Dive Brief:
- FERC Order 2023 will ease interconnection bottlenecks that have worsened in recent years, but further updates are needed to keep pace with changing technology, five energy system experts said on a May 8 panel at the Cleanpower Conference in Minneapolis.
- Order 2023 asks transmission operators to study proposed projects in “clusters” rather than serially, requires developers to demonstrate full site control before entering the interconnection queue, increases financial commitments and withdrawal penalties for projects in the queue, prioritizes “affected system studies” for projects expected to impact multiple transmission systems and allows multiple resources to colocate on the same site, among other reforms. However, it’s too early to say how impactful the changes will be in shrinking the interconnection backlog, panelists said.
- Order 2023 “has set a floor but hasn’t necessarily put in a ceiling” for interconnection reform, said Federal Energy Regulatory Commission Senior Policy Advisor Kathleen Ratcliff. “[There’s] still a lot to do.”
Dive Insight:
The U.S. interconnection queue grew from 325 GW in 2014 to 2,598 GW in 2023, Lawrence Berkeley National Laboratory said in an analysis released last month. About 95% of the queue is renewables or energy storage, with solar and storage each accounting for 1 TW and wind making up about 300 GW.
The number of unique pending interconnection requests increased several times over during the same period, from about 500 in the early 2010s to about 3,000 today, said panelist Joe Rand, an energy policy researcher at LBNL and study co-author. Only 14% of generating capacity entering the queue between 2000 and 2018 was built as of 2023, hinting at “major problems [at a] deeper level,” he said.
Those structural problems stem from “significant changes” to the resource types seeking interconnection and their developers’ business models in the 20 years since Order 2003, FERC’s previous significant interconnection overhaul, Ratcliff said.
The onslaught of interconnection requests has been difficult for grid operators to keep up with, said Zach Smith, NYISO senior vice president for system and resource planning. NYISO has nearly 500 active projects in its interconnection queue, according to LBNL’s analysis, compared with a dozen or two dozen interconnection requests per year earlier in the century, Smith said.
“We thought that was a lot, but it’s nothing compared to today,” he said.
Smith praised the shift to cluster studies, which he said NYISO has done “from the get-go.” But the impact of that shift will take time to show up in the queue, said panelist Brett White, Pine Gate Renewables vice president for regulatory affairs. “We’re just seeing projects trickle out” of the PJM Interconnection following reforms implemented last year, and projects that entered the queue in 2020 might not interconnect until 2027, he said.
PJM has pushed back on claims that it’s holding up new generation requests. Its new process cleared more than 100 “speculative” requests last year and should complete interconnection studies for 46 GW of new generating capacity by mid-2025, PJM Vice President for Planning Paul McGlynn wrote in April. Moreover, some 40 GW of PJM-approved projects have not yet proceeded to construction due to “continued challenges with supply chain, financing and local siting issues,” he wrote.
FERC Order 2023 may help reduce uncertainty around infrastructure upgrades necessitated by new generation, White said. The order requires transmission providers to evaluate whether grid-enhancing technologies can stand in for more expensive, time-consuming network upgrades. That could improve the accuracy of grid operators’ cost estimates for needed grid infrastructure upgrades, which may not be clear until later in the study process, and thereby reduce developers’ risk of “[making] the decision to move ahead…with flawed data,” he said.
Turning to the future, panelists expressed hope that FERC’s new transmission rule would build on Order 2023’s reforms and make generation and grid planning more predictable.
“We have to get beyond the reactionary [planning process]” and move toward a more proactive posture that better integrates new renewable generation with fewer costly system upgrades, Smith said. NYISO began doing that following the release of FERC Order 1000 in 2011 and is “currently laying the groundwork” to efficiently add offshore wind to the grid in southern New York, he added.
Future interconnection and transmission reforms should incorporate ideas from DOE’s i2X initiative, which is “designed to complement and go beyond Order 2023,” Rand said. Potential reforms include better coordination of affected system studies, additional data transparency requirements that build on the interconnection capacity “heatmaps” required by Order 2023, queue processing automation and refinements to infrastructure cost-sharing among projects in interconnection clusters, he said.
FERC has scheduled a two-day workshop starting on Sept. 10 to consider possible ways to continue improving the interconnection process.
