Small Wind Guidebook/Can I Connect My System to the Utility Grid

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Can I Connect My System to the Utility Grid?

Small wind energy systems can be connected to the electricity distribution system and are called grid-connected systems. A grid-connected wind turbine can reduce your consumption of utility-supplied electricity for lighting, appliances, and electric heat. If the turbine cannot deliver the amount of energy you need, the utility makes up the difference. When the wind system produces more electricity than the household requires, the excess is sent or sold to the utility. These arrangements with the utility company are typically called net metering or net billing, and they address the value of the electricity sold or net excess generation, the time period for valuing the electricity (typically annually or monthly), and any other contractual requirements with the utility.

Grid-connected systems can be practical if the following conditions exist:

  • You live in an area with average annual wind speed of at least 10 mph (4.5 m/s).
  • Utility-supplied electricity is expensive in your area (about 10 to 15 cents per kilowatt-hour).
  • The utility’s requirements for connecting your system to its grid are not prohibitively expensive.
  • There are good incentives for the sale of excess electricity, sale of the renewable energy credit, and/or for the purchase of wind turbines.
A grid-connected wind turbine can reduce your consumption of utility-supplied electricity.

Federal regulations (the Public Utility Regulatory Policies Act of 1978, or PURPA) require utilities to connect with and purchase power from small wind energy systems. However, you should contact your utility before purchasing a wind turbine system and connecting to their distribution lines to address any power quality and safety concerns. Your utility can provide you with a list of requirements for connecting your system to the grid. The American Wind Energy Association (AWEA) is another good source for information on utility interconnection requirements. AWEA contributed much of the following information.

Net Metering

Southwest Windpower's 1.8-kW Skystream wind turbine in a residential application. NREL/PIX 14936

The concept of net metering programs is to allow the electric meters of customers with generating facilities to turn backwards when their generators are producing more energy than the customers’ demand.[1] Net metering allows customers to use their generation to offset their consumption over the entire billing period, not just instantaneously. This offset would enable customers with generating facilities to receive retail prices for more of the electricity they generate.[2]

Net metering varies by state and by utility company, depending on whether net metering was legislated or directed by the Public Utility Commission. Net metering programs specify a way to handle the net excess generation (NEG) in terms of payment for electricity and/or length of time allowed for NEG credit. If the net metering requirements define NEG on a monthly basis, consumers can only receive credit for their excess that month. But if the net metering rules allow for annual NEG, the NEG credit can be carried for up to a year. Most of North America sees more wind in the winter than in the summer. For people using wind energy to displace a large load in the summer (like air conditioning or irrigation water pumping), having an annual NEG credit allows them to produce NEG in the winter and receive credits in the summer.[3]

Safety Requirements

Whether or not your wind turbine is connected to the utility grid, the installation and operation of the wind turbine is probably subject to the electrical codes that your local city or county government, or in some instances your state government, has in place. The government’s principal concern is the safety of the facility, so these code requirements emphasize proper wiring and installation and the use of components that have been certified for fire and electrical safety by approved testing laboratories, such as Underwriters Laboratories. Most local electrical codes requirements are based on the National Electrical Code (NEC), which is published by the National Fire Protection Association. As of 2011, the latest version of the NEC began including sections specific to the installation of small wind energy facilities.[4] The NEC is available for purchase online at the National Fire Protection Association website[5] and can also be found at most local libraries.

If your wind turbine is connected to the local utility grid so that any of the power produced by your wind turbine is delivered to the grid, then your utility also has legitimate concerns about safety and power quality that need to be addressed. The utility’s principal concern is that your wind turbine automatically stops delivering any electricity to its power lines during a power outage. Otherwise line workers and the public, thinking that the line is “dead,” might not take normal precautions and might be hurt or even killed by the power from your turbine. Another concern among utilities is whether the power from your facility synchronizes properly with the utility grid and it matches the utility’s power in terms of voltage, frequency, and power quality.

A few years ago, some state governments started developing new standardized interconnection requirements for small renewable energy generating facilities (including wind turbines). In most cases, the new requirements are based on consensus-based standards and testing procedures developed by independent third-party authorities, such as the Institute of Electrical and Electronic Engineers (IEEE) and Underwriters Laboratories. Utility companies will typically require compliance with IEEE 1547, which addresses electrical safety requirements for wind turbine systems. Some utilities may require appropriate electrical listing before allowing interconnection of the wind system.

Interconnection Requirements

Most utilities and other electricity providers require you to enter into a formal agreement with them before you interconnect your wind turbine with the utility grid. In states that have retail competition for electricity service (e.g., your utility operates the local wires, but you have a choice of electricity provider), you may have to sign a separate agreement with each company. Usually these agreements are written by the utility or the electricity provider. In the case of private (investor-owned) utilities, the terms and conditions in these agreements must be reviewed and approved by state regulatory authorities.

Insurance

Some utilities require small wind turbine owners to maintain liability insurance in amounts of $1 million or more. Utilities consider these requirements necessary to protect them from liability for facilities they do not own and have no control over. Others consider the insurance requirements excessive and unduly burdensome, making wind energy uneconomic. In seven states (California, Georgia, Maryland, Nevada, Oklahoma, Oregon, and Washington), laws or regulatory authorities prohibit utilities from imposing any insurance requirements on small wind systems that qualify for “net metering.” In at least two other states (Idaho, Virginia), regulatory authorities have allowed utilities to impose insurance requirements but have reduced the required coverage amounts to levels consistent with conventional residential or commercial insurance policies (e.g., $100,000 to $300,000). If your insurance amounts seem excessive, you can ask for a reconsideration from regulatory authorities (in the case of private investor-owned utilities) or the utility’s governing board (in the case of publicly owned utilities).

Indemnification

An indemnity is an agreement between two parties in which one agrees to secure the other against loss or damage arising from some act or some assumed responsibility. In the context of customer-owned generating facilities, utilities often want customers to indemnify them for any potential liability arising from the operation of the customer’s generating facility. Although the basic principle is sound—utilities should not be held responsible for property damage or personal injury attributable to someone else—indemnity provisions should not favor the utility but should be fair to both parties. Look for language that says, “each party shall indemnify the other . . .” rather than “the customer shall indemnify the utility . . .”

Customer Charges

Customer charges can take a variety of forms, including interconnection charges, metering charges, and standby charges. You should not hesitate to question any charges that seem inappropriate to you. Federal law (Public Utility Regulatory Policies Act of 1978, or PURPA, Section 210) prohibits utilities from assessing discriminatory charges to customers who have their own generation facilities.

References

  1.  "U.S. Department of Energy. Net Metering"
  2.  "Interstate Renewable Energy Council. (2010). The Intersection of Net Metering & Retail Choice: An Overview of Policy, Practice, & Issues"
  3.  "Interstate Renewable Energy Council. (2010). The Intersection of Net Metering & Retail Choice: An Overview of Policy, Practice, & Issues"
  4.  "Preus, Robert. (June-July 2011). Small Wind Systems and the NEC. Home Power Magazine."
  5.  "National Fire Protection Association. National Electrical Code"