Last Thursday, FERC issued a Notice of Inquiry (pdf) seeking comments on the extent to which barriers exist that may inhibit the integration of certain renewable energy sources into the electric grid. FERC particularly identified locational challenges and limited dispatchability as problems associated with resources like wind and solar that can adversely affect reliability and (in the realm of “unintended consequences”) can require the addition of more conventional resources for balancing purposes.
In this proceeding, FERC intends to explore how existing rules, regulations, tariffs, or even industry practices hinder the development of variable energy resources, through either discrimination or imposing unjust rates, and as part of this, to consider potential reforms. In the past, FERC has adopted targeted rules to encourage renewable resource development – such as standardizing interconnection agreements for wind resources (Order 661), or adopting a reduced penalty for imbalances caused by intermittent resources (Order 890). In this proceeding, FERC will take a “fresh look” at all existing policies and rules, “with the aim of removing unnecessary barriers to transmission service and wholesale markets for Variable Energy Resources (“VERs”) and other technologies that may aid their integration, and promoting greater efficiencies that ultimately will reduce costs to consumers.“ The seven specific areas FERC singled out are:
- data and reporting requirements, including the use of accurate forecasting tools;
- scheduling practices, flexibility, and incentives for accurate scheduling of VERs;
- forward market structure and reliability commitment processes;
- balancing authority area coordination and/or consolidation;
- suitability of reserve products and reforms necessary to encourage the efficient use of reserve products;
- capacity market reforms; and
- redispatch and curtailment practices necessary to accommodate VERs in real time.
However, FERC will not consider transmission planning and cost allocation issues, as these are being considered in another docket. (Transmission Planning Processes Under Order No. 890, Docket No. AD09-8-000) Comments are due 60 days from publication in the Federal Register, expected to be the last week in March, 2009.
