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How to Connect Solar Projects to Distribution Grids in Alberta

How to Connect Solar Projects to Distribution Grids in Alberta

 

How to Join Your Solar Project to the Alberta Grid

 

Grid Connection Defines the Project

 

For most renewable energy projects, the grid connection is the most significant and uncertain factor in terms of the budget and schedule. In Alberta, with its decentralized and complex electricity market, the grid ultimately determines the renewable project’s financial model and its bankability.  

 

It is critical to understand early in the project’s life (a) how the transmission and distribution grids work; and (b) how and where the project could be connected cheaper and faster than any of its competition. These discussions need to take place well before the project team undertakes any land acquisition, siting, stakeholder engagement or financing work. All renewable project developers must be prepared to compete for valuable connection opportunities and move the connection process as fast as possible. 

 

In this blog, we focus on solar generation connecting at the distribution level because due to its larger capacity wind usually requires robust transmission solutions. This blog explains how distribution systems work and what connection streams are available to different categories of solar projects in Alberta. 

 

 

Transmission v. Distribution Systems

 

Alberta’s grid consists of transmission and distribution (above and below 25 kV, respectively) systems which are planned and operated by the system operator (AESO) and transmission/distribution facilities owners. 

 

Alberta’s distribution systems are owned and operated by FortisAlberta (rural south), ATCO Electric (rural north), ENMAX (Calgary), EPCOR (Edmonton), Cities of Lethbridge and Medicine Hat, and Rural Electrification Associations (REAs). Each wire service provider has its own designated service area, connection process and requirements. 

 

Solar projects under 20-25 MW can be connected on the distribution side, if there is a sufficient hosting capacity at the local substation and on the feeders in the project area (for instance, see the interactive hosting capacity map of FortisAlberta). If the existing hosting capacity is insufficient, the wire service provider is required to work with the TFO to obtain transmission system enhancements and upgrades (that will likely drive up the cost and result in delays to the solar project’s schedule). 

 

Typically, the distribution interconnection facilities are cheaper and the connection process is less cumbersome and more expedient than that of the system operator responsible for transmission interconnections.  As a result, the distribution connection space has tightened up and it is expected to remain competitive going forward.  Accordingly, the project’s access to granular distribution-level information and its ability to effectively work with the wire service providers around their requirements is key to the successful grid connection.

 

 

Exclusive Right to Supply Power

 

In Alberta, wire service providers have the exclusive right to distribute power within their service areas. In practical terms, it means that the solar project can either self-supply (i.e. consume the electricity it produces) or provide power to the grid.  There is no option to supply electricity directly to a third-party consumer, such as a landfill, feedlot or another commercial operation, to allow them to go off the grid. Although these parties may enter into a Power Purchase Agreement (PPA) with the solar project owner and operator, they still need to be tied to the distribution grid and pay all applicable charges under the distribution tariffs, which is the largest part of any electricity bill, whether commercial or residential.  

 

There are some exemptions to this statutory monopoly of wire service providers, which may be granted by the Alberta Utilities Commission (AUC) in a limited set of circumstances, but it is unlikely that any of them would apply to a distribution connected solar project. We note here that all wire service providers take this statutory exclusivity to supply power in their service areas seriously and will defend it vigorously in the face of any threat to their province-wide monopoly. 

 

 

Distribution Connection Options

 

There are two ways to connect to the distribution grid in Alberta: (1) as a regular distribution connected or DCG project; or (2) through a special program where the wire service provider needs to pre-qualify the project and confirm that it is eligible under the Regulations (Microgeneration, Community Generation and, the most recent addition, the Small Scale Generation).

 

A regular distribution-connected project may use renewable or non-renewable resources and can be connected up to the capacity limit specified by the wire service provider for the specific distribution infrastructure. Such projects have to run through a preliminary and detailed assessment by the wire service provider, which may take anywhere between three and six months, depending on the complexity of the project and its technical needs, and whether the transmission company needs to be involved (it may be), etc. All power plants above 1MW require an approval from the AUC.

 

The special connection programs are specifically designated under the Regulations to help renewable projects connecting on the distribution side (a) obtain some or all of the connection facilities at no charge; (b) self-supply power; (c) connect faster than other distribution projects; (d) connect without an AUC application; and (d) have the Balancing Pool trade energy on their behalf. 

 

 

Special Distribution Connection Programs

 

There are three distinct connection streams for renewable projects, including solar, on the distribution side. 

We are providing our Coles notes on each of these programs, including their pros and cons, below.

 

 

Microgeneration 

 

 


As of December 2020, there are 6,274 microgen solar sites in Alberta, with a total capacity of 89 MW. In contrast, there are only 2 distribution connected solar sites, with a total capacity of 5.6 MW.

 

 

Community Generation

 

 


The AUC recently approved a number of Community Generation projects involving municipalities, not-for-profits and indigenous partners – there are different ways to structure these arrangements and the Commission allows some flexibility to the parties on the commercial end to help launch meaningful and efficient community partnerships.

 

 

Small Scale Generation

 

 

 

Most Appropriate Connection Stream

 

As discussed above, Microgeneration would work in a well-supported self-supply scenario (wire service providers review and verify the existing and planned load carefully and will reject any attempts to misuse the microgeneration program).  

 

At the same time, Community Generation requires a reliable partner which may or may not be available to the project developer at the early stages when the connection application is being filed with the wire service provider. 

 

Finally, the Small Scale Generation program is still fairly new and it remains to be seen how the wire service providers across the Province and the AUC interpret its eligibility requirements, including the “available hosting capacity” criteria in their service area, and whether it would work as intended and provide a fast track connection solution for solar generation in Alberta.