distributed generation: addressing challenges

This post is part one of a special two-part series by SF2011 Fellow Whitney Ramos Whitney served her Fellowship in the San Francisco Public Utilities Commission.

by Whitney Ramos, SF2011

I’m a big fan of distributed generation (DG), specifically when it’s renewable. DG (also called localized generation) refers to generation units that are interconnected to the distribution grid and located close to the where the electricity is intended to be used. For this discussion to be clear, it’s important to understand how the electrical grid generally works. Traditionally, there are three pieces to the electricity puzzle: generation, transmission, and distribution. Electricity is generated at a plant somewhere; a combined cycle natural gas plant in San Jose or a solar plant in the middle of the Mojave Desert. The electricity flows from the generation unit to the region’s transmission system. After being transmitted to a city or town, the electricity reaches a distribution grid and flows to a home or business where it provides lighting or refrigeration, charges a computer, or powers countless other end-uses.

Because distributed generation is connected directly to the distribution grid, the transmission step is not needed. Up to ten percent of electricity can be lost during transmission, depending on various factors such as distance and current. By generating close to where electricity is used, the power that would be lost during transmission is instead put to an end-use. Additionally, renewable DG can be integrated into existing or planned structures, rather than creating a footprint entirely its own. Rooftop Solar Photovoltaics and Combined Heat and Power are two examples of DG commonly used today that don’t require an increased use of surface area.

Despite the reasons that I like distributed generation, it faces several challenges: technical, market, regulatory, legislative, and logistic. Technically, there are concerns about the ability of distribution grids to move generation not only to homes and businesses, but also away from them. This is needed to move solar power from a home with solar panels to a neighbor’s home, during times that generation is greater than on-site need. Scheduling electricity so that the amount generated meets the demand used is also complicated by renewable DG. This is due to the intermittent characteristic of renewables; they do not generate a constant quantity of electricity at all times. Additionally, many details of the “interconnection agreements” with distribution utilities (PG&E in most of the San Francisco area) need to be rethought as the amount of DG increases.

Several of these difficulties are being worked out in one way or another at the state level. How DG owners get paid for the excess electricity they generate is the topic of a current rulemaking proceeding at the California Public Utilities Commission. Additionally, several bills related to DG are making their way through the California Senate and Assembly. Feed-in-Tariffs, Net Surplus Generation, and Net Metering are all policy details related to customer-owned distributed generation that are being worked out at the state level.

The technical issues are also being addressed. In April, I attended a workshop about “Rule 21,” the section of a utility’s rulebook (called a tariff) that describes connecting a generation unit to the distribution grid. To facilitate the interconnection process now, the California Public Utility Commission recently required each California Investor Owned Electric Utility to publish a map indicating grid capacity and other information about their distribution system. The idea of this is to provide initial useful information to developers of distributed generation. They can see the limitations of their chosen location, or if the situation allows they may be able to choose a better location for their project. Seeing the map requires logging in with PG&E, but if you are a customer with an online account you can log in and look at your neighborhood or just check out the map.

Legislation, policy, regulation, and technology are all pushing towards increased distributed generation in California. Markets can see the direction the state is headed and are adjusting so that they can benefit from the changes. Despite the many challenges DG faces, it seems to be on its way.

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