Utilities Propose Stricter Standards for Distributed Generation Facilities

posted in: January 2011 | 0

It may get even harder for renewable energy projects to hook up to electricity grids on O`ahu, Maui, and Hawai`i if a proposal by the utilities on those islands wins state approval.

The utilities say they are just trying to protect those grids and their workers from the problems that can arise when the amount of electricity being generated is too great compared to the demand.

But opponents aren’t buying it.

On January 7 of last year, Hawaiian Electric Company, Maui Electric Company, and Hawai`i Electric and Light Company asked the Public Utilities Commission to amend the interconnection standards for distributed generating facilities.

Perhaps most significantly, the companies sought to add another threshold that would trigger an interconnection requirement study (IRS), a potentially costly and cumbersome undertaking that, according to industry experts, has scared off developers in the past.

Within two weeks of the companies’ filing, the PUC received protests from the state Department of Business, Economic Development, and Tourism, the Solar Alliance, the Hawai`i Solar Energy Association, Blue Planet Foundation, and Zero Emissions Leasing, LLC. Several other renewable energy groups and companies joined the docket (2010-0015) in February.

Under current interconnection standards, which the PUC amended in May, an IRS is required if the aggregate generating capacity of a particular part of the grid exceeds 15 percent of the annual peak load. The threshold used to be a mere 10 percent before the PUC amended it last summer, after much negotiation among the parties.

In its January proposal, the HECO companies proposed that an IRS also be required whenever generating capacity exceeds 33 percent of a circuit’s minimum load when the proposed generation is available.

As distributed generating facilities are added to a circuit, the companies argued, the potential for problems with voltage regulation, the protection system, and islanding — a dangerous situation where a facility continues to generate electricity even when the grid is down — increases.

The proposed modifications are consistent with professional standards, the companies say. They based the proposed 33 percent threshold on “the physics of response of power generation equipment under the range of conditions expected to be encountered when connected to the power system.” 

According to DBEDT’s filings, however, notwithstanding the companies’ arguments, the additional threshold is unnecessary given existing design and operating requirements for the distributed generation facilities. These are specifically intended to address things like islanding and voltage disturbances, DBEDT states.

The agency adds that the companies have provided no evidence that an IRS triggered by the 33 percent threshold would yield solutions that aren’t already required.

What’s more, the Blue Planet Foundation argues, the 33 percent trigger reverses gains made this past summer, when the existing threshold was increased from 10 to 15 percent. The foundation points out that HECO had also committed to the 15 percent trigger when it signed an energy agreement with the state in October 2008 to try to achieve 70 percent clean energy use by 2030.

Using the companies’ own load data, the foundation determined that a 33 percent threshold would effectively reduce the 15 percent threshold to an average of 12.9 percent, 13.8 percent, and 12.2 percent for HECO, HELCO, and MECO, respectively.

And for nearly a third of the circuits on Maui, 16 percent of those on Hawai`i, and 9 percent of those on O`ahu, the IRS threshold would be reduced to below 10 percent, Blue Planet found. 

To the solar industry, these thresholds have become a de facto cap on renewable energy development.

“The reason is that the risk and burdens associated with the HECO companies’ IRS process, including the lengthy time frame, which undermines project financing, and uncertain costs of the study and potential required upgrades, in most cases compel renewable energy developers either to downsize the proposed project so as to fall within the penetration limit, or to abandon the project altogether. Already, the existing penetration limit has resulted in millions of dollars of commercial and residential projects not being built, with tens of millions more to follow. The bottom-line is that the feeder penetration limit or threshold is the most potent barrier to development of distributed renewable energy projects in Hawai`i,” states a joint filing by the Solar Alliance, the Hawai`i Solar Energy Association, and the Hawai`i PV Coalition.

Data offered by the Blue Planet Foundation support their argument that developers downscale their projects to avoid the need for an IRS. Of the more than 2,200 distributed renewable energy facilities that are connected to the companies’ grids, interconnection studies have been done for only eight.

Even with only the 15 percent trigger, an increasing number of renewable energy facilities will be forced to conduct an IRS, the Blue Planet Foundation adds.

“Streamlining the process by consolidating IRSs and related measures — rather than adding new triggers — will be necessary to achieve Hawai`i’s energy objectives,” it states.

With interconnection standards in flux, renewable energy producers have held off from participating in the state’s new feed-in tariff program, which was intended to spur development, says Mark Duda, president of the Hawai`i Solar Energy Alliance.

“There’s no security for the developers. The ability of the utility to pick and choose [which projects can connect] is making people skittish… People don’t know what they’re signing up to,” he says.

What’s more, no one involved in the PUC’s various dockets knows when the much-awaited reliability standards working group will convene or even how its membership will be decided. The group, proposed by the HECO companies and approved by the PUC, is supposed to help determine reliability standards. Some opponents to the proposed changes have suggested that the issue be left for the group to decide.

Teresa Dawson

Volume 21, Number 7 — January 2011

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