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The good news is that with some regulatory changes, both big and small, renewable energy capacity at the distribution level may satisfy demand without requiring the extensive lead time for larger, utility-scale resources.
Fremont, CA: With legislation establishing open access to the transmission level of the energy grid, the way the United States regulates power changed more than 40 years ago. Commonly referred to as PURPA, it established independent system operators (ISOs) nationwide to control supply and demand impartially. However, the Inflation Reduction Act gets anticipated to bring a quick flood of renewable energy systems to the grid, so even if the law had a significant impact, they now urgently need to review how electricity markets are set up to accept them.
By locating renewable resources at the distribution level of the grid, which is closer to where they are required, they may significantly reduce this demand. However, they will need to take several necessary measures to address significant system hurdles before users can expand the use of renewable energy on the grid. The good news is that with some regulatory changes, both big and small, renewable energy capacity at the distribution level may satisfy demand without requiring the extensive lead time for larger, utility-scale resources.
• Increase openness by unlocking grid congestion data.
Renewable energy developers in most of the United States are unsure how the grid can handle the surge of new power generation in a specific region of the system. Developers face cost unpredictability and delays as proposals get evaluated for their potential impact on the grid and expenses.
• Include dispersed generation in grid planning.
The typical method of utility grid design solely takes into account the transmission level of the grid, contrary to prevailing wisdom that massive, centralized power plants would offer economies of scale benefits. Additionally, it disregards the advantages and disadvantages of energy resources used in distribution, like community solar and energy storage.
Promoting and rewarding utilities for contributing to the expansion of distributed energy resources is essential. For instance, private developers and Xcel Energy, the state's major utility, have participated in community solar schemes in Colorado. Unfortunately, this strategy may limit the possibility for non-utility investors. Still, it does offer a more environmentally friendly process that won't conflict with the continued existence of the electric utility as they currently know it.
• Enact laws and regulations that promote the development of distributed generation on a long-term, proactive basis.
Some governments are already promoting the development of distributed generation through state policy and regulation. Distributed generation, situated close to end customers, offers special resilience and dependability advantages. In addition, projects represent a reduced interconnection strain on the grid and have a smaller environmental impact.
State legislation is necessary to establish programs that let renewable energy providers build projects to serve local communities because the distribution level of the grid does not have open access. States with solid program incentives to promote additional capacity include Illinois. Although the incentives are appreciated, the fundamental advantage of these programs is that they establish a procedure for expanding the grid's distribution level capacity.
