8 Replies Latest reply: Nov 22, 2013 5:41 AM by jeyeddu RSS

    Policy, regulations and tariffs for integrating customer-owned PV into mini-grids

    C4D Enthusiast

      Does any one have experience, case studies or references on policy, regulation and tariff approaches for integrating customer-owned PV into mini-grids? That is where a mini-grid, 100kW-2MW, is in operation and private customers wish to install grid-connected behind-the-meter PV systems. I am looking for information on dealing with issues such as quality of supply, ramp rates, sharing of integration costs, tariff setting and feed-in tariffs.

      Thanks, Nic

        • Re: Policy, regulations and tariffs for integrating customer-owned PV into mini-grids
          1203634 C4D Enthusiast

          Please visit SEIA for good information. Net Metering | SEIA

           

          Also find more info in www.freeingthegrid.org

          • Re: Policy, regulations and tariffs for integrating customer-owned PV into mini-grids
            jeyeddu C4D Enthusiast

            Thank you for given me the opportunity to come back, even though I have been following the discussions on the quiet.

            Who owns the mini-grid? Is it a public/state, a community ownership or what? Otherwise integrating customer-owned PV into it may not be very different from net-metering or feed-in tariffs arrangements we find in places like Germany, etc. What one has to be careful with will be the capacity size and limit of the mini-grid to ensure that aggregated customer-owned PV systems do not overload the minigrid and eventually collapse it.

            Key regulation issues will include

            • how much capacity per customer owned system will be allowed and per day to be pumped into the minigrid?
            • Is the mini-grid expandable?
            • If the minigrid is public/state owned, what will be the government's policy regarding tariff; is it going to just cover the local operations or current expenses excluding infrastructure expansion and cost?
            • If the minigrid is private, how much tariff is necessary to cover investment and operational costs? Is the government prepared to provide some reliefs for the relatively less-endowed communities?

             

            These are the few regulatory and policy questions that come to mind for now.

              • Re: Policy, regulations and tariffs for integrating customer-owned PV into mini-grids
                C4D Enthusiast

                Hi Joseph Essandoh-Yeddu, thanks for your contribution.

                The mini-grid is currently state owned, they collect a tariff based on consumption and a fixed charge. There is little scope for expansion.

                Do you have any references or examples that answer your question:

                how much capacity per customer owned system will be allowed and per day to be pumped into the minigrid?

                I am particularly interested in how the capacity is determined for the system and how it is allocated to customers. That is what level of renewable penetration is allowed on the mini-grid and each of its feeders? Is the capacity allocated on a per customer basis or is it on a first connected basis?

                What limits are placed on ramp rates, both increasing and decreasing? What frequency control is required? How are these determined?

                Regards

                Nic

                  • Re: Policy, regulations and tariffs for integrating customer-owned PV into mini-grids
                    jeyeddu C4D Enthusiast

                    Hi Nic, thanks for your quick response questions.

                     

                    If the system is state owned, is the tariff based on total cost recovery or just able to cover the operational expenses? If not how much or what percentage of cost is the state covering?

                     

                    Ghana has had a renewable energy law passed in 2011. It encourages feed -in tariff and for that matter has published a range of feed-in tariffs for power generation from different renewable energy sources; hydropower, wind, solar and biomass; the highest range being for solar. We have observed that more that 20% penetration for solar power in terms available capacity can push the end-user tariff up. To avoid that, we are limiting the total capacity of various renewable energy systems that can come on line. It is based on this experience that the question: "how much capacity per customer owned system will be allowed and per day to be pumped into the minigrid?" comes from. We do not have any specific reference, but it is a study we have begun, largely because the utility companies are concerned of collapsing the local grid.

                     

                    Starting with solar, we have began by registration all interested solar PV home power generators to establish the total capacity available that can be pumped into the grid.

                    You do not qualify to benefit from the feed-in tariff if a customer refuses or fail to register with the Energy Commission.

                    It is also illegal to pump your excess generation into the grid if you have not registered.

                    We shall then divide the needed capacity over the registered customers. Only such customers will be entitled to the feed-in tariff and will only be paid for the capacity allocated to them and based on their net-meter readings. Such will dictate how much capacity per customer owned system will be allowed and per day to be pumped into the minigrid without compromising the grid integrity?

                     

                    We are taking lessons from existing cap and trade market mechanism for sulphur emission pollutants and the carbon markets as well in some developed countries. We are also looking at imbedded generation in countries like Germany to find out what lessons we can pick from there for our model. I am part of the team in charge of the modellling.

                     

                    So no direct answers for you but we are now implementing such a model in our country. We just started.

                      • Re: Policy, regulations and tariffs for integrating customer-owned PV into mini-grids
                        C4D Enthusiast

                        Hi Joseph Essandoh-Yeddu,

                        Thanks for continuing the discussion.

                         

                        To answer your questions, the state owned system tariff is based on a total cost recovery, with fuel cost risk held by the Government. Some subsidy is provided to small consumers.

                         

                        The approach taken to allocation of capacity that you describe is interesting. I wonder how this method will deal with future applications to connect capacity and how it would allow penetration to go beyond 20%?

                         

                        Your observation

                        that more that 20% penetration for solar power in terms available capacity can push the end-user tariff up.

                        is interesting, do you know why the costs increase above this level of penetration? Is it due to capital costs, which may be covered by the customer owned systems? or due to the integration costs and reserve margins? Is energy storage being used to assist integration?

                         

                        The approach taken to allocation of capacity that you describe is interesting. I wonder how this method will deal with future applications to connect capacity and how it would allow penetration to go beyond 20%?

                         

                        My colleagues at IT Power provided tariff advice to the Cook Islands in June 2013. The issue the advice was sought on was how to deal with customer owned solar systems being connected to the islands grid. The existing feed-in tariff was providing a short payback period and leading to a rapid increase in capacity and loss of revenue to the utility. Our advice was to change to a gross feed in tariff using separate meters. The gross feed-in tariff was linked to the cost of generation from the central diesel power station. The customers then purchased energy from the utility at the standard tariff that covered generation, network and billing charges. The effect of this arrangement is to protect the revenue needed to maintain the network, manage integration and it also increases the payback period, slowing the rate of uptake of solar. I understand that policy based on this advice is being implemented.

                         

                        I look forward to hearing how the model works for you.

                         

                        Regards,

                        Nic