More and more renewable generation is coming online, and that growing supply needs to interconnect with the grid to meet increasing consumer demand. But the interconnection queue can be lengthy, and utilities and developers alike need to be aware of a lot of factors, as well as regional variations in terms of the process.
How does one navigate that process appropriately and efficiently to attain project objectives? Time is money, and any unnecessary delays to interconnection can cost months of service, potentially representing the difference between a positive or negative net present value (NPV) for a project as a portfolio asset. That difference could determine whether the project ultimately goes forward.
Decades of working with electric utilities of all sizes — as well as the independent system operators (ISOs) and regional transmission organizations (RTOs) — have provided a broad experience base from which to draw some essential lessons. Here are four tips to navigating the process and getting renewable power to your customers.
1. Achieve Consistency Across Studies
With increasing numbers of distributed generation projects being proposed and entering development, organizations — from municipalities and quasi-governmental entities to investor-owned utilities — are being saturated with study requests. A utility that performed 20 studies one year might be asked to perform 100 the next while needing to meet the same regulatory time frames. It might be necessary to partner with experienced consultants to hit those deadlines, or at least to shave the peak. That can enable internal utility resources to move from executors to approvers.
Whether assisted, partnered or handled in-house, study consistency is essential to obtaining good results while minimizing demands on valuable time. Evaluators must take all technologies into account and approach each without biases, reflecting the reality that varying technologies come with different challenges and serve different objectives.
2. Adopt Best Practices
Renewables-specific regulations tend to crop in piecemeal fashion, starting in one region before being adopted in others, like a wave across the industry. Consultants with a deep bench, like 1898 & Co., and that serve clients from coast to coast can leverage first mover experiences in one region to help smooth out the regulatory wrinkles in another. A technology-specific requirement in one region might be new to a given utility, but the consultancy might have already performed two, three or more studies in regions that already had that regulation.
Drawing on that previous experience can bridge the knowledge gap for the utility, enabling the application of standards already established elsewhere to avoid reinventing the wheel. Trends tend to move like waves, whether it be hosting capacity requirements in one region or offshore wind integration in another. Leveling that industry knowledge base nationally is essential to promoting fast adoption of best practices.
3. Accelerate Through Modularization
Every project has its life cycle, moving from ideation and studies to design, energization and becoming commercially operational. When utilities work with experienced, integrated partners, they gain both physical and procedural efficiencies in the project timeline. Speed to market is an important driver.
Modularization solutions are an increasingly popular way to speed up project execution, and they can be a sensible choice in many contexts. Utilities and their partners also must be aware of how the modular solutions relate to project timing and regulatory filings. Modular packages and approaches that cost less upfront or work well in one region might not be worthwhile in another if they cannot gain acceptance from governing regulatory bodies.
Standard designs can be a starting point, but even they can require tailoring to individualized circumstances. Consultants with economic analysis capabilities and broad national experience are well positioned to identify how to thread that needle and support interconnection speed-to-market solutions through modularization.
4. Adapt for Differing Penetration
Not all power is equal. For example, some types of inverter technology can add nonstandard power quality into a system. Why is that potentially a problem? Think of the ideal electrical grid as a pool of clean water. When nonstandard power or harmonics are injected into the system, maybe it adds a little salt. If that is just a single, small instance — a gallon in a 200-gallon pool — it’s not too big of a deal. But what if industry trends lead to 100 new resources adding 100 gallons into that 200-gallon pool? It makes a big difference, and that can lead to technical problems in the system that wouldn’t crop up in the smaller example.
Size, scale and penetration matter tremendously, as does knowledge of the technical nuances of varying technologies. Differing penetration scenarios call for different studies. Utilities may not want or need an advanced set of studies in a small-penetration scenario, but they also would not want to be taken by surprise if the combined effects due to higher penetration trends in certain areas of their system lead to unforeseen system issues.
It is essential to understand the broader context of a project and see the big picture. In the long run, it is far more economical to build the right system upgrade than to underestimate, make multiple adjustments, and wind up with a large system rework. Spending a little more upfront or taking a slightly different approach from the beginning could reap huge futureproofing benefits.
Cues to Streamline the Queue
Interconnections are a vital link between renewable generation and a healthy electrical grid. Utilities are looking for partners who embrace these four experience-based lessons to deliver proven, integrated solutions that save time and money in the long run.
Approval for DER interconnection projects historically has been slow, with utilities lacking ways to identify feasibility and costs. See how hosting capacity analyses can solve for these challenges.