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- What is WDG?
- The trouble with WDG interconnection
- Streamlining WDG interconnection
- Rule 21
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Interconnecting a wholesale distributed generation (wholesale DG, or WDG) project to the grid in California can take years, and it can be an arduous and expensive process. The uncertainty and extra costs involved discourage many projects from getting off the ground or even being considered. Fixing the WDG interconnection process will result in significantly more clean local energy in the state.
WDG generally refers to commercial-scale solar projects that are connected in front of the meter and that sell the power they generate to the grid. WDG also includes common solar installations, as well as solar+storage, small hydro, commercial-scale wind, energy storage, and more.
Growing the WDG market will bring numerous benefits:
- WDG provides clean local energy, which helps utilities meet renewable energy and sustainability goals while containing costs and lowering administrative burdens
- It also keeps energy prices low for consumers; the power generated by WDG serves loads within the local distribution grid, obviating the need for long, expensive transmission lines and saving ratepayers billions
- For communities, the clean local energy from WDG provides a trifecta of economic, environmental, and resilience benefits, as it brings local jobs, investment, and electricity that can avoid or shorten outages
California and many other states already have an effective policy in place for clean local energy at the retail level, behind the customer’s meter: net energy metering (NEM). But NEM typically works best for residential installations — like rooftop solar on single-family homes — or other owner-occupied properties. The policy doesn’t work well for the commercial-scale solar segment, including non-owner-occupied properties, split-metered facilities, and sites with little on-site load.
That’s why we need policies and programs that unleash the WDG market to provide all of its benefits.
The current interconnection process is a significant problem that must be fixed if we are to unleash WDG, the market segment that Germany targeted — propelling the country to become a global clean energy leader.
Interconnecting a WDG project in California is an unpredictable process that can be arduous and expensive, and can extend over years — adding uncertainty and extra costs to project development, and discouraging many projects from getting off the ground or even being considered. Fixing the WDG interconnection process will result in significantly more clean local energy in the state.
Compared to the process for identically sized and similarly sited NEM projects, interconnecting WDG projects costs significantly more, takes longer, and is far less predictable.
A significant roadblock for developers of WDG projects is the lack of predictability. Currently, for these projects it’s not possible to use publicly available information to determine impacts and costs prior to completing an application. The costs incurred prior to being able to submit an application vary widely, but they can typically exceed $50,000, with upgrades averaging $150,000 for a 1 MW project. This presents a major risk for developers.
We have solutions now for streamlining WDG interconnection. Funded by a grant from the California Energy Commission (CEC) and led by the Clean Coalition, the Peninsula Advanced Energy Community (PAEC) Initiative developed recommendations in its report Best Practices: Interconnection for Local, Commercial-Scale, Renewable Energy Projects.
The report’s recommendations include:
- Transparent application and review processes
- Predictable and reasonable timelines
- Enhanced queue management
- Dispute resolution procedures
- Clear cost-certainty measures
The PAEC Initiative also designed a Pilot for Testing Streamlined Interconnection Procedures, which aims to replicate the streamlined NEM interconnection process, timing, and pricing for qualified WDG projects.
The pilot includes:
- Published grid hosting capacity information to show what size of projects can be installed without grid upgrade costs. Supplying grid information supports optimized project proposals and reduces modifications, withdrawals, and applicant friction.
- A standardized interconnection flat fee where upgrades are not required (based on average actual costs incurred by PG&E).
- Timely scheduling and completion of site visits for physical inspection, interconnection, and any necessary adjustments on the utility grid.
In addition to streamlining the interconnection process for WDG projects, the pilot’s goals include:
- Reducing staff time and cost for interconnection review
- Encouraging or incentivizing project applications that deliver benefits such as mitigating local grid needs or constraints
As the state with the largest and much of the earliest growth in distributed resources, California has identified state jurisdictional interconnection issues long before they have cropped up elsewhere. The state’s tariff and rules continue to serve as the foundation and model for other states’ regulations on interconnection.
The Clean Coalition has been a leading intervenor in and contributor to these efforts. This work includes developing new tariffs to accept wholesale projects; publishing interconnection capacity maps, pre-application reports, unit cost guides, group study and guaranteed cost envelope options; and incorporating energy storage systems and advanced inverter standards.
Streamlining the interconnection of advanced energy solutions to the grid (June 5, 2018)
Connecting to the Grid (October 16, 2014)
Making Way for Wholesale Distributed Generation: Not for the Faint of Heart | Microgrid Knowledge (July 27, 2018)
To Unleash Wholesale Distributed Generation, We Must Streamline Interconnection | Greentech Media (July 20, 2018)
California’s Wholesale Distributed Solar Program Is in Trouble. Will Regulators Finally Fix It? | Greentech Media (June 16, 2017)
How California Created a New System for Determining the Costs of Grid Connection | Greentech Media (August 9, 2016)
The Perils of Wholesale Distributed Generation: Can California Live Up to Its Promise? | Greentech Media (March 9, 2016)