Amid flood of solar applications, Maine seeks more targeted approach

Two years after opening the doors to small-scale renewable energy development in Maine, officials must now figure out how to locate new projects in the best places on the grid.

A group of industry members, advocates, utility stakeholders and state officials prepare to release the first of two reports that will help Maine lawmakers develop new energy incentive policies renewables and plan for grid upgrades for years to come. It comes after the legislature in 2019 lifted project size limits for the state’s net metering program and implemented other policies that led to a crush of new project applications pending approval. by public services.

This high level of developer interest “was very robust and perhaps beyond initial expectations” when the laws were passed, said Dan Burgess, director of the governor’s office of energy.

“I think it’s fair to say that we weren’t sure exactly what we would see when the law was passed,” said Jeremy Payne, executive director of the Maine Renewable Energy Association. “What is clear is that politics have made Maine a highly desirable place to deploy capital, create jobs and generate new taxable value.”

Few projects have actually gone online since the adoption of the 2019 laws, in part due to interconnection delays and the pandemic, as well as the typical project development timeline.

The laws mainly paved the way for the development of a new generation of solar energy. Currently, the developers have applied for approval to interconnect Maine’s two investor-owned utilities for approximately 2,400 megawatts of solar power, including 1,350 megawatts under the Maine’s net metering program. The state – which in Maine is called “net energy metering” – according to the governor’s office of energy. .

Many of these projects are likely not to be built, Payne said. Central Maine Power, the larger of Maine’s two investor-owned utilities, reported annual peak demand of 1,810 megawatts this year. Versant Power last recorded 382 megawatts in 2019.

Adjusted for the size of the service territory and the number of customers, “we exceed anything a utility has ever seen in terms of processing from 1 to 5 megawatts [photovoltaic] projects, ”said Jason Rauch, policy manager at Central Maine Power.

With great interest and long wait times for developers seeking approval, officials and members of the industry now want to find ways to make the process by which utilities assess the viability of projects more efficient. . They want to make it easier for developers to offer solar and other renewable installations in places where they will benefit the grid, in particular by avoiding transmission costs for consumers.

But it will also likely require changes to the data the utilities collect and developer access to that data. Discussion of what these changes would entail is still in its early stages, but members of the stakeholder group hope their meetings can advance progress towards a solution.

“I think it’s clear that we’ll need some grid upgrades, and those upgrades need to take into account both the ongoing clean energy development and upcoming electrification in the sectors. transportation and construction in particular, ”said Phelps Turner. , Senior Lawyer at the Conservation Law Foundation and New Class Member.

The group was created by law last summer and is known as the Distributed Generation Stakeholder Group. “Distributed generation” refers to renewable energy and storage projects up to 5 megawatts. Such projects, Turner noted, have more immediate implications for the distribution network – although they ultimately affect the transmission network as well.

The group began meeting in September and is due to deliver the first of two reports to the state legislature by January 1. This report will include preliminary recommendations for network upgrades and new distributed generation incentive programs, such as net metering, which will begin in 2024. The group is expected to determine a target amount of distributed generation as part of this report. ‘a new incentive program that would represent 7% of the state’s expected electrical load. The law passed this summer set a non-binding target of having 750 megawatts of 2- to 5-megawatt commercial distributed generation projects in operation by the end of the current net metering program.

Other expert groups have made recommendations over the past year and a half for grid modernization and renewable energy development in Maine. The new stakeholder group will build on this work, said Burgess, who is a member of the group.

“What we’re going to do is look to take what we’ve heard and learned from all of these processes and also look at what’s already being done and try to figure out where the gaps are,” Burgess said.

Match supply to demand

“We are dealing with a network that was not designed for much of distributed generation,” said Philip Bartlett, chairman of the Public Utilities Commission and member of the stakeholder group. The group’s discussions, as well as a companion brief to the committee, are aimed at helping understand how to attract resources where and when they are needed, he said.

Maine’s two investor-owned utilities are conducting assessments to assess distribution and transmission impacts. But Bartlett noted that it’s not clear whether all of these studies are needed to comply with the requirements of ISO-NE, the regional grid operator.

He added that these issues could be avoided to some extent by identifying early on where projects can be placed on the network to reduce transmission impacts – thus reducing the need for ISO level assessments. This is, after all, the point of distributed generation, he said: build production where the demand is, rather than building it in one place and then delivering it to another via power lines. transmission.

“It would be beneficial for everyone to locate these projects in places where they can connect most easily and not have a negative impact on the system,” said Catharine Hartnett, head of corporate communications at Central Maine. Power.

“We certainly want to provide the information, the data that would be useful, that could get things done in the most efficient way for everyone,” said Hartnett, who noted that the stakeholder group discussions are still in progress. in their early days. “We just don’t know what it is and how we can best deliver it. “

Payne, of the Maine Renewable Energy Association and a member of the stakeholder group, said the renewable energy industry would like more transparency and efficiency from Central Maine Power in its interconnection review process.

“As we’ve said time and time again at CMP – and I really believe it – their success is our success,” Payne said. “If they do their job more efficiently… it’s better for everyone, including taxpayers as well as developers. “

Cost assessment

The possibility that new distributed generation projects will require network upgrades raises a long-standing question of who should pay for upgrades: developers or utilities – and therefore taxpayers. Critics also argue that programs like net metering drive up electricity bills for customers who are unable to pay for solar panels or subscribe to community programs that offer bill credits.

“Versant Power is willing and willing to support the state’s energy policy goals,” wrote Arielle Silver Karsh, director of legal and regulatory affairs at Versant Power, the other investor-owned utility in Maine, in comments sent by email. She is also a member of the stakeholder group. “If the stakeholder group can establish an agreed list of priorities and recognize the likely costs associated with implementing solutions, then utilities will have some certainty that they can move forward. We need to chart a course forward and do it methodically and strategically to minimize any impact on rates as much as possible. “

Disagreements over costs tend to hamper discussions about how to plan for decentralized generation development, said Rebecca Schultz, senior counsel at the Natural Resources Council of Maine who observed the stakeholder group meetings. The “cost,” she noted, can include program administrative costs and bill credits as part of net metering, as well as grid upgrades made necessary by distributed generation projects.

“I think there has been a tendency to use misleading and inaccurate means of communicating the impacts of these programs, where the costs of the program equate to lost revenue for utilities,” Schultz said.

The costs as reported often do not reflect the benefits of these programs for individual participants or for taxpayers in general, she said. For example, she said, some benefits of distributed generation, such as avoided costs in the regional capacity market, naturally flow to taxpayers through reduced electricity rates.

“Distributed own resources also help us protect against volatile fossil fuel prices, like what we see in Maine and the region, where electricity prices are skyrocketing due to our dependence on generators. of natural gas, ”added Schultz.

Having a method of evaluating the costs and benefits of the program will make it easier for stakeholders to decide which projects to encourage and how to allocate the costs, she said. Turner, of the Conservation Law Foundation, noted that as part of his work on the group, he is pushing for a more comprehensive analysis of the project’s costs and benefits.

Once the stakeholder group submits its initial report, it will have another year to prepare a second, more in-depth report, which should contain more detailed recommendations for new programs to incentivize the development of decentralized generation in the region. Maine.

By the time that report comes out, there should be more clarity on the number of projects currently pending approval that will move forward, Payne noted. He said that over the next year and a half, the state will likely see many more projects online.

“I think we have huge amounts of investment capital ready to flow into Maine,” he said. “We are only at the beginning of the process.

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