A backed-up grid threatens clean energy growth from Virginia to Illinois

Backlogged power grids could be the biggest barrier to meeting U.S. decarbonization goals — and the grid operators in charge of clearing those backlogs and expanding grid capacity for solar, wind and battery projects are running out of time to solve the problem.

That’s the dire warning in a new study examining the interconnection woes of PJM, the grid operator that manages the high-voltage power grid serving about 65 million people in 13 states from the mid-Atlantic coast to Chicago.

The study from the Natural Resources Defense Council finds that PJM is so behind on reviewing and approving transmission interconnection requests for new clean energy projects that many of the states in its territory are at risk of not being able to meet their clean energy targets over the remainder of the decade.

Meeting those state targets should be ​“a bare minimum for PJM,” said Dana Ammann, NRDC policy analyst and author of the report. Much more clean energy growth may be stymied in the years to come — delays the country can’t afford if it is going to meet decarbonization deadlines and stave off the worst impacts of climate change.

State targets aren’t the only driver for clean energy, Ammann said. Last year’s Inflation Reduction Act provides federal tax credits and incentives that are expected to spur the development of 1,000 megawatts per year of additional clean energy in PJM territory, according to modeling by Princeton Zero Lab. Corporations, which have become significant buyers of new clean energy, are likely to push demand in the region higher still.

PJM has taken steps to reform its interconnection processes and speed up its queue, but Ammann says they are ​“a little too late for some of these state clean energy goals to be guaranteed.”

Last year, PJM won approval from federal regulators for its plan to relieve interconnection bottlenecks. Most notably, the operator intends to adopt a ​“clustered process” that enables it to review multiple projects at once instead of on a one-at-a-time serial basis.

Other grid operators have already implemented this measure in response to what’s become a severe backup of clean energy projects across the country. PJM has one of the largest backlogs, with wind, solar and battery projects making up 95 percent of the 250 gigawatts in its interconnection queue — as much prospective clean energy as now exists in the entire country.

But PJM’s reform process won’t be completed until 2026 — and until then, PJM will only be working on clearing about 1,200 projects that applied for interconnection before October 2021. That means that most of the roughly 1,250 projects that filed for interconnection after that date will be stuck in limbo for more than three years.

And that’s not counting the flood of newer projects likely to enter the queue in the next few years, which will also have to wait for PJM to complete its reforms before they can be considered. This chart from NRDC’s report shows how the growth in demand for new clean energy is expected to outpace the scope of interconnection capacity that PJM is projected to achieve from now through 2028.

Unless PJM can significantly expand its interconnection capacity, ​“ultimately, states without adequate resources already in the interconnection queue to meet near-term demand may be forced to delay goals, procure energy from other sources, or find other creative means” to meet their targets, the report states.

Susan Buehler, PJM’s chief communications officer, said in an email that the grid operator plans to study the interconnection of more than 200,000 megawatts of power projects seeking to connect to the system by 2026. She also noted that about 45,000 megawatts of projects that completed their interconnection process have yet to be completed for other reasons — a nod to the fact that not every project applying for interconnection has the wherewithal to be financed or get built.

PJM ​“will continue to work constructively with all of our stakeholders, including the NRDC, to go even faster. Reliability remains our focus,” Buehler said.

Ammann said that NRDC and other clean energy stakeholders are ​“crossing our fingers” that PJM’s interconnection reforms will enable the grid operator to process its existing backlog quickly enough to reopen its queue to the growing amount of clean energy expected for the region.

But she highlighted that ​“if you’re barely meeting the RPSs,” or renewable portfolio standards, of the states in the region, ​“that’s a big warning sign.” 

PJM’s interconnection logjam: A snapshot of a nationwide problem

NRDC’s report is only the latest in a long and growing list of studies drawing attention to the problems that lack of transmission grid capacity and interconnection backlogs are causing. Data collected by Lawrence Berkeley National Laboratory shows that wait times and interconnection costs have exploded as the amount of clean energy waiting to interconnect to the nation’s grid has ballooned over the past five years.

LBNL’s analysis indicates that the costs imposed on clean energy and battery project developers seeking to interconnect to PJM’s grid from 2020 to 2022 have doubled compared to the prior 20 years. That’s largely because more and more projects are being asked to pay for ​“broader network upgrade costs,” or the costs of upgrading parts of the transmission grid well beyond the point where they’re actually connecting to it.

One big reason for these rising costs is that utilities have been investing less in the large-scale grid buildouts needed to absorb more clean energy. Most of the investments in U.S. transmission grids over the past decade have gone to upgrades or smaller-scale projects, not larger-scale projects. In fact, DOE data shows that the growth of the U.S. transmission grid has slowed from an average of 2,000 miles per year between 2012 and 2016 to just 700 miles per year from 2017 to 2021, even as spending has increased.

That divergence has manifested itself in PJM territory, according to a March analysis from think tank RMI. (Canary Media is an independent affiliate of RMI.) That analysis found that spending on new transmission lines in PJM has decreased 67 percent since 2014, even as investment in upgrading existing lines has risen. It also found that 71 percent of transmission investment since 2014 has been directed toward lower-voltage lines, rather than the higher-voltage ​“backbone” transmission corridors that enable large-scale additions of clean energy.

Upgrading existing lines and building lower-voltage lines tend to take less time and face fewer regulatory and legal challenges than larger and higher-voltage projects, noted report author Claire Wayner, an associate with RMI’s Carbon-Free Electricity Program. These fixes also tend to be more profitable for utilities than larger-scale projects that can be subject to competitive bidding and greater regulatory scrutiny.

“If the current trends in PJM continue, the nation’s largest grid operator might continue to build and support a grid of the past without proactively planning for a grid supporting a decarbonized future,” she states in the analysis.

Looking for short-term and long-term fixes

Building up transmission to expand grid capacity for new clean energy will take years, but the work required to make it possible needs to start now, Wayner said in an interview. One hopeful development is PJM’s recent launch of a new department tasked with studying what kind of long-term transmission growth will be needed to manage a low-carbon and high-electrification future.

This kind of long-range planning from other grid operators in the Midwest and Texas has led to large-scale transmission buildouts that have allowed gigawatts of clean energy to come online. Similar efforts could be vital for PJM to plan ahead for the transmission needed to enable the massive offshore wind plans of member states like Maryland and New Jersey. It could also help Illinois — a state with ambitious clean energy goals whose power grid and energy markets are divided between PJM in the north and another grid operator, Midcontinent Independent System Operator, in the south — expand transmission to access clean energy resources from beyond its borders and share in-state resources with neighboring states.

PJM and other grid operators can take more immediate steps to ease interconnection bottlenecks as well, said Katie Siegner, a manager with RMI’s Carbon-Free Electricity program. Those could include fast-tracking interconnection processes for projects meant to replace coal-fired power plants that are closing across PJM’s region, potentially by using those plants’ existing grid interconnections, she said.

PJM could also encourage or mandate that transmission-owning utilities make more use of ​“grid-enhancing technologies” such as dynamic line rating systems or advanced transmission cables that can ​“quickly expand capacity on the existing system while new transmission is being built,” she said.

But Tom Rutigliano, senior advocate at NRDC’s Sustainable FERC Project, emphasized that interconnection reforms and short-term steps to increase the capacity of existing transmission ​“can only get you so far.” For a more lasting solution, PJM needs to ​“look at long-term transmission planning.”

One reason that PJM has not yet done this is that big, strategic buildouts of transmission lines tend to be driven by demand from states within the service territory of individual grid operators, and PJM ​“hasn’t really gotten its states to agree to a long-term vision for planning.”

“You have some aggressive clean-energy states in PJM, and you have some coal states,” he said. 

The Federal Energy Regulatory Commission, which regulates a group of grid operators including PJM that together deliver electricity to about two-thirds of the U.S. population, is in the midst of crafting reforms to address grid congestion problems. One effort is aimed at reducing the interconnection delays and uncertainties that have created yearslong backlogs across the country. The other is targeted at setting requirements for grid operators to engage in long-range transmission planning of the kind NRDC and many other clean-energy advocates are calling for.

After PJM won FERC approval for its interconnection reform last year, Rutigliano wrote a blog post setting out steps that FERC could take to push PJM toward a more proactive stance on building out its grid. Those included setting deadlines for interconnection reviews, giving clean-energy developers more information on where grid capacity exists, and incorporating state plans for clean energy, electric vehicles and electric building heating into long-range planning.

Building transmission is expensive, and many consumer advocates and state regulators have pushed back against proposals to speed its construction out of fear that those costs will further burden the customers who pay for them in the form of increases on their utility bills.

But Casey Roberts, senior attorney with the Sierra Club’s Environmental Law Program, pointed out that replacing coal- and fossil-gas-fired power plants with cheaper wind and solar power can lower energy costs for customers. Likewise, building more transmission to accommodate that new clean power can reduce the costs created by existing power grid congestion, which prevent cheaper renewable electricity from reaching places that could use it.

“Consumers are going to be paying the cost of drawn-out, overly expensive interconnection under the status quo,” she said. ​“One of the potential benefits of a more forward-looking, comprehensive approach is that you can bring more efficiency to the process.”