A dispute with Minnesota’s largest utility over a technical standard could delay several of community solar projects in the state.
Developers say the issue of “flicker,” or power fluctuation, has been a chief roadblock in getting projects off the ground. Those who have brought cases before Minnesota regulators include Sunshare, GreenMark Enterprises, LLC and Sunrise Energy Ventures.
Other solar companies have expressed concern and are likely to have their projects subjected to a second study by Xcel Energy.
It’s a complex issue involving how power being created by solar farms will impact the grid when clouds roll over and voltage sags, or increases as the sun appears. That kind of fluctuation could degrade electrical distribution services in areas near community solar.
Initially Xcel employed a flicker standard of 1.5 percent, basing that on research developed in the utility industry in the 1920s.
Xcel has agreed to restudy as many as 37 community gardens potentially impacted by flicker at a 2 percent threshold, according to Lee Gabler, who oversees the program for the utility.
The utility is restudying 16 projects that will generate 71 MW and will have results by the end of 2016. Another 13 projects with 61 MW could be restudied but currently have a dispute with Xcel that is being examined by a third party arbiter known as the “independent engineer.”
Another eight projects with 33 MW could have to be restudied based on the outcome of the independent engineer’s report.
The reason for the large number is due to the impact one project may have on another proposed garden using the same interconnection hub, Gabler said.
Some developments further back in the queue may have to be reconsidered due to issues that arise from projects in front of them in line, he said. Generally projects with signed interconnection agreements are moving forward and will not be restudied, Gabler noted
Although many community solar companies have concerns over the flicker debate they understand Xcel’s mandate to maintain a reliable grid for their customers and the region as a whole.
Martin Morud, founder and owner of TruNorth Solar, said Xcel “has a right to design and maintain its infrastructure to keep it reliable and safe.”
While TruNorth is building solar gardens it has a diverse group of clients that includes schools and community centers who want rooftop solar. The flicker problem mainly centers on community solar, and that’s just part of his business, he said.
Though he’s sympathetic to companies hurt by flicker, Morud believes improved energy storage and electricity management tools may eventually help the situation in the future.
Jamie Borell, chief operating officer for Innovative Power Systems, has community gardens going live this year in part because they had no flicker issues. But two community solar installations collectively producing 5 MW each may not get built – or see a reduction in size – due to problems with flicker, he said.
“Flicker is an issue that is going to cost us,” he said. “We will likely end up losing multi-megawatts because of (flicker). If it were studied under a more realistic set of requirements we feel they (the projects) would get built.”
The flicker problem “came out of the blue,” he said. Xcel has legitimate concerns over fluctuations, Borell said, but he believes that by the time a higher threshold is allowed next year plenty of larger projects will have died while waiting for the change.
The developers’ argument
The flicker debate is wonkish and technical in many ways. The arguments include standards developed by Institute of Electronics and Electrical Engineers (IEEE) involving flicker, how to measure cloud cover, and how regulators should apply rules.
There’s little evidence, they say, that shows flicker has been an issue anywhere in the solar industry. They argue that Xcel’s study of solar gardens features an approach that shows clouds reducing panel production to zero, a situation which they say does not accord with reality.
Moreover, the “tariff,” or rules created by regulators for community solar gardens set the flicker rate at 4 percent, say developers.
They also contend that in nearly every dispute over flicker and associated issues state regulators have continually sided with Xcel.
GreenMark Enterprise LLC’s Mark Andrews said the flicker issue has been used “to unfairly kill solar projects” even though “the overwhelming technical evidence suggests it’s a non-issue.”
At least two GreenMark projects could be in trouble due to flicker issues. The flicker issue “is subterfuge intended to kill solar projects and it needs to be addressed,” Andrew said.
His colleague, GreenMark chief executive officer Julie Jorgensen, added that Xcel is using flicker to “throttle” community solar development.
The technical considerations Xcel has employed do not replicate real world situations, Jorgensen said. The independent engineers that have studied flicker have usually sided with developers in the debate and suggested a higher threshold based on new IEEE standards would be preferable, she said.
In general, when the engineer sides with a developer Xcel appeals the findings, Jorgensen said. The delays caused by appeals are hurting developers. “These projects are dying while everyone waits,” she said.
Sunrise Energy Ventures has several community solar projects awaiting approval. Dean Leischow, chief executive officer, said he has decided not to build anything this year mainly due to dispute over flicker standards.
Depending on the results of the restudy by Xcel, Sunrise may have to invest an additional $3.5 million “in unnecessary system upgrades” to improve power lines and equipment, he said.
Leischow warns he will likely drop two other projects because they will become uneconomical. Even a two percent threshold might be problematic, he added, and may result in projects being decreased in size.
Xcel’s agreement to restudy projects at a two percent threshold will make it the de facto standard in the future for both individual 1 MW gardens and co-located multi megawatt gardens.
Flicker problems arise as a result of difficult sites, Gabler said, such as a location far from an interconnection site. Xcel offers several technical approaches to mitigate the issue, he said, to allow developers to reduce the fluctuation challenge.
Xcel’s Patrick Patrick Dalton said he had studied thresholds of other Minnesota-based utilities and other large power providers around the country, as well as trade groups. “The numbers we heard are in the ballpark of what our practice has been,” he said.
Among those that employ similar fluctuation standards are other Minnesota utilities and Toronto-based Hydro One, Dalton said. The Edison Electric Institute, a major trade group, also calls the 1.5 percent standard acceptable.
In a filing before the Minnesota regulators Xcel pointed to problems Duke Energy suffered in North Carolina with distributed generation outposts of two to five MW, roughly the size of many community solar gardens, as another reason for concern.
Despite the dustup this year at least 27 projects could still be installed, Gabler said, and 2017 should be a banner year.
“These are complicated projects and there’s so many things that go into them – financing permitting, schedules changing, availability of resources to build, all of that,” Gabler said. “It’s not a question of if these will be built, it’s a question of when.”
The commission has a broader interconnection case underway that should add clarity for developers in the future, Gabler said. Despite the debate over flicker, he believes that Minnesota will still see more than 400 MW of community solar by the end of next year, which will likely make it the largest such program in the country.
That hardly assuages developers stuck in the flicker bind. All these challenges leave Andrew to suggest the community solar program is a “shadow of the promise it offered when the program opened up.”
And even though Leischow believes Sunrise will have 45 MW of installations by the end of next year the problems of developing in the state leave him beleaguered.
“Minnesota is kind of being put into the ‘too hard’ basket and developers are going to say ‘I want no more of this and I wish I never started in the first place,’” he said. “But they’re saying ‘I’ve come in and I have to finish it.’ That’s where we are right now.”