Duke and Solar Developers Reach Grid Agreement, Clearing Path for Hundreds of Megawatts

Duke Energy submitted a settlement with large solar developers
including Cypress Creek Renewables and Strata Solar to North
Carolina regulators on Thursday that aims to resolve longstanding
interconnection issues in the utility’s territory.

The agreement should resolve issues for more than one hundred
disputed projects�in the Carolinas, said spokesperson Randy
Wheeless, clearing the way for about 600 megawatts of solar
projects to move forward in coming years. The proposed changes will
need approval from regulators in both North and South Carolinas as
well as the Federal Energy Regulatory Commission.

Duke originally submitted its proposal to update interconnection
procedures in the two states in May. In recent years solar has
clogged Duke’s queue and the utility was unable to process
projects in a timely manner.

North Carolina is among the few states that have seen
significant solar development tied to the federal Public Utility
Regulatory Policies Act, which incentivizes energy production by
requiring utilities to buy from “qualifying facilitiesâ€
developed by third parties. From 2014 to the end of March 2020,
third-party installers had added 2.4 gigawatts of new large-scale
solar capacity in Duke territory, with many installations around 5
megawatts in size. Utilities often view PURPA as a challenge
because they’re required to buy power, while it’s become an
essential tool for developers in some states.

“The contentiousness of PURPA has been a sore spot for
utilities and developers for a long time,†said Colin Smith, a
senior solar analyst at Wood Mackenzie. “They ultimately have to
come to some sort of middle ground.â€

Duke had nearly 5 gigawatts of solar capacity in its
interconnection queue in 2019, according to a May filing with
regulators. The utility believes approximately 1.5 gigawatts of
that total is the most likely to move forward, according to
spokesperson Randy Wheeless. To get those projects tied to the
grid, the utility will submit hundreds of megawatts of projects to
a “cluster study†where their potential grid impacts will be
studied simultaneously rather than one-by-one, with hopes that will
speed up the process.

Unlike the cluster study National Grid undertook recently in
Massachusetts to assess distributed solar projects, the Duke
agreement won support from several of the region’s largest
developers. California also uses clusters to assess some
interconnection requests.

“It took a lot of hard work, creativity and good faith,â€
said Steve Levitas, a senior vice president at North
Carolina-headquartered Pine Gate Renewables, on a statement about
reaching the deal.

Strata Solar and Cypress Creek Renewables, the two leading
developers in the state according to data from Wood Mackenzie, did
not respond to request for comment on the deal. Both signed the
agreement filed with regulators. Duke asked commissioners to
respond to the request by October 15. 

The settlement comes soon after a
FERC ruling
on PURPA that is expected to give utilities more
control over rates paid to qualifying facilities, a decision that
is likely to make the law less valuable for developers and perhaps
limit its use.

In September, Duke
its most recent Integrated Resource Plan with regulators.
It included six potential pathways to the utility’s pledged goal
of net-zero carbon by mid-century, but all of the scenarios include
more renewables. Solar additions could range from about 8.7
gigawatts by 2035 up to 16.4 gigawatts by that year if the utility
adds no new gas generation.

The recent IRP plus this agreement with developers are “fairly
significant†for solar in the Carolinas when taken together, said
Smith, indicating developers and the utility are open to working
together to achieve renewables goals.

Source: FS – GreenTech Media
Duke and Solar Developers Reach Grid Agreement, Clearing
Path for Hundreds of Megawatts