Integrating Distributed Solar into Centralized Utility Models

by Jonathan Flinn

Utilities are successfully integrating solar power at high penetrations both at the transmission and distribution levels. Photo courtesy: Shutterstock

As the solar photovoltaic (PV) industry continues to expand and deliver increased output at lower costs, more and more utilities are addressing the impacts caused by the integration of these generators into their transmission and distribution systems. A number of technical challenges arise as penetrations of solar power increase, but these challenges promise rewards of increased efficiency, reliability, and capital cost deferrals-particularly due to the proliferation of generation on the distribution system.

New technologies, processes, and analytical methods are being developed to address these challenges and harness the opportunities presented. This is particularly the case in island states and nations where the high cost of conventional generation has accelerated the advance of distributed solar power, resulting in high penetrations of those technologies. The impacts on system operation are also enhanced on islands due to the smaller size of the electrical systems and the lack of interconnections which are available on larger mainland grids. There are many potential benefits of distributed PV generation, but new technology must be developed to harness these benefits and reduce negative impacts. Utilities must also make changes to their planning and operational approaches to successfully integrate solar power on their systems.

State of Integration

In June 2014, distributed solar power on the Oahu, Hawaii grid provided over 200 MW of capacity out of a total system load of 1,100 MW, which amounts to distributed generation providing 18 percent of the power capacity to the whole system. Solar PV generation tends to be clustered in certain areas. Because of this, there are parts of the distribution system that have had more than 100 percent of their load served by distributed PV.

The California Independent System Operator (CAISO) displays current demand and renewables output on its website. Currently in California, solar power accounts for 4,200 MW out of approximately 26,000 MW of power, which amounts to solar PV supplying 16 percent of the total system generation capacity. As with Hawaii, this value is higher in certain parts of the distribution system, and some distribution feeders already have installed PV capacity greater than their peak load.

At the other end of the scale, the New York Independent System Operator (NYISO) has less than 265 MW of solar generation installed out of a total demand of 16,129 MW, which amounts to only a 1.6 percent capacity penetration.

These examples show systems at different stages of solar power integration, but all three states are heading in a similar direction. The Hawaiian Electric Companies (HECO) have a stated goal of obtaining 65 percent of their energy from renewable resources by 2030, which includes tripling the amount of distributed solar power. Additionally, the state of Hawaii has targeted 100-percent renewable power by 2045. California’s Renewable Portfolio Standard (RPS) mandates that 50 percent of the state’s energy be sourced from renewables by the end of 2030. Likewise, New York has a goal of obtaining 50 percent of its energy from renewable energy sources by 2030.

While the issues faced by utilities due to this expansion of renewables will be similar, some utilities are facing the challenges already. These challenges have stimulated the development of new technologies and new planning and analysis methodologies, the lessons of which will benefit other areas as renewable energy capacities increase.

Benefits of Distributed PV

The integration of large amounts of distributed PV presents several challenges to the utility. However, by using proactive and constructive approaches to this technology, utilities can enhance the reliability, efficiency, resilience, and independence of their systems to the benefit of all customers. New technologies are also contributing to the positive impact of distributed generation technologies, and this spirit of innovation is behind the most significant overhaul of the U.S. electrical system in generations.

One of the primary benefits of increasing the amount of PV generation on the grid is the corresponding reduction in conventional, fossil-fuel based generation. The associated reduction in greenhouse gases and pollutants is the main driver of legislative support for renewable generation. There is also a potential benefit for customers in the form of lower energy costs. This reduction in cost has three components:

A reduction in the generation fleet maintained by the utility: With large enough capacities of reliable renewable generation, the utility can work to decommission older conventional units. This equation is complicated by the variability of renewables, which requires a certain amount of backup from dispatchable energy sources, but this problem can be mitigated by combinations with other new technologies.

Insulation from fuel price volatility: While the price of natural gas is currently at its lowest in many years, this is unlikely to remain the case for long. The price of natural gas can increase quickly, resulting in an increase in energy prices. Meanwhile, the cost of solar generation is on a continuous downward trend, providing stability for utilities and customers alike.

Reduced energy losses: A portion of the energy generated by centralized power plants is lost in the transmission of energy from remote generation centers to the areas where the load is used. This dislocation of generation and load represents a major inefficiency in the electrical system. The deployment of large amounts of PV generation, particularly at the distribution system level, can reduce or remove these losses by minimizing the distance between the generation of electricity and its end usage. This reduces the total amount of electricity generation that is required to serve the load on a system.

The placement of generation on the distribution system can also reduce voltage drops along a circuit. Voltage drops vary with the power flowing along a circuit. With more PV generation installed on the circuit, the power flow may reduce, which results in a flatter voltage profile along the circuit. This is important because longer distribution circuits will often have line drop compensation systems such as capacitor banks and line regulators installed to maintain an acceptable voltage level for customers. If distributed generation is in place, utilities may be able to reduce or defer expenditures on this compensation equipment.

Distributed PV can help with system recovery following an outage. Whereas conventional generators may take several minutes to start up and serve a load, PV generation can start up immediately upon request by a utility, provided there is sufficient irradiance. The PV can then contribute to a base load, taking some of the strain off the utility generation fleet.

Another major potential benefit of distributed PV is the possibility of microgrids. Microgrids are self-contained sections of the grid with sufficient generation and regulation capacity to serve their own loads. Microgrids have several advantages. In addition to the improved efficiency and insulation from price volatility described above, microgrids also offer improved resilience. In the event of a large-scale outage caused by a cyberattack or extreme weather event, microgrids can isolate themselves from the rest of the system and continue to serve their own load. This maintains reliability for customers on the microgrid, allowing the system operator to focus on returning power to areas without their own power supplies.

Application of New Technologies

For all of the benefits described above, the integration of PV systems does present some technical challenges that utilities and system operators must overcome. While there are existing technologies that can be used to mitigate these problems, new technologies are also being developed and standardized with the focus of improving the operation of the modern, de-centralized grid.

One of the most significant new technologies being discussed for the North American market is the implementation of grid-friendly features in PV inverters. Often referred to as “smart inverters”, these devices offer a range of features designed to improve efficiency, power quality, safety, and reliability on the grid. The range of features includes Volt/VAR Optimization (VVO), which can be used to reduce problems due to high or low voltage on the distribution system, particularly where generation exceeds load or intermittent output causes voltage problems before existing voltage regulation systems can react. VVO can also be used to regulate voltage downstream of a substation, which can result in improved power quality for all customers.

Another smart inverter function may allow a system operator to implement different voltage and frequency ride-through capabilities, which may improve system reliability when a disturbance is experienced. This avenue of communication with the system operator can also provide the utility with the ability to implement remote curtailment of the generator. A signal can be sent to the inverter to limit output or de-energize completely, which can be used in an emergency to prevent unsafe operational scenarios from developing.

The potential for communicating with and controlling the inverter is inherent in another new technology being developed, which will allow a system operator to visualize and control large numbers of distributed generation assets even at the edges of its distribution system. In order to make this more manageable, groups of generators and energy storage systems are aggregated, providing a single communication node with the utility for the group. This reduces the problems of attempting to visualize and control the huge number of small generation facilities on the distribution system, because the utility will be able to interact with a manageable number of distributed generation resources rather than attempting to control each generator individually. Visualization of distributed generation for the utility is also an important step. Up to now, most utilities have only been able to see distributed generators based on their effect on net daytime load. Independent monitoring of generation is operationally important to the dispatch of sufficient spinning reserve, and for planning purposes.

Co-location and integration of PV systems and energy storage systems are other important areas of innovation. Energy storage has the potential to reduce or remove several of the problems posed by distributed PV:

  • Storage can be used to prevent reverse power flow from occurring, removing the possibility of high voltage violations, thermal overloads, or incorrect regulator operations;
  • Storage can be used to store excess generation during the day and discharge this energy later, preventing the peak load and demand ramping which occurs toward the end of the working day when PV production drops off and customer demand increases as the working population returns home;
  • Storage can prevent variability problems by providing a constant, smooth supply of power to the grid, flattening any peaks and troughs in the output from the PV system.

Co-location of PV and energy storage is also an important component for the development of microgrids. Additionally, combinations of energy storage, distributed PV, and demand response schemes can be important in small islands with high penetrations of PV generation. In these cases, a potential problem occurs if there is a low frequency event (such as the loss of a large generator). This can result in either tripping of the PV on the under-frequency relays, which exacerbates the problem, or deployment of load-shedding schemes which are compromised as they also result in shedding of PV generation. By including energy storage on the system, this can be used as reserve generation, ramping up output immediately when frequency drops.

In Hawaii, HECO has adjusted its market rate approach based on the large amounts of installed solar; solar can now be either installed and generate into the grid and be paid at a lower rate than the “net” rate, or systems can be installed that do not feed back into the grid, incentivizing the adoption of storage systems to harness the benefits described above.

New Approaches to Planning

The rate and scale of the adoption of PV generation technologies, particularly in island communities such as Hawaii, has necessitated the development of new approaches to distribution system planning. Proactive planning is not only becoming mandatory now, but utilities are updating analysis on a bi-weekly or monthly basis rather than the traditional annual or quarterly cycles.

Due to the speed with which new solar systems can be deployed, utility planning needs to be more proactive than ever to keep up with the demand for interconnection permission. An initial response to this demand in some cases was to impose a “rule of thumb” threshold on the capacity of PV systems below which the systems would be fast-tracked for interconnection. Generally, the fast-tracking of applications means they are approved for installation without a detailed review. This does not cause problems at low penetrations, but once there are several hundred small PV systems on a single distribution circuit, there are real challenges for the system operator to contend with that may not have been identified if all of those systems had been fast-tracked.

Distributed PV systems can cause issues due to the voltage profile between the distribution transformer and the customer. Traditionally, utilities were able to assume that power flowed radially from the utility to the customer, meaning there would only be a voltage drop between the utility’s distribution transformer and the customer’s location. However, if the customer has sufficient PV generation to exceed their load, there can be a voltage rise along this section of the circuit, meaning that the unidirectional power flow assumption is no longer valid. This requires utilities to be able to analyze the effect of multiple existing, planned, and future PV installations all the way to the customer, rather than bounding the analysis at the distribution transformer as has traditionally been done. Utilities are developing new methodologies and extended models to deal with this scenario.

HECO has developed and implemented a proactive process for integrating distributed solar power. In this process, high penetration PV studies are performed on each one of their distribution feeders periodically. Hypothetical future PV installations are placed on the feeder, and analysis is performed to identify any technical violations that might be caused by the PV. This provides three major benefits to the utility:

  1. The utility can identify penetration levels at which problems will begin to occur, and can use this to set the screening limit above which more detailed reviews are required, rather than the more conservative “rules of thumb” mentioned above;
  2. The utility can use the results to plan mitigation measures in a more proactive manner, which can result in less delay in approvals as upgrades are planned and implemented early. This also results in more efficient solutions as the utility can find the solution that addresses the ultimate scenario rather than reacting only to current problems;
  3. The utility can use the analysis to identify areas where installation of distributed PV systems would be immediately beneficial to the system, and it can then incentivize PV installations at these locations.

At the other end of the system, distributed generation now has the potential to impact the operation of the utility transmission and distribution system as a whole. In transmission analysis, the distribution system has traditionally been included as a series of aggregated loads located at substations. As distributed generation first started to appear, it was included only as negative load because its impact on system dynamics was negligible. Now, however, distributed generation may be installed in sufficient capacities to have a significant effect on the dynamic operation of the system. This requires a more integrated analysis of the transmission and distribution systems as a single model, so that the impact of each on the other can be adequately addressed. This is exemplified by a case in California in which large amounts of PV displaced conventional generation, resulting in that state’s well-known “duck curve”. This can reduce the available reserve margin if the utility is not cognizant of the actual load on the system. In case an unexpected generator outage occurs, the utility must be aware of what its gross load is and plan accordingly should PV systems trip during the disturbance. This must be considered when designing generator dispatch logic, planning for available reserve, and designing load shedding schemes.

A final example of new planning approaches can be seen in the case of unintentional and intentional islanding (such as microgrids). Dynamic analysis of the distribution system has traditionally been unnecessary in many cases. However, as the penetration of distributed generation increases, so does the potential for unintended islanding. It may be necessary in some cases for the utility to perform dynamic studies of distribution circuits to determine if the combined operation of multiple inverters can prevent anti-islanding functions from functioning reliably.


Interconnection of PV generation on the utility distribution system continues to rapidly increase. While the proliferation of distributed generation is not without challenges for the utilities, there are potential benefits to be realized in improved efficiency, reliability, resilience, and customer independence. Harnessing this potential requires development not only of new communication, visualization, control, and operational technologies, but also development of utility planning practices to address an increased rate of change in the system. By continuing to develop these resources, the future of the transmission and distribution system is brighter for all.


Jonathan Flinn is a senior engineer in the Power System Planning team at DNV GL.


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