Below is an update from Lloyd Hoffstatter:
FERC, the Federal Energy Regulatory Commission, is charged with managing the electrical transmission and distribution grids. As such its role is critical in the adoption of Distributed Energy Resources (DER) as it determines the process to connect renewable generation and energy storage to the utility grid. Some recent orders have helped move that effort forward. FERC Order 841 removed some barriers to distributed and behind the meter energy storage. However, interconnection times for new renewable energy or storage projects can take several years, resulting in a high percentage of cancellations.
In June 2022 FERC announced a plan of major changes to help free up the backlog of waiting solar, wind, and energy storage projects, shorten permitting and interconnection time frames, reduce interconnection costs, and clarify utility and developers technical and financial responsibilities in the interconnection process. The proposed changes are in the discussion stage with utility, industry, and other stakeholders.
Order 2222 was enacted in September 2020 and is presently being adopted by grid operators in about 2/3 of the country. This allows DER projects into the wholesale energy markets for the first time, allowing small renewable generators to compete with existing conventional power plants. This in turn will help hasten the move toward cleaner energy sources but also help alleviate congestion on local grids, taking advantage of DER’s shorter installation times and distributed resources such as rooftop solar and EVs. The order directs regional transmission organizations (RTOs) and independent system operators (ISOs), like the NYISO, to allow these resources to compete in wholesale markets, and allow for aggregators to combine small DER resources for a better competitive position, help reduce costs for the bulk power system, reduce small generator interconnection costs, and minimize the need for new transmission and distribution infrastructure.
FERC is presently reviewing Order 2222 compliance plans from RTOs / ISOs and adoption of Order 2222. More information on the NYISO compliance plan can be found here.
More information on FERC proposed changes and Order 2222 can be found in the attached references: