_showing_the_future_of_electricity_today 100 http://www.rmi.org/nations_largest_microgrid_online_esj_article 101 http://sustainability.ucsd.edu/initiatives/energy‐production.html



SanDiego,alreadyhadalargeamountofsolarPVinstalledevenbeforethismicrogridprojectbegan.Theprojectincludesthreedifferenttypesofbatteryenergystorage(alargebatteryatthesubstation,threemedium‐sizedbatteriesonadistributionfeeder,andsixsmallbatteriesatindividualhomes);amicrogridyardatthesubstationwithdieselgenerators,transformers,aSCADAswitch,andacontrolvan;homeareanetworkscapableofrespondingtopricesignalsandreliabilityevents,withsmartappliancesthroughoutthehome;andasignificantamountofdistributedPVthroughoutthecommunity.ThemicrogridwillbeownedbySDG&E.Thisprojectisbilledasthefirstlarge‐scaleutility‐ownedmicrogridintheU.S.,withthegoalofprovinganalternativeservicedeliverymodel,islandingrealcustomers,andestablishingatemplateforotherutilitiestofollow.Designandplanningbeganin2010andtheprojectisexpectedtobecompletedin2013.102

Mostmicrogridprojectstodayinvolvesomedegreeofretrofittoexistingdistributionsystems,andalsoincorporateawiderangeofnewtechnologiesandsoftwareforresearchpurposes.Thus,thereislimiteddataonthecostsofnewcommercialmicrogridsimplementedinrealsettingswithonlythetechnologyneededfortheparticularlocationinquestion.However,gatheringfurtherdataoncommercialmicrogridcostswouldbeusefulfromtheperspectiveofunderstandingthecostofintegratingDG,sincemanyofthefeaturesofmicrogridsmaybenecessaryinfuturedistributionsystemswithhighpenetrationsofDG.

102 SDG&E, “SDG&E Borrego Springs Microgrid Demonstration Project,” presentation by Thomas Bialek, June 2012.


BLACK & VEATCH | Recommendations for Future Study 7‐1

7.0 Recommendations for Future Study DistributedgenerationdeploymentontheCaliforniadistributionsystemhasbeenincreasingoverthepastseveralyears.Withthisincrease,thereareseveralunknowns.WhilethisreportdescribesmanyoftheimpactsofDG,nearlyalloftheinformationisqualitativeandbasedonlimitedobservations.ThereismuchtobegainedfromamoredetailedandquantitativeinvestigationofthecurrentandfutureimpactsofDGontheelectricgridoftheIOUsinCalifornia.Suchaninvestigationshouldrelyon“real‐world”fielddatatotheextentpossible.QuantificationofDGimpactsisvitallyimportanttotheDGindustry,utilitiesandpolicymakers.ItwillinformdecisionsthatseektofurtherDGgoalswhileminimizingthenegativeimpactsofDGandmaximizingitsbenefits.

Black&Veatchhasdetailedascopeforsuchastudy,includedinAppendixC.Insummary,thistypeofinvestigationwouldaddressthefollowingquestions:

HowisDGaffectingthedistributionandtransmissionsystemcurrently,andhowwillthischangeinthefuture?

HowmuchmoreDGcouldbedeployedonthesystemifsitingwereoptimizedforminimalimpactsandenhancedbenefits?




AnsweringthesequestionscanhelpcreateaclearroadmapofthegrowthpotentialofDGandenableCaliforniatoanticipatepotentialchallengestoDGdeployment.Acomprehensivestudycanhelpanswerthequestionsbysummarizingtheanalysisthathasbeendonetodate,analyzingtheavailabledataforexistingsystems,andforecastingimpactsoffuturegrowth.

Suchananalysisshouldstudythefiveprimarysectionslistedanddescribedbelow:

1. ExistingConditions–Aliteraturereviewandquantitativeassessmentofthefollowing:

a. StatusofDGonthedistributionsysteminCaliforniab. TrendsinDGdeployment

c. StatusofDGinotherstatesandcountries

2. ImpactsandCostsofDG–CompiledataonDGinCaliforniaandextractmeaningfultrendstoquantifycurrentimpactsandcostsofDGinCalifornia.

3. PotentialBenefitsofDG–Quantifybenefits(or,insomecases,costs)ofDGduring

operationsuchaslinelosses,avoidedenergy,andreducedpeakdemand.4. Solutions–Identifyanddiscusspotentialsolutionsorstrategiesthatmaymitigateimpacts

andenhancebenefitsofDG.

5. ScenarioAnalyses–PerformmodelingthatidentifiesdifferentDGpenetrationscenariosandtheassociatedimpacts.ThismayincludemodelingimpactsatdifferentDGpenetration

levels,differentfeedertypes,theeffectofsolutionsidentifiedinsection4,andvariousDG

technologies.


BLACK & VEATCH | Recommendations for Future Study 7‐2

Theanalysisshouldfocusonthestatus,impacts,costs,andbenefitsofDGonthedistributionsystem,ratherthanthetransmissionsystem,anditshallbeatechnicalandquantitativeanalysis.

Inadditiontotheabovedescribedanalysis,thefollowingareasshouldalsobestudied:

Reportingissues:reviewNEMinstallationdataandcompareagainstincentiveprogramdatabases

ImpactofDG(PVandnon‐PV)penetrationifincentivesandsubsidiesarenotsustainedandwhatothermechanismscanhelpsustainthemarket

Developmentofuser‐friendlymodelsfortransmission,distribution,substationandfeederlevelimpactswithincreasedDGpenetration.ThisshouldincludetransientanddynamicmodelingofDGsystems.

Developaconsistentapproachtodistributionmodelingacrossutilities


BLACK & VEATCH | Installed Capacity Data A‐1

Appendix A. Installed Capacity Data

Toensuretransparency,datasourcesforinstalledDGcapacityineachDGprogramsandthemethodsusedtofiltereachdatasetarelistedinTableA‐1below.Inallcases,theinstalledcapacityreportedbelowforeachprogramiscurrentasoftheendof2011.

Table A‐1 Data Sources and Data Filtering

PROGRAM DATASOURCESTATUS(ES)INCLUDED

DATEFILTERUSED

SYSTEMSIZEFIELDNAME

CSIGeneralMarket

CSIWorkingDataSet(6‐27‐2012)

OnlineIncentiveClaimFormSubmitted,IncentiveClaimRequestReview,SuspendedIncentiveClaimRequestReview,PendingPayment,Completed,PBI‐InPayment

FirstIncentiveClaimRequestReviewDatepriorto2012

CECPTCRating

MASHMASHSemi‐AnnualProgressReport,Feb.2012

N/A N/A CEC‐ACMW

SASH2011Q4SASHProgramStatusReport,Jan.2012

N/A N/A TotalkW(CEC‐AC)

SGIP CPUCDatabaseIncentiveClaimReview,PendingPayment,Completed

IncentiveClaimReviewDatepriorto2012

Capacity[kW]

ERP CECDatabase PaidDatePaidpriorto2012

SystemSize(Watts)

NSHP CECDatabase PaymentApprovalPaymentApprovalDatepriorto2012

SystemCapacity

SB1POUCECSB1POULifeofProgramandYearlyStatisticsfor2011

N/A N/A TotalkWInstalled

NEMCPUCInterconnectionDataRequest,Q12012

N/AInterconnectionYearpriorto2012

“TotalInverterNameplate(kW)”‐PG&E;“NEMCapqualified(kW)”‐SCE;“NameplateRating(kW)”‐SDG&E

FIT‐AB1969IOUAB1969ContractSpreadsheets

Online/Operational

ActualCOD/OperationalDate/NewOnlineDatepriorto2012

Capacity(kW)/MW

FIT‐SB32 N/A N/A N/A N/A

SPVPCPUCRPSContractsDatabase

Operational/OnlineOnlineDatepriorto2012

MinMW

RAM N/A N/A N/A N/A


BLACK & VEATCH | Peak Demand Impact Analysis Methodology B‐1

Appendix B. Peak Demand Impact Analysis Methodology

Indeterminingthepeakdemandimpact,Black&VeatchusedthetotalinstalledDGcapacityasofthedateonwhichthepeakdemandoccurred,whichwasSeptember7th,2011.ThetotalinstalledDGcapacityontheCAISOgridasofSeptember7th,2011bytechnologyispresentedinTableB‐1.

Table B‐1 Total Installed DG Capacity on CAISO Grid as of 9/7/2011

TECHNOLOGY MWINSTALLED

SolarPV 892

Wind 12

RF

FC 23

MT 4

ICE 12

Non‐RF

FC 18

MT 20

GT 31

ICE 142

AES 2

Total 1,156

SolarPVPeakDemandImpactBlack&Veatchobtainedactual15‐minuteproductiondataforsolarPVsystemsinstalledundertheCSIprogramandSGIP.MeteredsystemsforwhichthisdatawasavailableconstituteonlyasampleofthetotalPVinstallationsontheCAISOgrid,soitwasnecessarytocalculatepeakhourcapacityfactorsbasedonthisproductiondataandapplythesefactorstotherestofthePVsystemswhichwerenotmetered.Tocapturethediversityincapacityfactorsamongthemeteredsystems,thesystemswerecategorizedaccordingtovarious“strata.”ThesestrataareshowninTableB‐2.



Table B‐2 Strata Used to Categorize Solar PV Installations

PROGRAMPROGRAM

ADMINISTRATOR

INCENTIVETYPE/SYSTEM

SIZE LOCALEINSTALLATIONYEARGROUP

• CSI(incl.MASH&SASH)

• SGIP• ERP• NSHP

• PG&E• SCE• SDG&E/CCSE• SCG

• EPBB<10kW• EPBB≥10kW• PBI<10kW• PBI≥10kW

• Inland• Coastal

• 2001‐2003• 2004‐2006• 2007‐2009• 2010‐2012

Eachcombinationofstratawasclassifiedasa“bin”,andallmeteredsystemswereassignedtoonespecificbin,e.g.“CSI/SCE/EPBB<10kW/Coastal/2007‐2009”.Thetotalinstalledcapacityineachbinwasthencalculated.TheactualproductioninkWhofallsystemswithineachbinwasthensummedforthefour15‐minuteintervalscomprisingeachhour—e.g.thefourintervalsbeginningat4pm,4:15pm,4:30pm,and4:45pmonthepeakdaywassummedforthehourbeginningat4pm.ThiskWhsumforeachbinduringeachhourwasthendividedbythetotalinstalledcapacityofthatbintocalculatethehourlycapacityfactorforeachbin.

Afterdevelopingrepresentativehourlycapacityfactorsforthebins,thecapacityfactorsweremultipliedbythetotalinstallations,bothmeteredandnon‐metered,ineachcorrespondingbintocalculatethetotalhourlygenerationfromeachbin.Finally,thetotalhourlygenerationwassummedforallbins.TheresultingtotalforthepeakdemanddayisshowninFigureB‐1onthenextpage.



Figure B‐1 DG Solar PV Operating and CAISO Load on September 7, 2011

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0

100

200

300

400

500

600

700

800

900

1,000

CAISO Load

(MW)

Solar PV Operating (M

W)

CSI

SGIP

CEC

All Solar PV

CAISO Load

Peak Solar PV Output: 621 MW

12 am 1 2 3 4 5 6 7 8 9 10 11 12pm 1 2 3 4 5 6 7 8 9 10 11 12am




TheresultingpeakhourcapacityfactorsforeachprogramandadministratoraresummarizedinandTableB‐4below.

Table B‐3 Peak Hour Capacity Factors for Solar PV by Program

PROGRAM PEAKHOURCAPACITYFACTOR

CSI–EPBB 0.26

CSI–PBI 0.26

SGIP 0.23

ERP 0.23

NSHP 0.26

AllPrograms 0.25

Table B‐4 Peak Hour Capacity Factors for Solar PV by Program Administrator

PROGRAM PEAKHOURCAPACITYFACTOR

PG&E 0.28

SCE 0.23

SDG&E/CCSE 0.18

AllAdministrators 0.25

WhilethissolarPVpeakdemandimpactanalysisreplicatestoalargeextenttheanalysisconductedpreviouslybyItronforthe“CPUCCaliforniaSolarInitiative2010ImpactEvaluationFinalReport”,Black&Veatch’smethodologyisnotidentical.

Non‐SolarPVPeakDemandImpactFornon‐solargeneration(fuelcells,microturbines,gasturbines,andinternalcombustionengines),the“CPUCSelf‐GenerationIncentiveProgramEleventh‐YearImpactEvaluation”providethepeakdaygenerationhourlycapacitycurvesforthesenon‐PVtechnologies.AsshowninFigureB‐2,thegenerationprofileforthesetechnologiesarenearlyflatthroughouttheday.



Figure B‐2 Peak Day Generation Profiles for Non‐PV Technologies

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0

20

40

60

80

100

120

140

160

CAISO Load

(MW)

Non‐Solar DG Operating (M

W)

Internal Combustion Engines

Fuel Cells

Microturbines

Gas Turbines

All Non‐Solar DG

CAISO Load

Peak Non‐Solar DG Output: 108 MW

12 am 1 2 3 4 5 6 7 8 9 10 11 12pm 1 2 3 4 5 6 7 8 9 10 11 12am




Thepeakdemandcapacityfactorswerealsoreportedinthe“CPUCSelf‐GenerationIncentiveProgramEleventh‐YearImpactEvaluation”preparedbyItroninJune2012.TheseareshownbelowinTableB‐5.

ThetotalinstalledcapacityineachofthesetechnologycategorieswasmultipliedbythecorrespondingpeakcapacityfactortocalculatethepeakdemandimpactofeachinMW.Sincepeakcapacityfactordatawasnotavailableforwindturbinesandadvancedenergystoragesystems,theywereassignedacapacityfactorofzero,i.e.theywereassumedtohavenoimpactonpeakdemand.

Table B‐5 Peak Hour Capacity Factors for Non‐PV Technologies

TECHNOLOGY PEAKHOURCAPACITYFACTOR

WindTurbines 0.00

RenewableFuels

FuelCells 0.84

Micro‐turbines 0.08

GasTurbines 0.00

InternalCombustionEngines 0.49

Non‐RenewableFuels

FuelCells 0.54

Micro‐turbines 0.39

GasTurbines 0.83

InternalCombustionEngines 0.32

AdvancedEnergyStorage 0.00


BLACK & VEATCH | Future DG Study C‐1

Appendix C. Future DG Study

ThereismuchtobegainedfromamoredetailedinvestigationofthecurrentandfutureimpactsandbenefitsofDGontheelectricgridoftheinvestor‐ownedutilities(IOUs)inCalifornia.Suchaninvestigationwouldaddressthefollowingquestions:

HowisDGaffectingthedistributionandtransmissionsystemcurrently,andhowwillthischangeinthefuture?

HowmuchmoreDGcouldbedeployedonthesystemifsitingwereoptimizedforminimalimpactsandenhancedbenefits?




AnsweringthesequestionscanhelpcreateaclearroadmapofthegrowthpotentialofDG,andtoenableCaliforniatoanticipatepotentialchallengestoDGdeployment.Acomprehensivestudycanhelpanswerthem,bysummarizingtheanalysisthathasbeendonetodate,andanalyzingtheavailabledataforexistingsystems,andforecastingimpactsoffuturegrowth.

Thereareanumberofprojectsandexistingstudiesthathavebeenperformedthataddressthestatus,impactsandbenefitsofDG.Thereareseveralstudiescurrentlybeingperformedwithsomenotableeffortsnowunderwaylistedbelow:

CPUCCSIResearch,Development,Demonstration,andDeploymentPrograms

DOE'sHighPenetrationSolarDeploymentProjects

CPUCStatewideCost‐BenefitsAnalysisofNEM(E3)

CSIMarketTransformationStudy(Navigant)

CPUCRenewableDistributedGenerationTechnicalAnalysis(Black&Veatch)

SanDiegoNEMStudy(Black&Veatch)

TheanalysisperformedaspartofthefutureDGstudyproposedshouldnotduplicateanalysisavailablefromotherstudies,butleverageexistinginformationandcompileitinausefulformattoanswerthequestionsabove.Anewanalysisshouldintelligentlyaggregateavailableinformationandprovideacomprehensivereviewtoextractmeaningfultrendsthataddressopenquestions.Thisstudywillincludefiveprimarysections:

1. ExistingConditions2. ImpactsandCostsofDG

3. PotentialBenefitsofDG

4. Solutions5. ScenarioAnalyses



Theanalysisshouldfocusonthestatus,impacts,costs,andbenefitsofDGonthedistributionsystem,ratherthanthetransmissionsystem,anditshallbeatechnicalandquantitativeanalysis.

1) ExistingConditionsAssessment

Tasksunderthisfirstsectionwillconsistlargelyaliteraturereviewofexistingstudies(includingthereportslistedabove)andaquantitativeassessmentoftheexistingsystemtocomprehensivelydocumentthecurrentstatusofCalifornia’sdistributionsystemandDGinCalifornia.

a. First,reviewthestatusofthedistributionsysteminCalifornia;documentthedifferencesbetweenutilitiesinCaliforniaintermsofthevintage(new,old),operationalcharacteristics(automated,manual,un‐operated),andotherrelevantaspectsoftheirdistributionsystems.UnderstandhoweachutilityisdealingwithDGanddifferentapproaches.ReviewandunderstandthetestimonywhichresultedintherecentRule21modifications.

b. Secondly,studythetrendsinDGdeploymenttodate.Generally,thisstudyshouldanswerthefollowingquestions:WhereisDGbeinginstalled?WhatfeederscurrentlyhavethehighestpenetrationofDG,andwhatimpactsaretheyseeing?IsthedeploymentofDGrandomintermsoflocation,orclusteredinawaythatcanbepredicted?IsclusteringcausinganegativeimpactthatcouldpreventfurtherDGfrombeingdeployed?Morespecifically,thisstudyshouldassesstrendsbasedonsystemsizecategories,suchaslarge(3‐20MWthatareutilityownedorownedbyIPPswithcontractswithutilities),medium(1‐3MWthatarelikelypartofthefeedintariffprograms),andsmall(0‐1MWwhicharegenerallyresidentialorcommercialinstallationsundervariousincentiveprograms).Specificquestionsundereachsystemsizecategoryshouldbeanswered:

a. Large:

HowmanyoftheseDGprojectsaretransmissiongridconnectedandhowmanyconnecttodistributionandwherearethey?

HowmanyDGprojectsexceedtheloadsonthedistributionlinestheyareconnectedto?

AreanyoftheselargeDGinstallationslocatedonlongruraldistributionlines?

WhatadditionalupgradeshavebeenrequiredtoaccommodatetheselargeDGprojects?

Arethereanyexampleswheresystemupgradeshavenotbeenrequired?

HaveutilitiessitedanyoftheselargeDGprojectstomaximizebenefits?

Whatneedstobedonetomeasureandunderstandthebenefitsandcostsoflargeinstallations?

b. Medium:

HowmanyoftheseDGprojectsexistandwherearethey?

Whatpenetrationlevelisachieved?



ArethereanyexampleswhereseveralmediumsizeDGprojectsarelocatedononedistributionline?

Towhatextenthavesystemupgradesbeenrequiredformediumsizesystemsoraggregationsofmediumsizesystems?

HaveutilitiessitedanyofthesemediumsizeDGprojectstomaximizebenefits?

Whatneedstobedonetomeasureandunderstandthebenefitsandcostsoftheseinstallations?

c. Small:

Howmanynewsolarhomecommunitiesexist?

Whatpenetrationlevelsexistonthedistributionlinesthesecommunitiesconnectto?

Arethereanylocationswheremultiplehighpenetrationsolarhomecommunitiesconnecttoonetransmissionline?

Whensuchnewsolarhomecommunitiesaredevelopedandimplemented,areanyspecialupgradesmadetooperatedistributionsystemortomeasuretheimpactsofthehighsolarDGpenetrationlevels?

Whatneedstobedonetomeasureandunderstandingthebenefitsandcostsofexistinghighpenetrationsolarcommunities?

c. Finally,includeastudyofthestatusofDGinotherstatesandcountries.HowareothersdealingwithDGimpacts?LikelycandidatesincludeHawaii,GermanyandDenmark.

ThisanalysisshouldprovideausefuldefinitionofDG.ShouldDGincludethosesystemsofacertainsizeconnectedtothetransmissionsystem?ShouldthedefinitionofDGbelimitedtosystems,ofanysize,connectedtothedistributionsystem?

2) ImpactsandCostsofDG

Todate,impactsofDGonthedistributionandtransmissionsystemsarenotwellunderstood.ThereisatremendousamountofdataavailableaboutDGsystemsthroughoutCalifornia,thoughthedataisoftenoutofdate,ofpoorquality,orkeptinobscurelocationsthatlimitaccess.Furthermore,thereappearstobeverylimiteddataabouttheeffectofDGontheutilities’distributionsystems.CompilingthisdataandextractingmeaningfultrendswouldsupportourunderstandingofthecurrentimpactsofDGandtheircosts.Thefollowingdatasetscouldbeused:

Customer‐sideDGsystemsreceivingincentives:

● CSIWorkingDataSet

● SGIPdataset

● ERPdataset

● NSHPdataset



IOUDGinterconnectiondatasetsandincludinganysystemupgradecostsidentifiedineachapplication(includingNEMandnon‐NEMinstallations)

WholesaleDGsystemsundervariousstateprograms:

● FIT–AB1969

● FIT–SB32

● RAM

● SolarPVPrograms

● FIT–AB1613

IOUWholesaleDistributionAccessTariff(WDAT)interconnectionqueues

CAISOinterconnectionqueue

UnderstandingtheimpactsandcostsofDGinvolvescompilingthereal‐worlddataavailablefromthesourceslistedaboveandothers.Inaddition,availabledataondeployedenergystoragesystemsshouldbecollected,datagapsshouldbeidentified,andresearchstrategiesforfillingthosegapsshouldbecreated.Fromthisdataandotherrelevantdatasources,aplotcanthenbecreated,similartothatshowninFigureC‐1.FigureC‐1showsthehypotheticalincrementalcostofinstallingDGonafeederoverarangeofpenetrationlevels.Thisgraphshouldbefilteredfortheappropriateattributesbecauseeachutilityoperatesdifferently,feederdesignsarehighlyvariableandcanbecharacterizedbyanumberoffactors(e.g.urbanvs.rural),andbecausethesizeofaDGsystemhasaneffectonitsimpacttothedistributionsystem.Theseattributesmayinclude,butnotbelimitedtothenameoftheutility,locationoffeeder,andsizeofDGsystem.

FigureC‐1alsoreflectsthehypotheticallevelofeffortneededtointerconnectagivenamountofDG.Forexample,atlowpenetrationlevels,noupgradestotheDGsystemmaybeneeded;however,whenpenetrationincreasestoacertainpoint,itcouldbethatchangestosystemprotectionschemesordevicesmaybenecessary.

TheintentofthisgraphistoconveyanunderstandingofwhatDGpenetrationlevelscauseimpactsandrequireaction.ThedifferentcurvesinthisgraphilluminatechangesinDGintegrationcosts,basedondifferentsystemscenarios,andcanbeextrapolatedtoforecastimpactsandcostsofDG.

However,itshouldbestressedthatthefigureishypothetical.Itpositsthatcostsincreaseaspenetrationonafeederincreases,andthatdifferentfeedertypesmighthavedifferent,discerniblerelationshipsbetweencostsandpenetration.Infact,neitherofthesemaybecorrectassumptions.PenetrationlevelmaynotbealargedriverincostsandimpactsofDG.Akeyobjectiveofthistaskwillbetotesttheseassumptions.



Figure C‐1 Sample Graph Showing Interconnection Costs Relative to Penetration Level

3) PotentialBenefitsofDG

ManystudieshavesuggestedawidevarietyofpossiblebenefitsassociatedwithDGsuchasareductioninpeakdemand;reductioninlinelosses;deferralsofdistributionsystemupgrades;andincreasedreliabilitybecauseofthepresenceofredundantenergysources.However,asshowninthisstudy,veryfewofthesebenefitsarecurrentlybeingadequatelyquantified.Infact,someofthepurportedbenefitsmayactuallybemanifestedascosts.Forexample,ratherthandeferringdistributionupgrades,utilitiesmaybeupgradingtheirdistributionsystemstoaccommodateDG.Finally,itisnotknownifthevalueorresponsibilityforthesebenefitsorcostsisbeingproperlyassignedtotheimpactedparties.

ThistaskrequiresthequantificationoftheactualimpactsofDGthatareseentodayonthedistributionsystem.Manystudieshavebeendoneontheseissuesinthepast.However,thesestudieshavegenerallyreliedonsimulatedscenariosorlimitedactualdatafromisolatedcircuits.TheobjectiveofthistaskwouldbetocollectactualdatafromacrossCaliforniatovalidatewhetherthepurportedbenefitsareactuallybeingachieved.Oncethedataonbenefitsiscollected,itcanbeanalyzedinamannersimilartothecostdata.Trendscouldbeplotted,andkeyvariablesmightbeidentifiedwhichtendtodrivethebenefitsofDGhigherincertainscenarios.

ThemagnitudeofdemandreductionfromDGwouldalsobestudiedfurtheraspartofthistask.Howisdemandaffectedduringminimumloadhours?Whatarethedemandimpactdifferencesbyutility?

< 3 MW

> 3 MW

Urban Feeder

SCE

Rural Feeder

PG&E

SDG&E

0

2

4

6

8

10

12

14

16

18

0% 20% 40% 60% 80% 100% 120% 140%

Rel

ativ

e C

ost

(u

nit

s T

BD

)

Feeder Penetration Level

NoChange

SystemProtectionUpgrades

CapacityAddition Unknown

Hypothetical



Finally,thisstudyshouldestimatehowimpactswillchangeasDGgrows.Arecertainregionsreceivingmorebenefitsthanothers?

4) Solutions

Thissectionshouldcoverthefollowingquestions:

HowcannegativeimpactscausedbyDGbemitigated?

HowcanthebenefitsofDGbeenhanced?

WhatmeasurescanbetakentochangetheshapeofthechartsdevelopedintheImpactsandBenefitstasks,andwhatdothesemeasurescost?

Basedontheanalysisintheprevioussections,discusspotentialtechnicalsolutionsorstrategiesthatcouldbetakentomitigateimpactsandenhancebenefits.Thesemayinclude:

OptimallylocatingsystemsgeographicallytolimitnegativeattributesofDG,andenhancepositiveattributes.

Designinga“DGReady”distributionsystemandquantifyingassociatedcosts

Strategicallylocatingenergystoragethroughoutthegrid

Aligningincentiveswiththeknownbenefitsandimpactsindifferentlocations

SmartInvertersandSmartGrid

Electricvehicles

DistributionsysteminfrastructureequipmentcommonlyusedbyothercountriestosupporthighpenetrationofDG.

Createtoolstoallowplanninganddistributionengineertominedata(includingSmartMeterdata)tofacilitateabetterunderstandingandidentificationofthecostsandbenefitsofDGsystems.

Manyofthesolutionsidentifiedmayrequirerevisionofdesignstandardsusedbyutilities.Ofthesolutionsidentified,estimatethecostsandbenefitsoftoimplementingthesesolutions.

5) ScenarioAnalysis

TounderstandthequantitativeimpactsofvariousDGpenetrationlevels,andsolutions,ascenarioanalysisshallbeperformed.ThiswillentailmodelingpartsofthedistributionsystemandshowingtheeffectsonthecurvesproposedfortheImpactsandBenefitssections.

StudydifferentpenetrationlevelsofDG:0,10,15,50,75,100,150and200percent

StudyhowsitingDGsystemsdifferentlyimpactsthesystemonvariouscategoriesofdistributionfeeders,suchasruralandurban.

ModelandstudytheimpactsandbenefitsofdifferentDGtechnologiesthathaveseensignificantdeploymentonthegridtodatewhichare:



● SolarPV

● Windturbines

● Fuelcells(witheitherrenewableornon‐renewablefuels)

● Gasturbines(witheitherrenewableornon‐renewablefuels)

● Microturbines(witheitherrenewableornon‐renewablefuels)

● Internalcombustionengines(witheitherrenewableornon‐renewablefuels)

ModelandstudytheeffectontheImpactsandBenefitsgraphswhenthesolutionsidentifiedintheabovetaskareimplemented.

ThegoalofthisscenarioanalysiswillbetodescribealikelyrangeofDGpenetrationscenariosondistributionsystemsinCalifornia,andthecostsandbenefitsassociatedwitheach,tohelpinformfutureDGpolicyinthestate.


BLACK & VEATCH | January 31, 2013 Report Presentation, Including Selected 2012 Data Updates D‐1

Appendix D. January 31, 2013 Report Presentation, Including Selected 2012 Data Updates

biennial report on impacts of distributed generation · 12/19/2014 · the previous “impact of...

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