Key Features of Energy Storage Systems that Impact Interconnection Review

To understand why each of the topics in the Toolkit chapters have been identified as barriers to the safe, reliable, and efficient interconnection of ESS, it is important to explain some of key features of ESS that distinguish it from the DERs that have historically been interconnected to the distribution system. This brief introduction to these concepts will assist in navigating the Toolkit.

1. Understanding ESS System Capabilities and Behavior

Perhaps the single most defining feature of ESS, whether installed alone or co-located with another DER, is that it offers a level of control that was not often available or utilized by other DERs. ESS can control how much power is exported to the grid (or imported from the grid or a co-located DER) at any one time. ESS can act as a purely non-exporting resource, a full-export resource, or a limited-export resource that limits export to a specified magnitude that may be less than the total amount of power the resource is theoretically capable of exporting at any one time. In addition to introducing greater levels of control over the magnitude of import and export, ESS can also control when a DER system imports or exports power. For example, an ESS may be able to limit export during periods of low demand or excess generation and instead ramp up export during periods of peak demand or low generation. If properly evaluated in screens and studies, such control flexibility can better serve energy needs while also allowing more of DERs to interconnect without triggering the need for upgrades.

To illustrate this more specifically, it is helpful to consider just one example of how ESS systems may be used in balance with other DERs on the grid. In some areas of utility grids across the country, there is starting to be abundant solar energy produced during the middle of the afternoon—enough that at some times during the year there may be more energy than demand. Inversely, there are also certain periods of the day when there is insufficient clean energy being produced to serve load, particularly in the early evening hours when solar is no longer generating, but demand on the system remains relatively high. ESS can play an important role during these periods by importing (or storing) power during those periods of abundance. This can be done by charging from an onsite solar system, causing the solar system to cease export of all or some of its energy while the ESS charges. Or the ESS can charge from the grid itself, essentially utilizing the excess solar energy being produced elsewhere on the system. Then, when the grid conditions shift and more energy is once again needed to serve demand, the ESS can discharge power either onto the grid, or to serve onsite load such that the overall energy demand on the grid is reduced. This behavior can also be optimized in response to seasonal variations in peak demand.

While this example illustrates the significant flexibility benefits that ESS can add to the distribution system, the manner in which any one ESS will be operated depends on a variety of factors including market conditions, rate structures, and grid constraints and opportunities. In addition to external energy market factors, behind-the-meter systems are also designed to serve specific customer needs. The fixed rates or market signals that DER systems may be responding to are typically designed to incentivize the export of energy when it is needed the most and to deter energy export when there is less demand. And, the amount of energy needed (i.e., the peak and minimum load) often closely aligns with when a feeder or substation will experience technical constraints (i.e., if there is low load, less generation can be accommodated without triggering a thermal, voltage, or protection constraint than would be the case during a period of higher load). However, rates and market signals are rarely crafted on a feeder or substation basis. Thus, each location will have unique characteristics that may mean that grid constraints do not necessarily correspond neatly to the rate or market incentives that ESS may be responding to.

Hence, the purpose of the interconnection review process is to evaluate the grid conditions at the particular Point of Interconnection((Point of Interconnection, as defined similarly to SGIP, is the point where the Interconnection Facilities connect with the Distribution Provider’s Distribution System. This is also referred to as the Point of Common Coupling (PCC) in technical standards like IEEE 1547.)) for each project to determine whether the proposed DER will require grid upgrades in order to operate without causing reliability impacts to the distribution system. This review is largely independent from the rate structure or market program that a DER may be participating in. Whether a proposed project will require upgrades depends upon how and when it will be operated as well as the particular grid conditions at the proposed Point of Interconnection.

2. Changing Existing Interconnection Assumptions

Presently, most interconnection rules permit, or even require, utilities to evaluate ESS assuming that the full nameplate capacity of ESS will be exported at all times, and that ESS co-located with solar will simultaneously export at all times. These assumptions are extreme for a number of reasons. First, storage will never export continuously (i.e., never ceasing to export during its operation) because it has to be charged at some point. Second, while customers often prefer to have flexibility to operate when and how they choose, there are currently no known reasons for a customer or system owner to choose to operate a system in that manner. Absent a rate structure that is intended to encourage maximum export, there would be little reason to do so in order to serve customer load onsite, and the distribution upgrade costs alone would be a significant deterrent. However, despite the practical reasons why this behavior is unlikely, utilities need evidence of a reliable physical solution that prevents this behavior in order to alter their interconnection review practices and to avoid overassessment of impacts.

The good news is that there are multiple methods available to reliably control export such that a project can safely be evaluated as either a non-export (zero export) or limited-export (maximum export value) project:((When referring to both non-export and limited-export systems in this document, we use the term “export-controlled.”))

• A non-export ESS((Non-export ESS is also referred to as “Import Only Mode” in the UL 1741 Certification Requirement Decision for Power Control Systems. As defined there, the “ESS may import active power from the Area EPS for charging purposes but shall not export active power from the ESS to the Area EPS.”)) is one that implements advanced controls to forbid itself from exporting to the grid. It may be charged either by onsite generation (e.g., solar) or from the grid. A non-exporting system may be utilized to meet tariff compliance (such as Net Energy Metering, or NEM) or to align with interconnection pathways for non-exporting systems.
• A limited-export ESS is one that implements controls to set maximum export power to a specified magnitude lower than the full nameplate capacity. Such a system can export to the grid and can serve onsite load during discharging. While charging, either the grid or onsite generator can power the ESS. Depending on the intended use case and how much backfeed the grid can accommodate, the system is designed to allow a certain level of export.

As noted above, interconnection review has typically been conducted assuming that the proposed project will be exporting its entire potential output 24 hours a day, 365 days of the year, or that it will not be exporting power at all. Some state interconnection procedures, such as those in Arizona, California, Hawaii, Illinois, Iowa, Maryland, and Nevada have long recognized the existence of non-exporting systems and have provided for a slightly different, and typically more efficient, review process for non-export systems.((AZ Administrative Code § R14-2-2623(B); CA Pub. Util. Comm., Southern California Edison, Rule 21, § G.1.i (Screen I); HI Pub. Util. Comm., Rule 22; IL Admin. Code tit. 83, § 466.80(c); Iowa Admin. Code r. 199.45.7(3); Code MD Regs. 20.50.09.11(C)-(D); NV Pub. Util. Comm., Dkt 17-06014, NV Power Co. Rule 15 § I.)) However, FERC SGIP and states that have followed that model, such as North Carolina and Ohio, typically have no mention of non-exporting systems or guidance for how they should be reviewed.

Over time, interconnection procedures have started to acknowledge that solar systems are incapable of producing power when the sun is not shining, and interconnection review in some places has thus recognized that output will differ between day and night. However, the assessment usually relies on a set of fixed hourly assumptions (i.e., solar production from 10 am to 4 pm).((See, e.g., MN Pub. Util. Comm., Dkt. E-999/CI-16-521, Order Establishing Updated Interconnection Process and Standard Interconnection Agreement, Attachment: Minnesota Distributed Energy Resources Interconnection Process, § 3.4.4.1.1 (Aug. 13, 2018) (MN DIP) (“Solar photovoltaic (PV) generation systems with no battery storage use daytime minimum load (i.e., 10 a.m. to 4 p.m. for fixed panel systems and 8 a.m. to 6 p.m. for PV systems utilizing tracking systems), while all other generation uses absolute minimum load.”).)) Furthermore, the concept of a limited-export system (i.e., one that uses software or hardware to limit export to a non-zero value) is new and has only begun to be recognized by interconnection procedures in the last few years as interest in ESS capabilities has grown.

Since the controllable nature of ESS is critical to its ability to provide energy services, meet customer needs, and avoid or mitigate grid impacts, interconnection procedures will need to include greater recognition of export control in the screening and study process. Without this capability, ESS will be assumed to create grid impacts that might be avoided, which will increase the cost of ESS deployment and also increase the cost of other DERs that could rely on ESS to help mitigate grid impacts. This Toolkit focuses on the technical standards and procedural modifications that are necessary for interconnection rules to evolve to align with ESS capabilities while also ensuring safety and reliability.