Plans to install 3,000 acres of solar panels in Kentucky and Virginia have been delayed for years. Wind farms in Minnesota and North Dakota have been abruptly canceled. And programs to encourage Massachusetts and Maine residents to go solar are faltering.
The energy transition, poised to take off in the U.S. amid record investments in wind, solar and other low-carbon technologies, faces a serious obstacle: The number of projects has overwhelmed the nation’s antiquated systems to connect new sources of electricity to homes and companies.
So many projects are trying to squeeze through the approval process that delays can drag on for years, prompting some developers to throw up their hands and walk away.
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More than 8,100 energy projects – the vast majority of them wind, solar and batteries – were waiting for permission to connect to electricity grids at the end of 2021, up from 5,600 the year before, blocking the system known as interconnection.
It is the process by which electricity generated by wind turbines or solar panels is added to the grid – the network of power lines and transformers that move electricity from where it is created to cities and factories. There is not a single grid; The United States has dozens of electric grids, each overseen by a different authority.
PJM Interconnection, which operates the nation’s largest regional grid that stretches from Illinois to New Jersey, has been so inundated with interconnection requests that last year it announced a freeze on new applications until 2026 so it can work through a backlog of thousands of proposals , mostly for renewable energy.
It now takes about four years on average for developers to get approval, twice as long as it took ten years ago.
And when companies finally get their projects through, they often face another hurdle: The local power grid is at capacity, and they’re obligated to spend much more than they planned for new transmission lines and other upgrades.
Many give up. Fewer than a fifth of solar and wind proposals actually make it through the so-called interconnection queue, according to research from the Lawrence Berkeley National Laboratory.
“From our perspective, the interconnection process has become the No. 1 project killer,” said Piper Miller, vice president of market development at Pine Gate Renewables, a major solar and battery developer.
After years of breakneck growth, large-scale solar, wind and battery installations in the U.S. are set to decline 16% in 2022, according to the American Clean Power Association, a trade group. It blamed supply chain problems but also long delays connecting projects to the grid.
Electricity generation generates about a quarter of the greenhouse gases produced by the United States; cleaning it up is key to President Joe Biden’s plan to combat global warming. The landmark climate law he signed last year provides $370 billion in subsidies to help make low-carbon energy technologies — such as wind, solar, nuclear or batteries — cheaper than fossil fuels.
But the law does little to address many practical barriers to building clean-energy projects, such as allowing holdups, local opposition or transmission restrictions. Unless these obstacles are addressed, experts say, there is a risk that billions in federal subsidies will not translate into the deep emissions reductions that lawmakers envision.
“It doesn’t matter how cheap the clean energy is,” said Spencer Nelson, executive director of research at the ClearPath Foundation, an energy-focused nonprofit. “If developers can’t get through the interconnection process fast enough and get enough steel in the ground, we won’t meet our climate goals.”
Waiting in line for years
In the largest grids, such as those in the Midwest or Mid-Atlantic, a regional operator directs the byzantine flow of electricity from hundreds of different power plants through thousands of miles of transmission lines and into millions of homes.
Before a developer can build a power plant, the local grid operator must ensure that the project does not cause disruption; If, for example, existing power lines receive more electricity than they can handle, they can overheat and fail. After conducting a detailed study, the grid operator may require upgrades, such as a line connecting the new plant to a nearby substation. The developer usually covers these costs. Then the operator moves on to study the next project in the queue.
This process was fairly routine as energy companies built a few large coal or gas plants each year. But that has broken down as the number of wind, solar and battery projects has skyrocketed over the past decade, fueled by falling costs, state clean energy mandates and now large federal subsidies.
“The biggest challenge is just the sheer volume of projects,” said Ken Seiler, head of system planning at PJM Interconnection. “There are only so many power engineers out there who can do the sophisticated studies we need to do to make sure the system remains reliable, and everyone else is trying to hire them as well.”
PJM, the grid operator, now has 2,700 energy projects under consideration — mostly wind, solar and batteries — a number that has tripled in just three years. Wait times can now reach four years or more, prompting PJM last year to pause new reviews and overhaul its processes.
Delays could upend business models for renewable energy developers. As time goes on, rising material costs can erode a project’s viability. Opportunities to buy land expire. Potential customers lose interest.
Two years ago, Silicon Ranch, a solar developer, applied to PJM for permission to connect three 100-megawatt solar projects in Kentucky and Virginia, enough to power tens of thousands of homes. The company, which often pairs its solar installations with sheep grazing, had negotiated purchase options with local landowners for thousands of acres of farmland.
Today that land is empty. Silicon Ranch hasn’t received feedback from PJM and now estimates it may not be able to bring those solar farms online until 2028 or 2029. That creates a headache: The company may have to decide whether to buy the land before it even knows , whether its solar arrays will be approved.
“It’s frustrating,” said Reagan Farr, CEO of Silicon Ranch. “We always talk about how important it is for our industry to create trust and credibility with the local communities. But if you come in and say you want to invest, and then nothing happens for years, it is not an optimal situation.”
PJM plans to speed up its queues soon — for example, by studying projects in clusters instead of one at a time — but first needs to clear its backlog.
‘Imagine if we paid for motorways this way’
A potentially bigger problem for solar and wind is that the local grid in many places around the country is clogged, unable to absorb more power.
This means that if a developer wants to build a new wind farm, it may have to pay not only for a simple connecting line, but also for deeper grid upgrades elsewhere. A planned wind farm in North Dakota, for example, was asked to pay for multimillion-dollar upgrades to transmission lines hundreds of miles away in Nebraska and Missouri.
These costs can be unpredictable. In 2018, EDP North America, a renewable energy developer, proposed a 100-megawatt wind farm in southwest Minnesota, estimating it would need $10 million to connect to the grid. But after the grid operator completed its analysis, EDP learned the upgrades would cost $80 million. It canceled the project.
This creates a new problem: when a proposed energy project falls out of line, the grid operator often has to redo studies for other ongoing projects and shift costs to other developers, which can trigger more cancellations and delays.
It also creates perverse incentives, experts said. Some developers will submit multiple proposals for wind and solar farms in different locations without intending to build them all. Instead, they hope that one of their proposals will come after another developer to pay for major network upgrades. The increase in this type of speculative bidding has further stuck in the queue.
“Imagine if we paid for highways like this,” said Rob Gramlich, president of the consulting group Grid Strategies. “If a motorway is completely congested, the next car that gets on has to pay for an entire lane extension. When the driver sees the bill, they fall off. Or, if they pay for it themselves, everyone else can use that infrastructure. It makes no sense.”
A better approach, Gramlich said, would be for grid operators to plan transmission upgrades that are broadly beneficial and spread the costs among a broader set of energy providers and users, rather than having individual developers fix the grid bit by bit through a chaotic process.
There is precedent for that idea. In the 2000s, Texas officials saw that existing power lines would not be able to handle the growing number of wind turbines being built on the windy plains of West Texas, and planned billions of dollars in upgrades. Texas now leads the nation in wind power. Similarly, MISO, a grid that spans 15 states in the Midwest, recently approved $10.3 billion in new power lines, in part because officials could see that many of its states had set ambitious renewable energy goals and would need more transmission.
But this kind of proactive planning is rare, as utilities, government officials and businesses often bicker violently over whether new lines are needed — and who should bear the costs.
“The hardest part is not the engineering; it’s figuring out who’s going to pay for it,” said Aubrey Johnson, vice president of systems planning at MISO.
Climate goals in danger
As online delays pile up, regulators have taken notice. Last year, the Federal Energy Regulatory Commission proposed two major reforms to streamline interconnection queues and encourage grid operators to do more long-term planning.
However, the fate of these rules is unclear. In December, Richard Glick, the former chairman of the Regulatory Commission who spearheaded both reforms, resigned after clashing with Sen. Joe Manchin, DW.Va., over unrelated policies surrounding natural gas pipelines. The commission is now split between two Democrats and two Republicans; any new reform requires majority approval.
If the US can’t fix its grid problems, it could struggle to tackle climate change. Researchers at the Princeton-led REPEAT project recently estimated that new federal subsidies for clean energy could cut electricity emissions in half by 2030. But that assumes transmission capacity expands twice as fast over the next decade. If that doesn’t happen, the researchers found, emissions could actually rise as solar and wind are curbed and existing gas and coal plants run more frequently to power electric cars.
Massachusetts and Maine offer a caveat, said David Gahl, executive director of the Solar and Storage Industries Institute. In both states, lawmakers offered strong incentives for small-scale solar installations. Investors poured in, but within months, grid operators were overwhelmed, delaying hundreds of projects.
“There’s a lesson there,” Gahl said. “You can pass big, ambitious climate laws, but if you don’t pay attention to details like interconnection rules, you can quickly run into problems.”
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