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Distributed Generation

Most electricity is generated in large centralized facilities which have economies of scale, may have negative environmental effects, and usually require electricity to be transmitted long distances. Distributed generation (DG) is the generation of electricity on-site or close to where it is needed in small facilities designed to meet local needs.  DG is sometimes referred to as on-site generation, dispersed generation, or decentralized generation. Distributed generation may give lower environmental impacts and improved security of supply.

Information Gathering and Ongoing Assessment

Distributed Generation Resource staff has been gathering additional information from stakeholders and from national experts on issues related to DG and net metering.

Several key points have emerged. Advances in technology and economics are contributing to increasing interest in DG in Minnesota; consumer requests for DG will likely grow. It’s important to accurately identify and quantify the impacts (costs and values) of DG; this can be difficult because costs and values of DG vary geographically and in time.  

In support of growing customer interest and in response to stakeholder identified issues and opportunities, DER staff is conducting an initial assessment of Minnesota distributed generation. This initial assessment will include determining a baseline (historical and current) for Minnesota DG and net metering installations, benchmarking Minnesota practices and installations with other states and national best practices, reviewing the current Minnesota DG interconnection process and requirements, and identifying DG impacts (costs, benefits, reliability).  

2014 Workshops

The Department of Commerce will host a series of combined heat and power (CHP) stakeholder meetings between September 3rd and November 5th to provide information and facilitate discussion on CHP issues involving Minnesota’s regulatory framework, technical/economic potential, and education/training needs. Additionally, on September 11, Commerce will host a stakeholder meeting on the scope and need for a generic proceeding on Standby rates.  On April 11, the Public Utilities Commission hosted a workshop on Smart Grid topics related to “Renewables on the Distribution Grid.”

Details on 2014 Workshops

2013 Workshops

On January 9th at the invitation of the Minnesota Department of Commerce, Division of Energy Resources (DER), Karl Rabago (Rabago Energy LLC, was in Minnesota to discuss his recent experience developing Austin Energy’s Value of Solar tariff and how it could inform current work in Minnesota. 

Details on 2013 Workshops

2012 Workshops

On May 31, a small daylong workshop was held with stakeholder and utility engineers to discuss technical interconnection issues. A webinar on August 15 to provided an update on baselines and benchmarks for Minnesota DG and on October 11 a daylong meeting explored costs, values, benefits and policy options for DG. 

2011 Workshops

In the fall of 2011, the Minnesota Department of Commerce, Division of Energy Resources (DER) conducted a series of four stakeholder workshops to explore distributed generation (DG) resources opportunities and issues. The focus of these workshops was on distributed generation resources less than 10 Megawatts in size using renewable energy or high-efficiency combined heat and power generation. The first workshop on September 29 provided an introduction and overview of distributed generation topics, with presentations from a variety of stakeholders identifying how DG policies affect them. 

The second workshop on October 11 examined contractual issues important to DG projects such as standby rates, third-party ownership, power purchase agreements, and interconnection standards. The third workshop on November 1 focused on Net-Metering issues: how Minnesota’s net-metering policy compares to that in other states, current best practices, and a discussion with stakeholders on potential areas for change. In the fourth workshop on November 8, stakeholders split into smaller groups to explore issues raised in the first three workshops and identify next steps for policy improvements.