To achieve more widespread installation of distributed energy resources (DERs) such as energy efficiency, controllable loads/demand response, renewable generation, energy storage or electric vehicles, clearly requires a new approach from utilities and regulators, given the threat to the traditional utility model.
And a clearly frustrated SolarCity, the American solar provider which claims a new customer every 3 minutes, blaming the industry for a systemic failure to integrate DERs into distribution planning efforts which is hampering current efforts to utilize DERs to support the broader electric system, has come up with a potential solution.
Distribution loading order
SolarCity proposes what it calls a holistic approach to meeting distribution needs and expanding customer choice through modernizing and expediting the utility interconnection, planning and procurement chain and the data sharing processes.
At the heart of the proposal is the ‘distribution loading order’, which seeks to prioritize the utilization of individual DERs or portfolios of DERs over traditional utility distribution infrastructure such as transformers, reconductoring, capacitors, voltage regulators or sectionalizers. The aim of this order, which is based on the concept from California and other states’ regulated utility energy procurement to prioritize procurement of renewable energy ahead of fossil fuel-based sources, is to ensure that the full range of solutions available are considered in order to reduce the risk of redundant investments that increase system costs for ratepayers, according to SolarCity.
Distribution procurement priorities
SolarCity goes a step further to prioritize distribution procurement mechanisms:
1. Price signals, e.g. voluntary critical peak power/TOU pricing, voluntary distributed marginal pricing (DMP) or voluntary voltage support pricing
2. Firm contracts, e.g. week-ahead reactive power payments or 1-10 year ahead availability contracts for peak substation real power capacity
3. Traditional utility infrastructure, e.g. utility investment in substation transformer or feeder reconductoring.
As an example, SolarCity provides a conceptual illustration of how availability methodologies could be used to probabilistically discount the different types of distribution products. In this example, the utility has identified a total grid need of 32MW of capacity. To meet this need, the utility first procures capacity through price signals where it obtains 22MW of nameplate capacity, but availability of only 14MW. The utility continues to utilize the remaining procurement mechanisms until its need is met on a “least cost, best fit” basis.
Integrated distribution planning
An integrated approach to distribution planning, in which DER growth is incorporated in addition to load growth forecasts and DERs are included an option to meet grid needs, should be de rigueur for the 21st century utility.
For customers, reduced review and interconnection times – with SolarCity proposals including fast-tracking of most applications at low DER penetration levels and the incorporation of hosting capacity analyses at high DER penetration levels – will be welcomed and will contribute to improved customer engagement.
With a ‘distribution load order’ or some other mechanism, it will be ensured that the potential for DERs to meet grid needs is not overlooked.