by Peter Boos, Burns & McDonnell
Although the Federal Energy Regulatory Commission (FERC) issued Order 845 a couple of years in the past, builders of renewable era are nonetheless discovering the way it impacts them and might present larger flexibility and management for his or her tasks.
Issued in April 2018, Order 845 — amongst different issues — required transmission suppliers to revise their giant generator interconnection agreements (LGIA) to permit interconnection clients the choice to construct their very own interconnection amenities, together with the era tie-lines, substations on the level of interconnection, and transmission upgrades. Previously, interconnection clients have been restricted to utilizing options solely when the transmission supplier wouldn’t be capable to meet the proposed in-service dates.
In this landmark ruling, FERC acknowledged the uncertainty available in the market that earlier restrictions had created, impeding the expansion of renewable mills. This order might have acquired much less fanfare than both the manufacturing tax credit score (PTC) or funding tax credit score (ITC) and their subsequent extensions, nevertheless it has comparable impression. Transmission suppliers’ sources should not limitless. They are topic to the identical schedule constraints as the remainder of the market, and different system priorities can take priority generally over renewable generator tasks.
The speedy development of renewable era has already created some useful resource constraints for transmission suppliers. Order 845 helped alleviate a few of these issues whereas additionally positioning for the anticipated persevering with speedy enlargement of renewable era within the close to time period. The extensions of the PTC and ITC, by means of 2021 and 2023 respectively, would have exacerbated the challenges for transmission suppliers to satisfy the wants of renewable mills whereas concurrently sustaining the remainder of the transmission system.
The option-to-build characteristic launched options for renewable mills on the onset of their growth course of. The regulated monopoly of transmission suppliers stifles competitors and won’t return the least-cost choice to renewable mills. The capability to make use of certified third-party suppliers to design and construct interconnection amenities provides wholesome competitors into the market. This alternative to maximise worth, management value, receive schedule flexibility and drive challenge efficiencies makes the choice to construct an vital issue to contemplate in challenge growth.
Meeting Reliability Standards
It is vital to notice that Order 845 didn’t change the possession construction of the interconnection amenities. Should the renewable generator select the choice to construct, possession rights of the interconnection amenities nonetheless switch to the transmission supplier. Constructing these amenities to the reliability requirements of the transmission supplier can create logistical challenges if not addressed correctly. Reviews of drawings, performed by the transmission supplier, could be particularly cumbersome if the third-party provider isn’t ready and educated of the transmission supplier’s expectations.
Fortunately, most utilities have most well-liked engineering and building suppliers which are well-acquainted with their requirements. These third-party suppliers could be recognized by the transmission supplier or discovered on every of the regional transmission operators’ (RTO) web sites.
The recognized firms could have been topic to rigorous approvals for high quality, security and information, testifying to their for the renewable generator. Furthermore, onboarding a most well-liked third-party provider early within the growth course of can provide the renewable generator further insights into basic association necessities, substation footprint expectations, and rational value estimates for the challenge.
Optimizing Schedule and Budget
Another driver for choosing the choice to construct is enhancing schedule. Before the introduction of Order 845, renewable mills had the proper to search for third-party suppliers to finish the…