The U.S. energy landscape is undergoing a significant transformation, with solar and storage projects dominating the power sector's near-term additions. However, despite the progress made by regional grid operators in interconnection reform, these projects still face substantial barriers to deployment. This article delves into the complexities of the interconnection process, highlighting the challenges faced by solar and storage developers, and the varying approaches taken by different grid operators across the country.
The Interconnection Conundrum
The Generator Interconnection Interim Progress Report, prepared for Advanced Energy United by Grid Strategies and The Brattle Group, reveals a mixed picture for solar and storage developers. While regional grid operators are implementing cluster studies, readiness requirements, automation, and proactive transmission planning, the report notes that active queue capacity remains high, withdrawal rates have increased, and fast-track policies may prioritize fossil-heavy resources.
The queue shake-out is evident, with solar interconnection capacity declining by 11.9% in 2024, and stand-alone storage and hybrid projects experiencing similar drops. This shift raises concerns about the equitable use of limited grid headroom.
Cost Uncertainty and Network Upgrades
Cost uncertainty is a central barrier for solar and storage developers. Network upgrade costs for withdrawn projects can account for up to 70% of total interconnection costs, according to Berkeley Lab research. This is particularly challenging for smaller projects, with average network upgrade costs ranging from $200/kW for solar projects larger than 400 MW to $300/kW for those smaller than 25 MW.
Regional Operator Approaches
The report provides a detailed breakdown of the progress made by seven regional transmission system operators:
- SPP: Studying 340 GW of generation and moving towards a Consolidated Planning Process with GRID-C, a predictable per-MW fee. The success of this model depends on affordability for developers.
- MISO: Facing a large backlog, MISO is implementing reforms for its 2025 cluster, including a zonal queue cap and stricter readiness requirements.
- PJM: Nearing the end of a queue transition, PJM is advancing reforms for surplus and capacity interconnection rights transfers, potentially fast-tracking significant solar and storage projects.
- CAISO: Employing a location-specific approach with zonal caps and heat maps to steer projects towards available capacity.
- ISO-NE and NYISO: Focusing on cost and timing certainty, automation, and better use of existing capacity.
- ERCOT: The outlier, with no current backlog of studies and a 'connect and manage' approach that has led to successful interconnections in 2024.
The Way Forward
The success of interconnection reform hinges on the implementation of regional operators' next steps. The report emphasizes the need for a swift transition from queue positions to commercial operation to meet rising demand. As solar and storage continue to dominate U.S. power additions, addressing the barriers to interconnection is crucial for a sustainable and resilient energy future.
In my opinion, the key to unlocking the full potential of solar and storage lies in the hands of grid operators. By streamlining processes, reducing cost uncertainties, and ensuring equitable use of grid resources, these operators can facilitate a faster and more efficient transition to a clean energy economy. The challenge is real, but so is the opportunity.
