SMALL UTILITY-SCALE RESOURCES (DISTRIBUTED GENERATION)

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Summary

Small-scale resources are often referred to as distributed generation (“DG”)

Substantial policy-driven interest in encouraging the procurement of DG in California

Specific procurement programs pay premium for the benefits and/or values provided by small-scale projects

Prior versions of the RPS Calculator have included “High DG” portfolio to study the impacts of such small-scale resources

Version 6.0 of the RPS Calculator:

Includes an updated DG resource data set for Solar PV, wind and biomass

Uses same methodology to value large and small-scale resources

Energy Division staff is seeking comment on potential modifications to Version 6.0 in Track 2

Version 6.0 of the RPS Calculator uses same resource valuation methodology for both small-scale and large-scale resources, except transmission costs

Small-scale resources often connected to distribution and may avoid transmission costs

RPS Calculator does not assign transmission costs to small-scale resources (other than interconnection costs)

RPS Calculator thus calculates trade-off between small-scale and transmission-constrained renewables based solely on avoided transmission costs

May be additional benefits (or costs) for small-scale resources appropriate to include in RPS Calculator

Valuation of Small-scale Resources in RPS Calculator

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Potential direct ratepayer benefits that small-scale projects located near loads may provide:

Reduced system losses Avoided congestion costs Avoided need for generation in capacity-constrained areas such as LCR

areas Deferral/avoidance of investments in transmission infrastructure Deferral/avoidance of investments in distribution infrastructure

Applicability and magnitude varies considerably with location, local grid conditions, and its performance characteristics

Commission staff intends to identify and quantify additional benefits for Version 6.2 of calculator in track 2a

Potential Benefits of Small Utility-Scale Resources

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Small Utility-Scale Resource Assessment

• Black & Veatch completed an updated resource assessment for California for the RPS Calculator

• The resource assessment included large and small-scale resources

• Small utility-scale resources included:– Solar PV– Biomass– Wind

• Methodology and assumptions described in “California Renewable Energy Resource Potential and Cost Update” presentation

• Biomass and wind DG assessments performed in 2013

• DG Solar PV dataset based on Black & Veatch large rooftop identification in 2009 and E3 Local Distributed PV study in 2012

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E3 Local Distributed PV (LDPV) Potential Study Identified the total MW of PV on residential roofs,

commercial roofs, and ground sites that could be interconnected at each substation

Defined LDPV such that its output would be consumed only by load on the feeder or substation to which it is connected: “no backflow”

Potentially less expensive/faster interconnection May target higher value locations on the grid

(where distribution avoided costs are high) May achieve other policy goals such as reducing

environmental impact, creating local jobs, enhancing energy awareness and promoting redevelopment

Study available at: http://

www.cpuc.ca.gov/NR/rdonlyres/8A822C08-A56C-4674-A5D2-099E48B41160/0/LDPVPotentialReportMarch2012.pdf

Results - Potential

Interconnection potential found by substation under different scenarios (least cost procurement scenario shown)

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0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2020

DG

Capa

city (

MW

)

Ground > 10 MWGround < 10 MWCommercial RoofsResidential Roofs

Refined DG PV Resource Assessment

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In September 2013, Black & Veatch completed a “Southern California DG Potential Study” to identify PV potential around key SCE 230 kV substations affected by SONGS retirement

New analysis techniques to identify potential project size and cost of energy for all parcels tied to six substations

Included residential and commercial/industrial rooftops First ever assessment of parking lots/structures

Study identified significant DG in urban areas, especially for high concentration DG (HCDG) potentially connected to subtransmission system

The Black & Veatch study further refined our understanding of the technical potential of wholesale DG resources and the importance of location in determining value to the grid, not arbitrary size caps (i.e. RAM)

Identified Large Roofs and Parking Lots

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Technical PotentialCapacity, MWdc

0.25

> 3

Area Near John Wayne Airport

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Technical PotentialCapacity, MWdc

0.25

> 3

In addition to technical potential, LCOE calculated for rooftop and parking applications for each parcel. Only larger potential sites shown here

Example Detail (1.1 MWdc Rooftop, 7 MWdc Parking Lot, Approx. $120/MWh)

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Technical PotentialCapacity, MWdc

0.25

> 3

Potential estimates: Theoretical: 11 GW Technical: 8 GW Near-term Developable: 800 MW

Parking lots represent about half the potential

Some sites / areas have “high concentration” DG: 20-70 MW Shopping malls, campuses, etc. Top 11 areas are 450 MW combined Economics potentially competitive with transmission-tied solar

New scenarios may be needed to cost effectively interconnect above distribution level (subtransmission) – very cursory assessment

Preliminary Conclusions Of Southern California DG Assessment

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This was a preliminary study and the results have not yet been incorporated into RPS calculator Version 6.0.

The assessment found significantly more potential than previous studies – particularly by including potential for PV development on parking lots.

Version 6.0 of the calculator does not currently have functionality to distinguish the impacts of such resources may have in comparison to large-scale renewables through their value to ratepayers.

Energy Division staff intends to identify and quantify these attributes for Version 6.2 so that the RPS Calculator can be used to evaluate the degree to which small utility-scale renewable generation can displace transmission-constrained renewable resources.

Preliminary Conclusions Of Southern California DG Assessment

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RPS Calculator Guide

• The parameters that affect DG cost and potential can be found on the following tabs:– Resource_Char: cost and performance input assumptions for

each major category of renewable technology (including distributed technologies)

– Supply_Curve: renewable resource potential considered in model (including distributed technologies)