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Renewable energy developers are overloading California’s electric grid; State wants $250,000 up front for new power grid connections

Renewable energy developers are overloading California’s electric grid.

Now the state is fighting back. New generators will have to pay $250,000 up front to apply for new grid connections as part of the California Independent System Operator Corp.’s new plan to reduce delays in the project approval process and to weed out speculative projects.

“It was very easy to get projects into the queue and we had lot of non-viable projects drop out and get in the way of more viable projects,” said Dennis Peters, external affairs manager for the state ISO.

With state mandates requiring utilities to get 20 percent of their power from renewable sources by 2010, the state ISO is overwhelmed with requests from new arrivals like BrightSource Energy Corp.’s large-scale solar thermal plants. The state’s infrastructure cannot support these new requests to transmit newly generated electricity, which total 12 times the capacity renewable generators were requesting in January 2006.

The transmission issue is crucial to the state’s efforts to bring new renewable energy sources online. Transmission connection requests from new renewable power developers make up about 65 percent of all requests to the state ISO, which controls the electricity grid. Meanwhile, the federal investment tax credits, set to expire at the end of the year, also threaten the viability of any increased renewable power supply.

In response, the state ISO voted on a new approval process in July that still must pass federal regulators. The new plan allows the agency to look at clusters of proposed projects instead of one at a time, reducing the approval process from four or five years to just nine months. The new process would also thin the backlog of 361 requests for interconnection from utilities and generators piling up in the state. The fee increase will mean projects will be farther along when they apply for transmission connections, which will speed up approvals.

Requests come from traditional generators like natural gas-fired power plants and hydroelectric power plants, as well as renewable generators like wind turbines and solar and geothermal power plants.

Without the approvals to connect, new projects can’t move forward.

And if they don’t move forward, PG&E and other investor-owned utilities in California won’t be able to meet the renewable portfolio standards that require them to get 20 percent of the energy they deliver from renewable sources by 2010, and 30 percent by 2017.

“As a starting point, bringing new transmission lines to support renewable energy is vital to the success of PG&E and state meeting the renewable and greenhouse gas goals,” said Keely Wachs, spokesman for PG&E, adding that most of PG&E’s large projects won’t come online until 2011 or 2012. “2010 is an important number but we need to be looking beyond 2010.”

By Lindsay Riddell

Silicon Valley / San Jose Business Journal

18 July 2008