The Interconnection Queue - A Growing Line in the US
The Interconnection Queue
A Growing Line in the US
We’ve all been in line — at the supermarket, the DMV, or on hold on the phone for customer service — what the British call being “in queue.” Well, it’s no different for massive generation projects of major electric utilities and developers, including terrestrial and offshore wind, battery storage, solar PV, and more traditional-type plants such as gas turbine combined cycle. These new facilities, as well as decommissioned coal plants that have been converted to natural gas, need to interconnect into the bulk power grid where they’re located. These projects waiting in the queue, which total about 1.4 terawatts (14,000,000,000,000 watts), more than the entire generation capacity of today’s US generation fleet, are cumulatively known as the “interconnection queue.”
But unlike standing in line at the supermarket for 10 minutes, the interconnection review process can take months, or years, and cost millions of dollars There are a number of factors that influence the lengthy review and approval process. Regional transmission organizations, such as PJM Regional Transmission Operator, the Midcontinent Independent System Operator (MISO), or the California Independent System Operator (CAISO) must first conduct studies to determine the feasibility of interconnecting, the need for upgrades to substations or other transmission infrastructure, how the proposed generation will affect the stability and capacity of the regional grid, the timeframe for completing the project, and how it will interact with other proposed projects in the region. And the interconnection studies alone can cost hundreds of thousands of dollars — or more.
Assuming the studies demonstrate that the generation project interconnection is feasible and compatible with the grid, the grid operator will quote an interconnection cost to the utility or developer. But even there, some uncertainty remains because interconnection costs are calculated on the assumption that all other projects in that specific queue will remain. If one or more projects drop out, that can very well increase the costs of the remaining projects, which may then price one or more of the remaining projects out. It also often results in the need to “re-study” interconnections for all remaining projects. Based on the latest figures, the largest number of projects in the various queues are solar, followed by storage, wind, and finally natural gas.
Most, if not all, of the projects in the interconnection queue, are will play a vital role for individual states in their progress toward meeting their renewable energy goals for 2025, 2030, and 2050. Unfortunately, many of these projects won’t be built for a variety of reasons including unanticipated costs, regulatory hurdles, lack of an agreement by some entity to purchase the output (a Power Purchase Agreement or PPA), and even NIMBY-ism (Not In My Back Yard). These obstacles have caused more than a little trouble in getting projects over the finish line; Department of Energy data show that from 2011–2016 about 72% of proposed projects were withdrawn for one or more reasons, and interconnection times rose from about 2 years in 2011 to almost 4 years by the end of 2021. Given that about 90% of interconnection requests are for zero-carbon projects, these developments are alarming to climate scientists and environmental activists. Developers of early-stage clean energy projects are particularly affected, because interconnection uncertainties may discourage off-takers from signing a PPA and make it impossible for generators to commit to a certain COD, Commercial Operations Date, or bid into future capacity markets. In some places, all interconnection requests have been put on hold so that the grid operator can standardize the interconnection study and approval process, and decrease the time required.
All of these hurdles demonstrate that more transmission planning between states and regional transmission organizations is needed. The US bulk power grid is constrained in many regions, meaning that generated electricity cannot be sent over the most economical route, costing ratepayers more for avoiding the congestion on certain transmission lines or the inability to utilize existing renewable capacity.
Reported congestion costs increased by 11% from 2016 to 2017, and by 21% from 2017 to 2018. In 2019, reported congestion costs decreased by approximately 30% compared to 2018 levels (Source)
In June 2022 the Federal Energy Regulation Commission (FERC) issued a NOPR, Notice of Proposed Rulemaking, to restructure the way interconnection requests are processed. The new ruling would apply to all projects within the seven regional RSOs and ISOs, as well as all investor-owned utilities outside the RTO/ISO footprints. The Texas grid operator, ERCOT, is not affected because it is not regulated by FERC.
Grid-enhancing technologies like our dynamic line ratings can dramatically increase capacity on congested power lines and save millions in congestion costs. Late last year we announced a project with National Grid — the largest installment of dynamic line ratings in the history of the US grid which would significantly empower the utility’s ability to not just prevent curtailments of renewable generation sources — but also integrate more. From our announcement:
“Throughout several phases of our work with National Grid in both Massachusetts and New York, we have seen…an average increase in transmission capacity of over 30%. This project, along with five miles of circuit rebuilds, is projected to reduce curtailments by over 350 megawatts while increasing capacity by 190 megawatts. We will, in essence, have added enough capacity to existing power lines to power some 80,000–100,000 homes.”
The inefficiencies and uncertainties in costs, time frames, and outcomes are creating obstacles that hinder new generation, especially renewables and distributed generation. LineVision — and grid-enhancing technologies can help. And right now! We don’t have to wait for new transmission and don’t need to see our progress on renewable energy growth stagnate. We have the tools to accelerate our path to a clean energy future right now. Because being frozen in a queue is not a good look.