Energy Bar Association
2015 Mid-Year
Meeting &
Conference
Are Distributed Energy
Resources (DERS) at the
Tipping Point?
November 18 & 19, 2015
Renaissance Hotel
999 Ninth Street NW
Washington, DC
Are Distributed Energy
Resources at the
Tipping Point?
Donna M. Attanasio
Energy Bar Association Mid-Year Meeting
November 19,2015
Resilient
Sustainable
Customer-Choice
Align Utility
Incentives
Grid
Modernization
Planning
Regulatory
Process
Distribution Edge
Rate Design
Integrated Distribution Planning:
A holistic approach to meeting grid needs and expanding customer
choice by unlocking the benefits of distributed energy resources
John Stanton
EVP, Policy and Markets
November 2015
Power forever.
Executive Summary
 Distributed energy resources (DER) unlock the benefits of a distributed grid and
expand customer choice, yet existing utility processes limit the utilization of
DERs
‒ A distributed grid – built upon the wave of distributed energy resources that are proliferating
across the country – is cleaner, more reliable, and more affordable than a centralized grid
‒ Engaging customers to provide grid services unlocks a tremendous asset in meeting grid needs
‒ However, current utility planning processes do not support the evolution to a distributed grid
 A proposed solution: Integrated Distribution Planning
‒ Integrated Distribution Planning is a holistic approach to meeting grid needs and expanding
customer choice by unlocking the benefits of distributed energy resources
‒ Adopting an Integrated Distribution Planning framework modernizes utility interconnection,
planning, sourcing and data sharing processes
‒ The integration of distribution planning efforts into a holistic process will expedite and reduce
costs of DER interconnections, fully integrate DERs into grid planning and operations, and
reduce overall system cost by unlocking DERs to provide grid benefits
 Integrated Distribution Planning evolves traditional utility planning by
incorporating modern analyses, techniques, mechanisms, and policies to
support the utilization of distributed energy resources
‒ Hosting Capacity analyses can be incorporated into the interconnection of distributed energy
resources to streamline and eventually automate interconnection
‒ Distribution Loading Order policies can be utilized to encourage the sourcing of cost effective
distributed energy resources before conventional distribution equipment
‒ Data transparency and sharing can enable industry innovation at an accelerated pace
SolarCity Confidential
Slide 5
5
Designing the 21st Century Grid
SolarCity Confidential
Slide 6
6
Challenge: Existing utility interconnection, planning, sourcing,
and data sharing processes do not leverage DERs to benefit the
grid and enable customer choice
Solution: Modernize distribution processes by adopting a
holistic Integrated Distribution Planning framework
Traditional Planning
Planning
Integrated Distribution Planning
Interconnection
Image Sources: CYME, Kevala, PG&E
SolarCity Confidential
Slide 7
7
Agenda
Integrated Distribution Planning
Interconnection
Planning
Data
Sourcing
SolarCity Confidential
Slide 8
8
Challenge: Interconnection processes can be avoidably slow, include
unwarranted costs, and unnecessarily limit DER interconnections
Solution: Streamline DER interconnection process, eliminate
unwarranted costs, and expand allowable interconnection approvals
Streamline Process
•
•
While many states establish
timeline requirements for
utilities to complete
interconnection, timelines are
often not met.
Best-in-class utilities
standardize their
interconnection process and
have drastically reduced their
processing timelines.
Eliminate Costs
•
•
Cost certainty is a critical
component of successful
interconnection. Upgrade costs
to DER owners vary
significantly by project.
Upgrade requirements are
frequently based on outdated
technical information, resulting
in undue DER integration costs
Expand Approvals
•
•
Outdated interconnection
technical standards
unnecessarily limit the amount
of DERs that are allowed to
interconnect
Utilize automated hosting
capacity analyses to increase
allowable interconnections.
SolarCity Confidential
Slide 9
9
Delayed interconnection approval timelines
unnecessarily extend project deployment
Interconnection Timelines for Distributed PV (NREL)
Application: 44% of residential and 50% of
small commercial projects took over 20
business days for approval (> 1 month)
•
Median days for delayed projects:
- 38 business days (< 10kW)
- 39 business days (10 to 50kW)
Permission to Operate: 17% of residential
and 25% of small commercial projects took
over 20 business for approval (> 1 month)
•
Median days for delayed projects:
- 28 business days (< 10kW)
- 29 business days (10 to 50kW)
Project approvals can exceed 200 business days2
1Source: ‘A State-Level Comparison of Processes and Timelines for Distributed Photovoltaic Interconnection in the United
States,” NREL, January 2015; 2Source: SolarCity interconnection data
SolarCity Confidential
Slide 10
10
Interconnection timelines are increasing across
many utilities
Average Utility Permission to Operate (PTO) Timeline
# of Days to PTO
Average post-construction PTO timeline
2013
2014
Without intervention, will timelines increase further?
Source: “Comparing Utility Interconnection Timelines and Preparing for Increased Distributed Generation’”, EQ Research, 2015SolarCity Confidential
Slide 11
11
Streamline Process: Best practices and recommendations
Streamline process in following areas:
Documentation
Visibility
Simplicity
Cost Certainty /
Minimization
Cost Allocation
Standards
Penalties
Review /
Reform
Equipment
SolarCity Confidential
Slide 12
12
Eliminate Costs: Many mitigation requirements are overly
conservative and can be avoided with cheaper alternatives
• Interconnection process best practices
identified in the following categories:
•
•
•
•
•
•
•
•
•
Documentation
Visibility
Simplicity
Cost Certainty / Minimization
Cost Allocation
Standards
Penalties
Review / Reform
Equipment
• Alternatives to common utility mitigations
identified in the following categories:
•
•
•
•
•
•
•
•
•
•
Protection Equipment - SCCR
Reclose Blocking
Direct Transfer Trip (DTT)
Reconductor
Transformer replacement
Grounding transformer
SCADA Recloser
Monitoring equipment
Voltage Equipment – Variability
Voltage Equipment – Reverse Flow
SolarCity Confidential
Slide 13
13
Universal interconnection screens are overly
conservative for most circuits
% of Representative
Feeders
Maximum PV Penetration Before Steady-State
Over-Voltage Issues May Occur
56%
31%
0%
6%
0%
0%
6%
For more than half of
typical distribution
feeders, PV will not
cause voltage
violations up to 105%
of peak load
0%
0-15% 15-30% 30-45% 45-60% 60-75% 75-90% 90-105% > 105%
Interconnection screens set at 30% of peak load
unnecessarily limit interconnections on most circuits
Source: “Maximum Photovoltaic Penetration Levels on Typical Distribution Feeders”, NREL, July 2012.
SolarCity Confidential
Slide 14
14
Expand Approvals: Phase out universal screens in
favor of hosting capacity analyses
Screen-Based
Hosting Capacity
At low PV penetration levels,
screening methods can enable
timely decisions
At high PV penetration levels,
circuits need to be individually
assessed for DER hosting capacity
Image Sources: EPRI
SolarCity Confidential
Slide 15
15
FastTrack
Incorporate automated Hosting Capacity analyses
into interconnection process
Interconnection
Application
Initial Technical Review
with Penetration Screen
Pass
Interconnection
Approval
Fail Any Screen
Change operating
characteristics and/or
system configuration
Supplemental
Review with
Hosting Capacity
Fail
Examine alternative DER
configurations to enable
allowable approval
Pass
Fail all
configurations
Detailed
Impact Study
Incorporate Hosting
Capacity into automated
Supplemental Reviews
SolarCity Confidential
Slide 16
16
Agenda
Integrated Distribution Planning
Inter-
Planning
connection
Data
Sourcing
SolarCity Confidential
Slide 17
17
Challenge: Utility planning processes do not leverage DERs to
provide grid services, lower system costs, and increase resiliency
Solution: Modernize distribution planning to leverage DERs
Forecast Growth
& Maintenance
2
3
Identify
Needs
Forecast load and DER
growth and required
equipment maintenance
Compare growth to
available hosting and
circuit capacities
8
7
Evaluate
Options
Evaluate solutions to meet
identified needs, including
the use of DER portfolios
Hosting Capacity
DER Forecast
6
MW
1
5
4
3
Zero Available
Hosting Capacity
2
1
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year
Image Source: Pacific Gas & Electric
Incorporate DER growth in
addition to load growth forecasts
Image Source: EPRI
Include DERs as an option to
proactively meet grid needs
SolarCity Confidential
Slide 18
18
Agenda
Integrated Distribution Planning
Interconnection
Planning
Data
Sourcing
SolarCity Confidential
Slide 19
19
Challenge: Utility distribution sourcing does not leverage DERs to
provide grid services, lower system costs, and increase grid resiliency
Solution: Modernize distribution sourcing to evaluate, select, and
deploy DERs to meet grid needs
1
Select Least
Cost / Best Fit
Identify least cost / best fit
portfolio of DER and
traditional assets
2
Deploy
Resources
Conduct pricing, program
and procurement efforts to
obtain needed assets
3
Monitor
Performance
Monitor, measure and verify
performance, adjusting
portfolio as needed
Select least cost / best fit portfolio, including DERs
rather than solely traditional infrastructure
SolarCity Confidential
Slide 20
20
Distribution Loading Order:
A policy to encourage the utilization of DER portfolios to meet grid needs
Procurement Solutions
Proposed Distribution Loading Order
1. Distributed Energy Resources
(DERs)
2. Conventional Distribution
Infrastructure
Selection of Resource Examples
Energy efficiency, controllable loads/demand response, renewable
generation, advanced inverters, energy storage, electric vehicles
Transformers, reconductoring, capacitors, voltage regulators,
sectionalizers
Procurement Mechanisms
Rank
Order
Procurement
Mechanism
1
Price Signals
(DERs)
2
Firm Contracts
(DERs)
3
Traditional Utility
Infrastructure
Description
Selection of Practical Examples
DER portfolios that voluntarily respond to
price signals sent from the utility that incent
the desired behavior to meet grid needs.
DER portfolios that are contractually
obligated to deliver grid services based on
contracted prices.
•
•
•
•
•
Voluntary Critical Peak Power / TOU Pricing
Voluntary Distributed Marginal Pricing (DMP)
Voluntary Voltage Support Pricing
Week-Ahead Reactive Power Payments
1-10 year ahead availability contracts for
peak substation real power capacity
Traditional utility infrastructure self-supplied
through General Rate Case capital budgets.
•
•
Utility investment in Substation transformer
Utility investment in feeder reconducturing
SolarCity Confidential
Slide 21
21
Select Least Cost / Best Fit: Utilize Distribution Loading
Order Mechanisms to source solution to grid need
Utilize Distribution Loading
Order to ensure leastcost/best-fit sourcing
2
22
13
3
3
9
1
32
Cushion
8
1
8
10
System Need
(i.e. MW,
MVAR, MWh)
14
Price Signals
Firm Contracts
Traditional
Infrastructure
Total Identified
Need
Expected Delivery
Non-Delivered
Capacity
Distribution Loading Order: Sourcing Mechanisms
Source: SolarCity illustrative Loading Order analysis
SolarCity Confidential
Slide 22
22
Deploy Solutions: Examine Infrastructure-as-a-Service
investments in lieu of traditional infrastructure
Traditional Equipment
Infrastructure-as-a-Service
Identify System Need
(e.g. capacity, power quality)
Identify System Need
(e.g. capacity, power quality)
Purchase Traditional
Equipment Solution
(e.g. transformer, capacitor bank)
Place Notional Value of
Equipment Cost in Ratebase
Meet System
Needs
Earn
Authorized
Return
Procure
Third-Party Solution
(e.g. feeder capacity, reactive power)
Place Notional Value of
Contract in Ratebase
SolarCity Confidential
Slide 23
23
Monitor Performance: Measure and verify sourced portfolio
performance
SolarCity Confidential
Slide 24
24
Agenda
Integrated Distribution Planning
Interconnection
Planning
Data
Sourcing
SolarCity Confidential
Slide 25
25
Challenge: Utility data critical for driving innovation is not
accessible by broader industry
Solution: Utilities must commit to data transparency and access
to enable industry innovation
Data Transparency
Data Access
SolarCity Confidential
Slide 26
26
Rationale for Utility Data Sharing
•
•
•
•
Data sharing informs customer choice and economic development
•
Should customers pursue projects on a specific feeder?
•
Do DER providers have enough business runway to retain local employees?
•
Should DER providers open a warehouse/office in a specific geographic area?
Data sharing supports industry innovation
•
Data sharing unlocks third party engagement, dramatically increasing pace of innovation
•
Third parties have the domain knowledge and expertise to improve distribution planning, particularly
in new skillsets that are not traditional strengths of utilities (i.e. data analytics, software/product
development)
Data sharing enables credible auditing of utility investment plans
•
DER providers can suggest alternative means to meting distribution grid needs
•
Solely publishing outcomes of analyses (i.e. hosting capacity analyses) does not enable sufficient
auditing of utility methodology/decision making
•
Data access is the foundation of ratepayer advocacy and should extend into distribution planning
Data sharing supports public safety
•
Transparent data increases visibility into potential public safety concerns
SolarCity Confidential
Slide 27
27
Data Transparency: Data to be Shared
1
2
Locational
Value
3
Hosting
Capacity
4
Planned
Investments
5
Operations
Market
Support
SolarCity Confidential
Slide 28
28
Data Access: Mechanisms to enable data access
Downloadable,
anonymous distribution
data available through
online portal
Image Source: Pacific Gas & Electric
Image Source: Southern California Edison
SolarCity Confidential
Slide 29
29
Thank you
AZ ROC 243771/ROC 245450, CA CSLB 888104, CO EC8041, CT HIC 0632778/ELC 0125305, DE 2011120386/ T1-6032, DC 410514000080/ECC902585, FL EC13006226, HI CT-29770, MA HIC 168572/EL-1136MR, MD HIC
128948/11805, NC 30801-U, NH 0347C/12523M, NV NV20121135172/C2-0078648/B2-0079719, NJ NJHIC#13VH06160600/34EI01732700, NM EE98-379590, OR CB180498/C562, PA HICPA077343, RI AC004714/Reg 38313, TX
TECL27006, UT 8726950-5501, VA ELE2705153278, VT EM-05829, WA SOLARC*919O1/SOLARC*905P7. Nassau H2409710000, Greene A-486, Suffolk 52057-H, Putnam PC6041, Rockland H-11864-40-00-00, Westchester
WC-26088-H13, N.Y.C #2001384-DCA. SCENYC: N.Y.C. Licensed Electrician, #12610, #004485, 155 Water St, 6th Fl., Unit 10, Brooklyn, NY 11201, #2013966-DCA. All loans provided by SolarCity Finance
SolarCity Confidential
Slide 30
Company, LLC. CA Finance Lenders License 6054796. SolarCity Finance Company, LLC is licensed by the Delaware State Bank Commissioner to engage in business in Delaware under license number
019422, MD Consumer Loan License 2241, TX Registered Creditor 1400050963-202404.
30
Distributed Energy Resources
Location Matters
Steve Fine, ICF International
Energy Bar Association Mid-Year Meeting
November 19, 2015
31
Overview
 Tremendous growth in Distributed Energy Resources (DER)
– Solar
– Storage
– EE/DR
– CHP
 DER are changing the way system and resource planning are done
– CA/HI/NY are in the lead
– Other states moving at different speeds
 Determining the locational value of solar and other DER technologies on the
grid is the first step in understanding and valuing their contribution to the grid
 Will lead to a new distribution planning process for utilities, that is already
underway in CA, NY, HI
32
Value of DER Evolution
Value of DER is evolving in various states from original NEM rate designs to Value of
Solar and now to Distribution Resource Planning based value
Net Metering
Value of Solar
Distribution
Resource
Planning
Focus is more clearly identifying and assigning net value
(positive or negative) of DER into ratemaking and rate designs
33
33
The New Distribution Planning Framework
Scenario
based
distribution
planning
• Uncertainty of
the types,
amount and
pace of DER
make singular
forecasts
ineffective
Hosting
capacity
Locational
value of DER
• Must determine
amount of DER
a feeder can
accommodate
within three
principal
constraints:
thermal,
voltage/power
quality and relay
protection
limits.
• Sourcing
locational
infrastructure or
operational
requirements
from DER may
result in positive
or negative
costs and
benefits
Probabilisticbased
engineering
analysis
• Issues from
increased DER
penetration –
variability of
loading, voltage
—require
probabilistic
analysis.
Integrated
T&D planning
• At high DER, net
load
characteristics
have impacts on
transmission
system / bulk
power system
operation,
requiring
transmissiondistribution
interaction
analysis
34
How will DERs Interact with the Wholesale Market?
 Aggregators would play an important role
in enabling DER participation in wholesale
markets
 Operation and scheduling of DERs would
likely be handled through the
DSOs/aggregators
– DSOs would enable DERs to participate
in the wholesale markets effectively
– DSOs would ensure ISO participation
and interconnection standards on
behalf of DERs
– Transparent and effective pricing on
the distributed level would help
improve overall system benefits
– DSOs would help in coordinating
reliability services effectively
Potential DSO Model
TSO/ISO
Source: Paul DeMartini and Lorenzo Kristov
35
Locational Value of DER –
Integral to Future Utility Strategies
 Understanding the locational value of DER is fundamental to understanding the
value of DER on the distribution grid
 Development of Distribution Planning Process Framework
– end-to-end planning process framework to identify projected distribution
grid deficiencies including DER portfolio implementation and performance
monitoring
 Integral part of a Utility of the Future Strategy
– visibility gained into locational value of DER, as well as understanding
potential utility business and regulatory models are key to developing a
future state business model
36
Contact Information
Steve Fine
Vice President
[email protected]
703-934-3302
ICF Whitepapers
Locational Value of DER – http://www.icfi.com/insights/white-papers/2015/value-in-distributed-energy
On the Bleeding Edge CA/HI/NY – http://www.icfi.com/insights/white-papers/2015/california-hawaii-new-york-power-market-revolution
Value of Solar - http://www.icfi.com/insights/white-papers/2014/true-value-of-solar
37