Distributed Renewable Energy Operating Impacts and Valuation Study

Section 3
The DSS model did not restrict the hourly generated PV to the each customer’s maximum load;
as a result, during some hours PV systems were back-feeding into the grid. If back-feeding were
not allowed, the percentage loss reduction would be greater. The system level energy loss
analysis in Section 4 does not include reduced losses due to backfeed. As previously indicated,
complete results of this analysis, including a breakdown of loss contributors by equipment type,
is included in Appendix K.
3.3 Deferment of Capex
3.3.1 Methodology
Solar DE can potentially provide value to APS by decreasing the capacity requirements of the
distribution system based on the reduction in demand as described earlier. Decreased capacity
requirements reduce or defer capex for capacity upgrades.
Distribution equipment is sized to serve the projected annual peak load. Capital improvement
projects (capex) are planned when projected loads will exceed the planning load limit of a feeder
or substation. Solar DE can provide value by reducing load (demand) on a particular feeder or
substation sufficiently to defer a capital improvement project.
APS has developed a “2008-2010 Three Year Plan” for capex projects in each division of the
Phoenix metropolitan area of the distribution system. Table 3-4 summarizes the proposed capital
budgets based on the projected non-coincident load growth of each feeder in each division. Over
the three-year period, the capital budget for distribution infrastructure additions and
improvements averages approximately $115,000 per MW of non-coincident load growth. This
value is used to approximate the potential capacity savings system-wide based on the Target
scenario analysis.
Table 3-4
Regional Load Growth and Budget Projections
2008 2009 2010 Average
Load
Growth
(MW)
Capital
Budget
($000)
Load
Growth
(MW)
Capital
Budget
($000)
Load
Growth
(MW)
Capital
Budget
($000)
$/MW
($000)
Metro Eastern Division 40 $7,957 27 $13,983 101 $11,866
Metro Central Division 128 $14,300 99 $8,710 84 $6,126
Metro Western Division 151 $18,145 180 $17,090 196 $15,660
Totals 319 $40,402 306 $39,783 381 $33,652
$/MW Load Growth $126 $130 $88
Average $/MW Load Growth 1 $115
_____
Source: “2008-2010 Three Year Plan” APS, 2007
1. Value is rounded
Because distribution capacity is solely based on local peak loads, distribution capacity savings
can only be realized if solar DE is strategically located to relieve distribution congestion or to
3-8 R. W. Beck, Inc. Arizona Public Service