Distributed Solar Generation

Transcription

1 Project Proposal for Distributed Solar Generation Laura Criste, John Hoffman, Josh Grant George Mason University February 16, 2017 Copyright 2007 by Karl E. Wiegers. Permission is granted to use and modify this template.

2 Project Proposal for Distributed Solar Generation Page ii Table of Contents 1. Introduction Problem Statement Scope Preliminary Requirements Technical Approach Expected Results Stakeholders Project Plan Milestones Approvals... 1

3 Project Proposal for Distributed Solar Generation Page 1 1. Introduction Northern Virginia Electricity Cooperative (NOVEC) is a customer-owned, not-for-profit electric utility based in Northern Virginia. NOVEC sell and delivers energy through an electric infrastructure which includes 63 electric substations and approximately 7,100 circuit miles of lines to 165,000 customers. The company purchases and generates electricity at an annual average of cost of $80 per megawatt hour (MWh). NOVEC recovers its annual energy sales and delivery costs through a tariff which charges residential customers based upon each unit of energy consumed. The energy sales reflect the cost of the energy commodity while the energy delivery cost is NOVEC s cost to own and operate its electric infrastructure (wires and substations) used to deliver the energy commodity to the ultimate customer. These infrastructure operating costs include operating and maintaining the infrastructure, taxes and debt financing. Approximately 160, or 0.1 percent, of NOVEC s customers own and operate solar panels. This proportion is expected to increase for a few reasons. Renewable energy has grown in popularity as individuals become more interested in environmental issues. Solar panel prices have also dropped significantly since 2009 and they are forecasted to continue falling. In addition, the federal government helps reduce the cost even more through a 30 percent tax credit that incentivizes the purchase of solar panels for use on residential and commercial properties. With increased solar users, NOVEC s ability to recover its electric delivery system operating costs via electric tariffs based solely upon customer energy consumption becomes more difficult to realize and to justify. Electric energy consumption for customers with solar panels is reduced, but neither customer reliance on the electric delivery system nor NOVEC s investment and operating cost in its electric delivery system are necessarily reduced. NOVEC must continuously serve what the customer demands at each instant of time whether the customer s solar panels are reproducing energy or are dormant. Solar production is based upon the amount of sun, or solar irradiance, hitting solar panels which is difficult to predict and uncertain at most times. Solar irradiance is the amount of light energy from the sun as measured at the earth s surface. Part of the radiation is reflected and part is absorbed. The absorbed radiation raises earth s temperature and part of it can be converted to electricity by solar panels. Solar irradiation varies by season, month and time of day. When the sun is shining, solar panels use the sun s radiation to create electricity and solar panels reduce the load requirements on NOVEC. If customers solar output exceeds customers usage requirement, current regulations require NOVEC to purchase customers excess solar output at the same rate that the customers pay for energy and energy delivery. Should the customer generate more energy than it consumes during a calendar year, NOVEC does not have to pay for any of the excess solar energy produced. When there s low irradiance or darkness, panels go dormant. When customers have no solar production capability, NOVEC will serve 100 percent of the customers requirements. When the customer has solar production capability, NOVEC must serve the difference between the customers usage requirements and the amount of solar output at each instant of time. It is important for NOVEC to continue covering its operating costs at any level of solar customer penetration in order to remain a viable, financially healthy company so NOVEC must change its pricing structure. It is essential that the pricing structure for solar and non-solar customers is fair so that customers aren t discouraged from installing and using solar generation.

4 Project Proposal for Distributed Solar Generation Page 2 2. Problem Statement The goal of this project is to determine how the solar customer is using NOVEC s infrastructure and to develop a fair cost recovery methodology that NOVEC can use to charge residential customers with and without solar panels while balancing two opposing requirements. The method must both allow NOVEC to still meet the operational and financial requirements of a healthy utility provider and encourage NOVEC customers to supplement power requirements through the installation of solar panels. The recommendation must determine whether there is a penetration level where NOVEC should switch from charging customers by unit of energy to charging for the proportion of the system used. The methodology will include recommendations at defined solar penetration levels: one, three, five, 10, 15, and 20 percent. Each of these levels may have a different recommendation that includes changing the cost per unit of energy consumed, creating a fee based on percent of system consumed, or a combination of the two. 3. Scope This project will consider residential customers, who grow at a rate of between two and three percent each year. There is insufficient data available for commercial customers using solar generation. The project will also focus on the cost of NOVEC s operations and not on the cost of energy because the price of energy is volatile and difficult to predict. There are three electric energy price predictor variables: fuel, weather, and equipment outages. Predicting quantitative savings from reduced energy purchases under these uncertainties is a project in itself and is out of scope for this semester. The team will include some qualitative commentary about that energy prices during peak-use periods and will use this to explore whether solar production is during peak periods and could therefore result in energy cost savings for NOVEC. Therefore, overall, we will focus on recovering costs through changing customer cost structure rather than how and when NOVEC purchases electricity. 4. Preliminary Requirements Operational Requirements The distributed solar generation (DSG) program shall provide irradiance probability distribution curves on a monthly basis. This will allow NOVEC to have an approximation of how much solar will be generated and at what times. The DSG program shall provide electricity consumption probability distribution curves on a monthly basis. This will allow NOVEC to predict solar generation consumption and determine the impact to its infrastructure requirements. Solar penetration levels shall be considered at 1%, 3%, 5%, 10%, 15%, and 20% of NOVEC customers. Financial Requirements The Recommended cost recovery methodology shall give NOVEC a high probability of recovering all its operational cost on an annual basis. The recommended cost recovery methodology shall continue to provide a financial savings to the solar customer. Legislative Requirements NOVEC shall be able to purchase excess solar power at the same rate that it sells electricity to the solar customer.

5 Project Proposal for Distributed Solar Generation Page 3 5. Technical Approach The team will use NOVEC s data for operating cost, customer solar generation and electric usage to find the probability distributions of the solar generation output by month and solar versus non-solar electric consumption by month using statistical software such as R or a simulation software such as Arena. Using the monthly solar generation probability distributions, the team will increase the solar users to the different penetration levels to determine the anticipated monthly solar versus nonsolar electric consumption. The team will use the predicted consumption at the various penetration levels combined with the price of purchasing and maintaining solar panels and NOVEC s operating costs to find an optimal solution that covers NOVEC s operating costs, doesn t provide disincentives solar panel usage without putting too much cost on non-solar users. 6. Expected Results NOVEC will receive a cost recovery recommendation that will allow the company to recover its owning and operating costs of its electric delivery system in the form of a Tableau dashboard that can be viewed by month and solar customer penetration levels. NOVEC will also receive a monthly solar generation output probability distribution for each of the solar generation penetration levels and a monthly NOVEC system electric consumption probability distribution for each of the solar generation penetration levels. The team will also provide a final presentation and final paper. If any documentation is needed to use the final product, the team will provide a user manual. 7. Stakeholders The immediate stakeholders of this project are: Robert Bisson, NOVEC s Vice President Electric System Development Angie Thomas, NOVEC Project Manager Dr. Kathryn Laskey, George Mason University Professor and Capstone Project Instructor Additional stakeholders include NOVEC s customers to whom it is important to receive undisrupted electricity at a fair and reasonable price while not being discouraged from installing solar panels.

6 Project Proposal for Distributed Solar Generation Page 1 8. Project Plan

7 Project Proposal for Distributed Solar Generation Page 1 9. Milestones Event or Deliverable Target Date Responsibility Project charter approved 2/16/2017 Project plan completed 2/13/2017 Project plan approved 2/16/2017 Project team assembled 1/28/2017 Project execution initiated 2/17/2017 Project execution completed 5/12/2017 Customer acceptance 4/28/2017 Project closed out 5/12/ Approvals Approval Decision: Approved Revise proposal and resubmit for approval Role or Title Name and Signature Date NOVEC s Vice President Electric System Development Robert Bisson 02/15/2017 George Mason University Professor and Capstone Project Instructor Dr. Kathryn Laskey