Poor grid interconnection policies are causing project backups across the U.S., study says
Energize Weekly, March 6, 2024
The grid interconnection process in the U.S. is so “dysfunctional” that more than two million megawatts of generation and storage are waiting to be hooked up, according to an analysis by Advanced Energy United (AEU).
The study by the business group, representing energy and manufacturing companies, evaluated the countries seven regional grids and found the biggest problems in the PJM Interconnection, which serves mid-Atlantic and Midwestern states, and the ISO New England (ISO-NE).
In the AEU scorecard PJM received a D- grade and ISO-NE a D+.
“The generator interconnection process is not working effectively and efficiently to allow new generation and storage resources access to the transmission network,” the scorecard said. “The progress towards completing those interconnections is slow and puts system reliability at risk.”
The Brattle Group and Grid Strategies conducted the survey for AEU.
The best grades were garnered by the California Independent System Operator (CAISO) with a B, and the Electricity Reliability Council of Texas (ERCOT) which also received a B.
The grid operators were graded on elements such as the quality of pre-queue information for developers, the design process, transparency and costs.
“ERCOT has a relatively fast and consistent interconnection process, with reasonable costs, although challenges to transmission network upgrade construction can slow the process towards the end and result in curtailment of projects that do get built,” the scorecard said.
Even as large queue volumes slowed processing rates across the country, ERCOT maintained high processing speed, AEU said.
CAISO has also had a relatively “fast and consistent process” for projects submitted before 2020, the scorecard said. Since then, a large increase in applications has slowed approvals.
Still, CAISO’s proactive management policies, transparency and certainty on costs for interconnection customers bolstered its grade.
There are “few bright spots” for PJM, according to the report. “It appears that PJM stuck with a sub-par serial process too long and its transition to a cluster process has frozen opportunities for new projects. PJM has not planned its system to create headroom for new resources, other than its recent process concerning offshore wind.”
Jeff Shields, a PJM spokesman, told Utility Dive that the AEU assessment was based on its old procedures, which have been updated.
“We have been meeting process milestones since implementation of the reforms in July 2023, and expect to process about 72,000 MW [megawatts] in projects by mid-2025 and 230,000 MW over the next three years,” he said.
Shields said more than 90 percent of those projects are renewable energy or energy storage.
ISO-NE has a relatively low interconnection volume but is transmission constrained, particularly in Massachusetts and Maine. That could result in “significant upgrade costs” triggered by new projects.
“Those upgrades, as well as planned transmission expansions, are difficult to build, making it difficult to bring projects online,” the scorecard said. “Another criticism is the unique requirement for a high-cost model with the initial application.”
The other three regional transmission operators fared a little better with the New York ISO (NYISO), Southwest Power Pool (SPP), and Midcontinent Independent System Operator (MISO) each receiving a C-.
