Distributed Renewables Can Defer Infrastructure Investments

Date: 22 Apr 2009 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

This recent article by the Manager of EPRI published on EnergyCentral.com discusses how conventional photovoltaic (PV) applications can act as distributed resources when the sun is shining — rather than solely as a reduction in load. They also can help diversify supply portfolios and meet other goals. The most basic scenario is for utilities to aggregate grid-connected PV installations owned by others and to treat them as demand-side resources. Generally, distributed PV can alleviate loading and provide voltage support, allowing deferred investment in new or upgraded distribution infrastructure and additional supply. Specifically, distributed PV offers quantifiable grid support value only where interconnected to heavily loaded feeders and when output is coincident or nearly coincident with peak demand. Though not dispatchable in the traditional sense, consumer-side PV systems can offer very high value on sunny days when air conditioning loads rise at the same time with solar generation.

EPRI’s Tom Key concludes his piece with: 

Applying conventional distributed PV as a grid reinforcement tool merits a fresh look, as PV can be sited to provide real and reactive power consistent with location-specific needs. Advanced PV inverters promise additional grid support opportunities — and the potential for premium power applications — via reactive power control, voltage control, power quality management, frequency regulation, and UPS functionalities. As components in smart grid infrastructure, multifunctional interface devices incorporating inverter, metering, communications, and control capabilities may enable higher penetration of distributed PV along with improved energy management and more efficient and economical grid operations.

Even with continued technological progress, incentives, rebates, and other support mechanisms are expected to continue and will be critical to widespread PV deployment over the next decade. Current 14 states have solar set aside in their RPS. In several states, recent policies and regulatory proceedings are compensating utilities for offering novel incentives and making other investments that encourage PV application, increase the likelihood that RPS targets will be met, and support other policy objectives. These developments highlight the need for utilities to reassess (see EPRI project with SEPA) traditional business models and to examine new practices and application paradigms involving distributed PV. In lieu of the traditional flat incentive approach, targeted incentives might be employed to encourage PV installations on feeders from heavily loaded substations nearing transformer upgrade. Rate structures that reward consumers for PV generation during peak periods could serve the same purpose.

Similarly, economic incentives might be offered to encourage deployment of advanced inverters that improve grid reliability. Partnerships between consumers, IPPs, and utilities — where utilities provide low-cost financing or long-term PPAs, where the utility owns the inverter, etc. — might represent options for facilitating PV applications with quantifiable support benefits and/or premium power potential. Going further, fully utility-owned PV systems with battery backup or other features might offer potential as assets for delivering premium power and increased reliability. All of these approaches would engage utilities in applications serving technical and business aims consistent with the societal objective of accelerating PV deployment, thereby increasing the likelihood of rate-based cost recovery.


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John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.