DER - Storage

Group studies could ease interconnection pain for DERs, report finds

Group studies could ease interconnection pain for DERs, report finds

The Interstate Renewable Energy Council released a report that provides guidance on the use of “group studies,” an emerging practice to streamline the interconnection of distributed energy resources (DERs)—such as solar PV, community solar, and energy storage—to the electric distribution grid. 

The report, Thinking Outside the Lines: Group Studies in the Distribution Interconnection Process, aims to help regulators, utilities, and clean energy stakeholders evaluate whether group studies may be an effective avenue for addressing interconnection issues in their jurisdictions. As an increasing number of DER projects seek to interconnect to the grid, the interconnection process has slowed in many states. It is not uncommon for DER projects to spend years waiting in a queue to be studied.

“Interest in group studies at the distribution level has been growing, and this paper investigates how these studies are faring on the ground,” said Laura Beaton of Shute, Mihaly and Weinberger LLP, counsel for IREC and the lead author of the paper. “One of our major takeaways from our research is that group studies are not a silver bullet for all interconnection challenges, but they can frequently be helpful in managing queues and fairly allocating costs.” 

IREC is a partner at GridTECH Connect Forum, taking place October 23-25, 2023 in Newport, Rhode Island.

Interconnection challenges

Earlier this year, Federal Energy Regulatory Commission (FERC) issued a final ruling in its quest to streamline generator interconnection and alleviate clogged queues across the U.S.

At the end of 2022, more than 2,000 GW of generation and storage were waiting in transmission interconnection queues, according to FERC. The final rule requires all public utilities to adopt revised pro forma generator interconnection procedures and agreements to ensure that interconnection customers can interconnect to the transmission system in a reliable, efficient, transparent, and timely manner, and to prevent undue discrimination.

FERC will require a “first-ready, first-served” cluster study process in which transmission providers conduct large interconnection studies encompassing numerous proposed generating facilities, rather than separate studies for each individual generating facility. To ensure that ready projects can proceed through the queue in a timely manner, interconnection customers will be subject to specific requirements, including financial deposits and site control conditions, to enter and remain in the interconnection queue.

The final rule also imposes firm deadlines and establishes penalties if transmission providers fail to complete interconnection studies on time, but transmission providers may appeal their penalties at FERC.

The final rule requires transmission providers to allow more than one generating facility to co-locate on a shared site behind a single point of interconnection and share a single interconnection request. This reform creates a more efficient standardized procedure for these types of generating facility configurations, FERC said.

IREC believes similar reforms extended to the distribution electric grid could ease interconnection pain for DERs.

Thinking outside the lines

The standard practice over the last 20 years has been to study DER projects one at a time, in the order in which they requested to interconnect, to determine if each can safely interconnect to the distribution system and if any grid upgrades will be needed. This process of studying projects one by one can contribute to projects piling up in the queue as they await their turn to be studied.

In contrast, a “group study” evaluates in a single study whether a group of multiple electrically related DER projects can safely interconnect and identifies any grid upgrades that are needed to accommodate the group. Unlike individual studies, projects in the same group typically share the costs of the study and any common distribution or network upgrades. While common at the transmission level, group studies have only recently been widely considered at the distribution level.

The report evaluates different group study approaches currently in use and how well they function. It examines five case studies from jurisdictions that have adopted group study processes (California, Massachusetts, Minnesota, Oregon, and North Carolina). The report draws upon IREC’s participation in multiple public utility regulatory proceedings on the formation of group study processes, as well as substantial original research, including interviews with interconnection customers, utilities, and regulatory staff.

IREC found that group studies have the potential to alleviate queue challenges in some—but not all—circumstances. Additionally, designing a group study process is complex and context-specific; states pursuing this approach must carefully balance trade-offs to ensure system safety and reliability, enable functioning DER markets, and resolve the often competing desires of interconnection customers and utilities. IREC offers recommendations for the effective design of group study processes and guidance on when they may be effective.

Finally, IREC’s findings underscore that group studies will not solve all interconnection-related challenges. States that are interested in adopting a group study process should also consider additional measures to improve DER interconnection, including planning and building proactive upgrades to the distribution system and considering ways to better align procurement programs with the interconnection process.

“The primary goal of this paper is to provide guidance and identify pitfalls for states that are exploring group studies,” said Radina Valova, Vice President, Regulatory Program, for IREC. “In addition, we believe that regulators, utilities, and customers who are interested in group studies should also consider a suite of complementary reforms to speed up the interconnection of DER projects.”

Thinking Outside the Lines: Group Studies in the Distribution Interconnection Process can be downloaded free of charge at https://irecusa.org/resources/thinking-outside-the-lines/.