Canada

Canada

Access blocked to distribution net -- Standard offer log jam in Ontario

Developers looking for a contract under Ontario's program of standard offer purchase prices for power generated by small wind stations connected to the grid at the level of the distribution network are running headlong into concerns over just how much generation the province's power system can handle at that level.

Hydro One Networks, which operates Ontario's transmission grid and a large part of its distribution system, has decided it will allow projects to connect to only one of the two transformers that are typically found in distribution substations in the province -- and then only to an upper limit of 60% of the transformer's rated capacity. "The distribution system we have in North America is generally weak and radial, particularly in the rural areas that Hydro One serves, and that is where the renewables are in Ontario," the utility's Mark Graham told delegates to the Canadian Wind Energy Association's (CanWEA) recent annual conference.

"It would be wonderful if we could just connect all of the wind farms that are proposed out there. Everyone would be happy, except the rest of our customers. We need to worry about safety and reliability on the system. We need to ensure the system can deal with the aggregate generation. One off, these projects are not a big deal. However, when you put them together they are." Specifically, Hydro One is concerned about the risk of backfeeding power onto the transmission system and whether the transformers, many of which are 40 years old and have never run at their rated capacity, will be able to handle the new demands being placed on them.

In a black bo

xBut wind power and other renewable energy developers are wondering if the limits are really justified, says David Timm, CanWEA's Ontario policy director. "This is significantly limiting the amount of generation that could potentially go into the system. We've tried to get some clarification on the technical rationale for the limits. Should it be 60%, should it be 100%, should it be 20%? We're kind of working in a black box."

Hydro One has a series of studies underway to try and get a handle on exactly what the potential problems are and at what point they could occur, says Graham. "Essentially what we are doing here, despite the fact that people have a lot of concern with it, is we're taking some risk with respect to Hydro One's ability to actually manage this, thinking that we will catch up to this before we encounter these problems," he says.

"We have studies now that show that the 60% transformer loading limit is actually going to be too high with respect to low load periods. So how are we going to deal with that? We are going to have to figure it out."

Interest in the standard offer program, which only started awarding its fixed price contracts in January, has been strong. By the end of September, says Graham, Hydro One had heard from developers interested in connecting more than 1200 standard offer projects, which must not be bigger than 10 MW rated capacity. Of those, 481 have formally requested connection impact assessments, but only 251 fall within the limits set by the utility. Still, Graham points out, those 251 projects represent 2073 MW of capacity. "So there is still a lot despite the fact that people have difficulty with us establishing those thresholds."

Not designed for it

But Timm argues the province should be finding ways to maximise renewable energy connections. "If there are projects and there is a need for supply and there are renewable energy targets in the province, we should connect as much as possible," he says.

The question of how to do that, he says, goes beyond the issue of how much generation the current system can handle. Right now, Timm points out, Hydro One has no mandate to upgrade its facilities to accept more standard offer projects. Even if it did, there is still the issue of how those costs would be recovered. The current distribution system code requires that developers pay for any reinforcements needed to connect their projects even when those upgrades benefit all consumers, a policy CanWEA would like to see changed.

"Ultimately this comes down to the fact that the distribution system in Ontario was never designed to accept all of the generation that is now being proposed," Timm says.

"You could review the 60% rule and say it should be 80%, but that is really a band-aid solution, or an interim solution along the way. There is a root issue," he continues. "If we are going to have programs that connect to distribution, how does the distribution system accept it? There should be mechanisms to develop upgrades. It is a very different perspective on distribution than Ontario has ever had."

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