Grid Connection Backlog for Renewables Surged 30% Last Year

icture the energy grid as a massive network similar to the human circulatory system. In this analogy, power plants are the heart, pumping energy, while transmission lines are the arteries, carrying that energy across the nation. For a country to run smoothly, just like for a body to stay healthy, these pathways must be free from blockages and capable of adapting to new demands.

However, a substantial challenge lies in the interconnection process—the method through which new energy projects are integrated into the existing grid. Recent findings highlight a significant growth in the backlog of renewable energy projects awaiting connection, with a whopping 30% increase last year. Stay with SunValue as we break down this backlog issue. We'll get into the root causes of the buildup, examine the distinct challenges that various renewables are up against, and look into the innovative fixes that are on the table.

The Logjam in the Grid

Interconnection queues are essentially waitlists for new energy projects that need to connect to the electrical grid. Managed by Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) alongside various non-ISO utilities, these queues are critical for planning and integrating new energy capacities into the national infrastructure.

The latest report from Lawrence Berkeley National Laboratory points out a major speed bump on America's road to an energy makeover. As the year 2023 closed, the queue for grid interconnection was jam-packed with a massive 2,600 gigawatts (GW) of energy capacity. Just to give you an idea, that’s about twice as much as what the whole country can generate right now.

Despite the enthusiasm for renewable ventures, many of them might never break ground. If we take a closer look at the stats, we see that only a small fraction—19% to be precise— of projects that entered the pipeline between 2000 and 2018 were completed by the end of 2023.

In addition, the time it takes for projects to transition from the planning stage to full operation has increased. Back in the early 2000s, it used to be less than two years. Now, on average, it's over four years. In fact, in 2023, certain projects even took up to five years to get up and running.

Dominance of Zero-Carbon Resources

Interestingly, this isn't just any capacity; over 95% of these projects involve zero-carbon resources such as solar, wind, and battery storage.

So, what's in the queue?

• Solar: Leading the pack with a whopping 1,086 GW awaiting approval, solar energy dominates the queue.
• Wind: Following closely behind is wind energy, with 366 GW eagerly waiting for interconnection. Of this, a substantial 120 GW is designated for offshore wind projects.
• Storage: There's a staggering 1,030 GW of storage capacity primed for action, with a particular emphasis on batteries capable of storing clean energy for peak demand periods.

Additionally, there is a notable trend towards hybrid projects, where different types of generation and storage are combined, like best efficiency solar panels paired with batteries. These projects, particularly popular in regions managed by CAISO (California Independent System Operator) and non-ISO areas in the West, are designed to demonstrate a strategic approach to leveraging multiple renewable resources together. Currently, 571 GW of these projects involve solar hybrids, showing a clear preference for pairing solar with storage solutions.

What About Fossil Fuels?

The transformation in the energy landscape isn't just marked by the rise of renewables but also by the retreat of traditional fossil fuels. Natural gas, once hailed as the go-to fuel for transitioning to a greener future, is now taking a backseat, overshadowed by the rapid advancement of clean technologies.

Meanwhile, coal, notorious for its environmental and health impacts, is struggling to maintain its position on the energy grid, indicating the dusk of an era that fueled the Industrial Revolution and subsequent advancements.

Backlog Breakdown: The Main Factors

The backlog is more than just a number; it signifies a significant obstacle in the rollout of renewable energy. The necessary transmission interconnection studies, essential for making sure new projects blend smoothly with the current grid, have turned into a big stumbling block. This holdup doesn't just slow down the launch of solar projects—it also impacts investment and policy choices throughout the energy industry.

The buildup of projects waiting for grid connection is due to several important factors:

• High Demand for Renewables: With attractive policy incentives and falling costs, the demand for renewable energy projects has skyrocketed.
• Complex Interconnection Process: Connecting to the electrical grid isn't straightforward. It involves several detailed phases, such as feasibility studies, system impact assessments, and facility studies. Each of these phases adds layers of time and complexity to the process.
• Grid Infrastructure Challenges: The existing grid infrastructure wasn't originally built to handle a heavy load of the on-again, off-again nature of solar and wind power. It needs some serious tech upgrades to handle the new green wave.

Regulatory Moves to Tackle Project Delays

Authorities are already tackling the issue head-on. The Federal Energy Regulatory Commission (FERC) introduced substantial interconnection reforms in 2023. Now, with final approval sealed in March 2024, these updates are expected to cut down on the confusion and waiting times that have been a headache for project developers.

Also, recognizing the challenges that have been delaying the uptake of the most efficient solar power and other forms of alternative energy sources, the Department of Energy (DOE) has developed a detailed new plan called the Transmission Interconnection Roadmap. Led by the DOE's Interconnection Innovation e-Xchange (i2X), this strategy is designed to speed up the grid connection process and make sure renewable energy plays a bigger, smoother role in the nation’s national power mix.

Here’s what they are aiming to improve:

• Data Management: The new roadmap focuses on improving how data is managed for projects waiting to connect to the grid. This includes enhancing the way data is gathered, accessed, and used, targeting top-notch quality and consistency across the board.
• Streamlining Processes: The DOE is working to make the pathways for connecting projects to the grid more efficient. They’re expanding quicker connection options and setting up clearer and more consistent rules for making those connections happen.
• Cost and Efficiency: A major goal of the roadmap is to reduce both the unpredictability and the overall cost of connecting to the grid. The plan is to speed up the process, aiming to wrap up interconnection requests in less than 12 months and reduce the associated costs.
• Reliability and Security: As we plug in more renewable projects, it’s crucial to keep the grid stable and secure. The roadmap includes measures to minimize disruptions and bolster the grid's overall stability and resilience.

The DOE isn't just setting ambitious goals; they have established measurable targets to track their progress. By 2030, they plan to dramatically lower both the time and costs tied to grid interconnections. Key objectives include shortening the average time it takes to wrap up interconnection deals and cutting down the cost variability for all projects to below $150 per kilowatt.

Additionally, they aim to increase the success rate of projects that make it through the facility study phase to over 70% and to solve major reliability problems that arise during project integration.

Final Thoughts

The surge in the queue for connecting renewables and storage is a mixed blessing. On one hand, it shows we're moving towards more sustainable energy sources, which is great. On the other, it underlines the big challenges we still have to tackle to really make the most of this shift. By combining regulatory reform, technological innovation, and smart planning, we're paving the way for a future powered by renewables.

The situation is evolving, and stakeholders across the board—from policymakers to developers to consumers—are watching closely. The next few years are going to be key in seeing just how well the U.S. can move towards a greener, more reliable energy system.

Sources:

https://emp.lbl.gov/queues

https://www.ferc.gov/news-events/news/