System Upgrades in Generator Interconnection

Determination, exploration, and cost

Development and system upgrades

New generation projects are studied prior to interconnection onto the grid to evaluate and understand their potential to adversely impact the reliability of the transmission system. When a project causes an adverse impact (i.e., reliability criteria violation), the utility or ISO that performed the analysis determines upgrades to the system that would ensure system reliability is maintained, the project’s relative role in causing the violation, and assigning appropriate costs accordingly.

The relative influence a project has on the grid can be thought of as an interrelation of three factors: project location (i.e., the point of interconnection or POI), size (in MW), and timing of entrance into the interconnection queue, which can impact when and to what extent violations can occur in relation to other generation projects or future transmission build-out. Similarly, these factors impact the associated costs to developers for bringing projects on-line, including whether or not a particular violation exists for one project versus another and whether or not they are assigned any associated system upgrade costs. Costs of upgrades for interconnection can be significant, and are often considered a primary determining factor of project success.

System upgrade types and selection

Naturally, system upgrades assigned to projects tend to correspond to mitigations for particular criteria violations. Three criteria categories include line and transformer thermal violations, substation voltage violations, and system collapse violations, which manifest as power flow simulation non-convergence:

• Thermal criteria violations on transmission lines or transformers prompt mitigations that include line reconductoring, line rebuilds, transformer replacement, and the addition of new transmission outlets.

• Voltage criteria violations at substations (i.e., buses) are often mitigated most directly via shunt-connected compensation. Examples include shunt reactors, shunt capacitors, and SVCs.

• Non-convergence/system collapse mitigation most often consists of the addition of new transmission lines, but shunt compensation has a role here as well.

System upgrade selection in interconnection is often performed manually, and it coincides with the ISO or utility’s analysis of the project. It is not always straightforward to determine appropriate mitigations for violations, because their selection may be dependent or subject to transmission owner approval, and it is also possible that an optimally identified upgrade or set of upgrades could influence or mitigate a range of violations, among other factors.

Upgrade cost allocation and estimation

Generally, many utility and ISO system upgrade cost allocation practices are similar, but also follow individual guidelines. While we will not go into details of every ISO or utility’s cost allocation practices (which can be learned about via their interconnection process manuals), we will attempt to give a broad overview of the approach followed for assigning and estimating costs of upgrades.

A project’s relative influence on a facility violation is tyipcally determined via distribution factors, a DC power flow-based calculation, for flow-related violations. These factors ultimately comprise a percentage-based mechanism to understand how a project’s addition into the grid affects other facilities, such as those that might experience a violation with its addition onto the network. Distribution factors might be used to determine a power injection’s influence from a discrete node in the grid onto a transmission line or other node, for example. Subsequently, the upgrades assigned to mitigate a particular violation utilize those percentages accordingly for appropriating costs. Determining relative influence from a project on a voltage violation is more complicated and won’t be covered here in detail.

While later phases of project development and interconnection study processes will define final construction and equipment cost, it is possible to approximate costs via cost estimation data. MISO’s Transmission Cost Estimation Guide (TCEG) has useful data for this purpose, and this resource’s exploratory cost data can be helpful for a first-pass of cost estimation for interconnection-related upgrades in a variety of markets (note this is for MTEP22, and cost data is most pertinent within MISO).

Below are examples of how one might use this guide to estimate the cost of various upgrades – assume a relevant cost allocation percentage of 10%, calculated from a project’s relative influence, is associated with the project for each example:

• Thermal violation mitigation

  • A 20-mile, single-circuit, 230 kV transmission line is slated for a re-build:

    • Total cost: $1.7MM/mi * 20 mi = $34MM

    • Assigned cost: 10% * $34MM = $3.4MM

    • See page 39 of TCEG

• Voltage violation mitigation

  • A new 20 MVAR capacitor bank is needed at a 115 kV bus:

    • Total cost: $10769/MVAR * 20 MVAR = $215380

    • Assigned cost: 10% * $215380 = $21538

    • See page 27 of TCEG

• Non-convergence mitigation

  • A new 50-mile, single-circuit, 345 kV transmission line is needed in Illinois to mitigate collapse:

    • Total cost: $3.2MM/mi * 50 mi = $160MM

    • Assigned cost: 10% * $160MM = $16MM

    • See page 38 of TCEG

Alternative mitigation exploration

While ISOs or utilities might identify system upgrades that resolve a particular violation, the manual nature of mitigation identification lends itself to not always finding a solution that is physically (or financially) optimal to resolve a single or set of violations. For example, if a relatively small shunt-connected device could resolve several instances of simulation non-convergence, it could be a much more cost-effective solution as compared to a new transmission line. Diagnosing and determining root-causes of non-convergence in power flow simulations is often a manual and subjective process. Pearl Street’s SUGAR™ software can help explore mitigation options in a data-driven and optimal way, and can be used to identify cheaper alternatives that could be eligible for consideration compared to more expensive mitigation options.

Takeaways

• System upgrades for interconnection and their associated costs play a significant role in the viability of new generation projects

• Upgrades are determined manually during the interconnection study process, and are motivated by thermal, voltage, and system collapse criteria violations

• Cost allocation of upgrades leverages distribution factors, a DC power flow-determined metric

Questions?

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