It’s hard to connect clean power to the grid. New software can help

The biggest near-term barrier to U.S. clean energy goals isn’t the cost of clean energy technologies or getting the permits to build them. It’s the massive backlog of new clean energy projects already waiting to connect to the grid that’s threatening to put the country’s decarbonization goals out of reach.

Solving the root causes of those interconnection problems — and expanding a transmission grid that isn’t growing fast enough to accommodate all the clean energy being planned — will take years.

But in the meantime, clean-energy developers are looking for every opportunity available to get more mileage out of the existing grid. One emerging method: using software to help them find which parts of the grid have room for new projects — and estimate how much they can expect to have to pay to upgrade the grid if that headroom is used up.

Over the past few years, software developers with deep experience in the world of utility and grid-operator interconnection studies — the dizzyingly complex and constantly changing calculations that determine grid hosting capacity and upgrade costs — have started to apply their expertise to helping clean-energy developers.

Some of these software platforms initially were designed to help utilities and grid operators perform those tasks faster and with more precision, while others were designed from the ground up with developers in mind. In either case, they’re taking a more modern software approach to an increasingly complicated set of grid calculations that legacy software platforms can struggle to solve.

Grid operators and utilities are slowly and cautiously starting to use these more modern software approaches to manage their own hefty interconnection bottlenecks. But clean-energy developers are eager to find solutions to their interconnection challenges as quickly as possible — making them a natural target market for these new software providers.

It’s hard to assess their long-term impact on easing the bottlenecks holding back clean energy growth, but these platforms are now getting a lot of traction among developers desperate for more insight into the grid challenges that can make or break their projects.

Here’s a look at two of the startups leading in this space.

Nira Energy: Prospecting the best grid sites for clean energy

Nira Energy, a Denver-based startup founded in mid-2021, offers one example of the rise of a software-driven approach to boosting grid capacity.

Since the company was created, more than 50 clean-energy developers and other customers have used its software to process over 300 gigawatts’ worth of clean-energy interconnection requests, according to CEO and co-founder Chris Ariante.

The company is ​“trying to help developers find the best locations on the grid — the most economical locations for new wind and solar projects,” Ariante said. It does that by ​“shadowing” the interconnection-study processes run by large grid operators such as the Midcontinent Independent System Operator (MISO), which operates the grid in all or part of 15 Midwestern states and in Canada’s Manitoba province.

That yields a data set on available grid capacity and associated interconnection costs down to individual points on the grid — data that can serve as a starting point for developers prospecting for suitable new locations.

Today, most developers start by identifying promising pieces of land to develop, which can take months, he said. Then, they hire consultants to study the cost of connecting to the nearby grid, which can take weeks and cost tens of thousands of dollars.

“With Nira, we’ve kind of flipped that prospecting process on its head,” he said. ​“We’ll give you a map of the entire MISO system, down to the substation — and you’ll know which sites are good and which sites are bad. So you’re cutting back all the time that developers were wasting trying to find land in places where you can’t interconnect,” he said. Instead, ​“now you’re trying to find the land positions around the 15 or 20 sites that are attractive.”

That can save developers a lot of time and money spent on prospecting work — a perspective backed up by testimonies from developers like AES cited on Nira Energy’s website.

Ariante and co-founder Andrew Martin previously worked at Smart Wires, a company that makes hardware that controls power flows on transmission lines — another grid-enhancing technology that experts say has high potential, if only utilities would adopt it.

In their time assessing the potential of Smart Wires’ technology to help ease grid congestion, Ariante and Martin ​“ran about 2 to 3 gigawatts’ worth of the equivalent of interconnection studies. As part of that, I got very familiar with the various systems — and we kept seeing developers submit projects where we knew there was $100 million in upgrades” that would be necessary before they could interconnect.

But ​“it was very hard for developers to get their hands on that information,” he said. The grid-operator studies that end up determining upgrade costs can take years to yield results, he noted. And those studies are increasingly saddling project developers with costs that can add up to half or more the total cost of the project itself, forcing an increasing number of them to be abandoned.

Nira Energy’s pitch is that its software can provide developers with fairly accurate predictions of how these slow-moving studies will shake out. The company bases its predictions on a power-flow model obtained directly from MISO, which it updates regularly as the power system changes.

“Getting that from them is not super easy — you need certain clearances; you need to be working on behalf of market participants,” Ariante said. ​“But because we’re from that space and work with developers, we can get our hands on that underlying data.”

Nira Energy’s software can’t mimic the complete range of studies run by grid operators like MISO and the utilities operating large-scale transmission networks, he noted. But the visibility it can offer into the front end of that process is still much better than what developers were previously able to get.

That value has allowed the startup to grow largely via revenue from customers such as AES, Cypress Creek and Doral Renewables, along with a $500,000 funding in 2022 from seed investor Y Combinator, he said. While he wouldn’t disclose the full list of customers using the software, ​“I’d say five of the 10 biggest developers in the country, in terms of megawatts deployed, are customers — and we’re in discussion with pretty much the rest” of the largest, he said.

It’s too early to say how the increased visibility that Nira provides its customers might alter the broader interconnection bottlenecks now afflicting clean-energy developers. Those impacts will only reveal themselves ​“as fast as these projects can move through the queue,” he noted.

But as more developers are able to pinpoint grid interconnection points with greater likelihood of successful interconnection, the number of failed projects should decrease, he said. Greater visibility should also allow developers to reduce the duplicative requests they’re now making in hopes of discovering the points on the grid they can afford to interconnect to — a ​“shotgun” approach that in itself is adding to the backlog of projects that utilities and grid operators must process, he pointed out.

“When we look at the number of gigawatts in our customer base, you’re having a pretty material influence,” he said. ​“As these things fully get through, you’ll have the picture in a few years.”

Pearl Street Technologies: Forecasting project interconnection costs from start to finish

While Nira Energy has positioned itself as a tool to get the interconnection process started, David Bromberg, CEO of Pittsburgh, Pennsylvania–based Pearl Street Technologies, thinks of his company’s software as a way to optimize projects once they’ve actually entered the interconnection queue.

Since its 2018 spinout from Carnegie Mellon University, Pearl Street has mostly worked with transmission grid operators like Southern Company and Midwest grid operator Southwest Power Pool to help them speed and streamline their interconnection-study processes. But this summer, Pearl Street launched its Interconnect platform aimed at providing a similar service for clean-energy developers.

“It’s a what-if platform that allows developers to run interconnection studies at scale and see how changes in assumptions — such as which projects in an interconnection queue will withdraw — impact your project,” Bromberg explained.

That process extends well beyond initial interconnection cost assessments, he noted. As projects move through a grid operator’s multistep process to receive final interconnection agreements, they must contend with changes to the underlying grid and other projects being added to or dropping out of contention, as shown in this graphic.

Like Nira Energy, Pearl Street mirrors the approach of traditional software platforms from major corporate players, such as Siemens’ PSS®E and General Electric’s PSLF, widely used by grid operators and utilities across the country. But those platforms were initially designed when utilities were adding a relative handful of new fossil-fueled projects per year to the grid, not hundreds or even thousands of smaller-scale wind and solar projects.

Using these software platforms in today’s much more complex environment can take weeks of transmission planners tweaking models, experimenting with adding new facilities and adjusting settings to see what works, Bromberg said. In some cases, these legacy software platforms may fail to completely ​“solve” for those variables, in fact, forcing grid engineers to ​“brute-force” their way to a satisfactory result, grid expert Jay Caspary told Canary Media last year.

Pearl Street’s novel mathematical approach to those challenges, developed with support from the Department of Energy’s ARPA-E program and the National Science Foundation, can cut the time it takes to solve these complex modeling challenges to hours, as attested by grid engineers from Midcontinent Independent System Operator and Southwest Power Pool.

Its Interconnect platform is essentially performing the same tasks for project developers, Bromberg said. ​“It creates the power-flow models, runs the impact analysis, identifies upgrades and cost-allocates them, all according to an [independent system operator’s] published methodologies.”

This doesn’t replace the studies that individual grid operators and utilities perform, he cautioned. But it is ​“a way to get most of the way there very quickly, to get a reasonable expectation of your interconnection results, in hours versus weeks and months.”

These near-real-time assessments become particularly valuable at moments when developers have to make decisions that can come with millions of dollars of costs, such as committing to the earnest payments required to move on to the next step in an interconnection process, Bromberg said. Waiting weeks for modeling results doesn’t work ​“if you have 15 business days to make a decision on whether to withdraw or move forward,” he said.

Pearl Street has raised more than $2.8 million from investors including Powerhouse Ventures, Incite Ventures, VoLo Earth and Pear Venture Capital. Bromberg declined to name the developers using its Interconnect platform, but he said that several companies have used it to support decision-making for active projects at key decision points.

“I don’t think you’d find it surprising that 99 percent of developers point to interconnection as their No. 1 headache these days,” he added. ​“It is the project killer.” Software that can reveal the range of costs that a developer can expect to bear throughout the interconnection process can spell ​“the difference between a project and no project,” he said — but ​“it can take years to realize that value.”