FERC made a mistake in Order 745 and should change the pricing rule.
Greening the Local Grid
Smart solutions for distributed renewables.
The goal of implementing a distribution management system (DMS) is to upgrade isolated, hands-on grid management processes into an interconnected and automated platform. This technology is transforming the way utilities operate distribution networks, and setting the industry on a path toward seamless integration of distributed resources—both supply and demand.
Suppose a utility’s distribution management system detects a dangerous voltage fluctuation on a low-level feeder sometime around mid-day and opts to shed load to fix the problem, but then the operator discovers that the customer in question was operating banks of solar PV on warehouse roofs. You thought you were shedding load (and you were), but you also were shedding a fully dispatched generation supply. Now what?
Electric distribution networks, unlike interconnected transmission systems, were inherently designed to be radial systems—sending power out to loads along the feeders. Protection systems at their basic level can and do monitor the amount of power (current) being transmitted. When a sudden, unexpected surge occurs—as with a fault or equipment failure—the protective device operates, successfully clearing the problems and ensuring public and employee safety. While solutions have been applied to single-point generation, the interaction of multiple distributed generation sources makes the problem much more significant in aggregate than for any unit on its own. Solutions need to be developed to support distributed generation resources (DG) operating safely within the distribution power company’s protection and control paradigms. Traditionally, when safety or system stability was a possible issue, transfer trip schemes were ordered, however these add a significant cost and might not be viable for small distributed resources.
This situation introduces a new problem for most electric distribution companies—having to forecast and then dispatch and perhaps curtail distributed generation. In order to maximize complementary distributed renewable resources, new innovative approaches must be developed. The problem would appear tailor-made for new smart grid solutions.
The technical and operational challenges to fully realizing the potential of identified smart grid initiatives, and thereby facilitating significant penetration of renewable generation, are significant. And of equal challenge are the regulatory and policy implications. The market hasn’t yet reached consensus on the optimal implementation scenarios, obtained technical maturity of solutions or derived a foundational financial modeling of smart grid investments.
Moreover, while there appears to be political will and public consensus that a smarter grid is good—if only because nobody wants a stupid grid—the financial implications of this vision haven’t yet been vetted:
• Who will pay for all of the smart grid investment?
• How to ensure that distributed generation resources will provide power factor and voltage support.
• How to fairly treat all renewable generation that’s connect to the distribution grid—the first one as well as the last unit.
• Will energy storage solutions serve as ancillary services, financed by special feed-in tariffs, funded by beneficiary renewable and conventional generation producers, or other mechanisms?
• Technologies such as PV, wave power and others continue to require a premium over traditional fossil