It is clear that improved grid transparency tools are necessary to help Minnesota tap into the full potential of distributed energy resources (DERs), including renewable energy, electric vehicles and energy storage. An order issued on Aug. 15 by the Minnesota Public Utilities Commission outlines steps Xcel Energy must take to support the state's grid transparency efforts and clean energy policies.

Once the changes are implemented, the state's DER industry and customers will benefit from increased access to information about Xcel's distribution grid, which will help streamline project development.

Over the last three years, the Interstate Renewable Energy Council (IREC) has been involved in proceedings before the Minnesota Commission focused on tools to enhance the transparency of Xcel Energy's distribution grid. Specifically, the docket focused on Xcel's efforts to conduct a hosting capacity analysis (HCA), which is a tool that can show where on the system the capacity exists to quickly interconnect more distributed energy resources, without additional upgrades or costs.

The Commission's latest order requires Xcel to improve its hosting capacity analysis, saying that "improved and additional information is necessary in future reports to satisfy" Minnesota law and that "the HCA may not be fulfilling the Commission's overall objective of providing meaningful assistance to developers."

Further improvements to Xcel's hosting capacity analysis are necessary to ensure that Minnesota is poised to unleash the full potential of distributed energy resources. 

The call for additional improvements comes after state law first required Xcel to publish in 2015 an analysis of the hosting capacity of each feeder for small-scale DERs. Xcel's first hosting capacity report had serious deficiencies, and IREC has consistently sought improvements to the underlying methodology utilized by the DRIVE software that Xcel uses.

Yet, with each iteration, IREC and Fresh Energy found that the HCA did not include any demonstrable improvements in the usefulness of the results for developers and customers interested in installing distributed energy resources.

The result is that developers are not using these grid transparency tools because they cannot rely on them to inform their project development efforts.

In 2019 IREC worked with Fresh Energy to survey distributed energy resource developers in Minnesota to get their perspective on the usefulness of Xcel's HCA and map three years after the Commission required their publication. One developer noted that the "map is totally unreliable. It shows that there is almost no capacity anywhere. This is not true."

Another developer responded that the published results "differed greatly" from the actual hosting capacity of Xcel's system, providing as an example that one location where the map showed no capacity available "had 14MW of capacity without upgrades when in final design with Xcel." The developer concluded that she "no longer use[s] the map as a result."

In other words, Xcel's HCA does not provide developers a reliable or accurate estimate of Xcel's actual hosting capacity, and is therefore not being used by DER project developers.

So the question is, why? We have learned that there are several limitations to the HCA methodology found in the DRIVE software that Xcel uses, as well as other problems with the approach taken by Xcel in developing the HCA maps. 

First, the HCA does not provide a precise hosting capacity value for a specific address, instead it provides a range for the hosting capacity of an entire feeder. The range provided is often so large as to be effectively useless, e.g., Xcel feeder HSN312 provides a hosting capacity range of 100 kW to 3.31 MW. By contrast, other commercially available HCA methodologies and software packages provide a single value for specific nodes or sections of each feeder. 

Fortunately, the Commission's order requires Xcel to 1) demonstrate if the DRIVE software is able to provide a hosting capacity value for different locations on a feeder and 2) compare its current hosting capacity analysis methodology to other methodologies on a selection of representative feeders in Minnesota. This comparison will provide much needed information to help inform future improvements to this tool.

We are hopeful that a comparison of the DRIVE methodology to the methodology used in other commercially available software, will show that a well-designed hosting capacity methodology can reduce the time and cost of deploying distributed energy resources in Xcel's service territory. It remains to be seen whether an independent party may be needed to support further comparative analyses or evaluate the results of Xcel's analysis. 

Another flaw with Xcel's HCA is that it is not based on the actual daytime minimum load of each circuit. Instead, Xcel uses estimated load data, which produces less accurate and less reliable results than actual load data. The Commission ordered Xcel to prioritize the tracking of actual daytime minimum load and agreed with IREC that the next iteration of Xcel's hosting capacity analysis must be based on the actual daytime minimum load of each circuit, if such data is available. 

Third, the HCA map lacks basic system information to help provide greater visibility into the best place to locate DERs. This year, IREC reiterated its suggestion that the commission require Xcel to publish this additional information. The commission agreed and the order requires the next iteration of Xcel's map to include numerous useful data points that are not publicly available today.

Starting in November, Xcel's map must include actual peak load, daytime minimum load, installed generation, and queued generation for each substation and feeder. The addition of this data to the map will help improve the usefulness of the HCA maps.

A further limitation of Xcel's HCA is that it does not currently provide hosting capacity for load, which prevents it from being useful for customers seeking to install electric vehicles and energy storage systems that may charge from the grid. In response to concerns raised by Fresh Energy and IREC, the Commission ordered Xcel to complete this analysis for one feeder, which is a promising step to address this limitation in the future.  

Lastly, the HCA and maps are only updated annually, which limits its usefulness. Xcel's annual update schedule provides stale results most of the year.

Unfortunately, the Commission did not address this issue in its recent order, which will mean the map cannot be used to accurately and efficiently inform project development. 

Clearly, further improvements to Xcel's hosting capacity analysis and map are necessary to help Minnesota realize the full potential of DERs, including renewable energy, electric vehicles, and energy storage.

IREC, Fresh Energy, and distributed energy resource developers identified numerous deficiencies in Xcel's report and map that appear to be derived from both limitations inherent in the methodology used as well as the quality of the data Xcel was putting into it. The Commission took a close look at Xcel's implementation of the DRIVE methodology and found that it must be improved.