ISO-NE seeks solar power rules change to aid market pricing, grid efficiency

ISO New England and the New England Power Pool (NEPOOL) are seeking approval from the Federal Energy Regulatory Commission (FERC) to better integrate solar power installations into the regional power grid and wholesale electricity markets.

Most resources on the grid today are dispatchable, meaning the ISO sends them electronic instructions over a private network to increase or decrease their electricity output in response to consumer demand and other factors. “Front-of-meter” solar resources, on the other hand, are non-dispatchable, meaning the ISO must manually call the resource operators to request any changes in output. That’s inefficient, and can hinder efforts to achieve power balance during a system emergency.

Although they are paid the prevailing market rate when they send electricity to the grid, non-dispatchable resources don’t submit priced offers to produce electricity in New England’s energy markets. As a result, their true costs aren’t reflected in wholesale electricity prices, even when they represent the cheapest source of electricity available to the grid.

The proposed revisions to the ISO’s tariff would apply to front-of-meter solar resources, meaning resources like large solar farms and other solar installations that provide electricity directly to the regional power grid. These resources would be classified as dispatchable under “do not exceed” (DNE) rules that account for the resources’ variable output and any congestion on the transmission system.

The ISO is proposing these revisions now to accommodate the increasing number of solar installations already connected to and seeking to connect to the grid. With the New England states’ strong renewable energy programs and decarbonization goals, the ISO expects solar installations to continue to grow well into the future. If approved, the tariff revisions would help increase the efficiency of this growing renewable resource’s participation in New England’s wholesale energy markets.

The DNE framework was adopted in 2016 with the goal of maximizing the use of low-cost renewable energy. It initially applied only to wind farms and hydroelectric dams. Photovoltaics were not included because few front-of-meter solar resources existed at the time, and because of technological limitations around predicting their output.

Solar resources have become more prevalent since then, and are expected to continue growing. Meanwhile, the ISO’s solar power forecasting capabilities have improved. Grid-connected solar farms already regularly provide the ISO with site-specific meteorological data to facilitate forecasting. Under the proposed tariff revisions, they would provide even more data, including irradiance information that would be transmitted every 30 seconds.

ISO New England has asked FERC to accept the tariff revisions within 60 days to allow sufficient time for implementation before a proposed effective date of December 5, 2023.