The clean energy backlog barely budged this year. What’s the way forward?

When it comes to the existentially important process of connecting new clean energy to the grid, 2023 is ending much as it began: in a literal gridlock.

Despite getting a ton of attention from policymakers — and a major push from federal regulators demanding interconnection reform at the country’s utilities and grid operators — clean energy projects remain stuck behind massive interconnection backlogs that threaten to slow down the transition away from fossil fuels.

Across the country, the amount of wind, solar and battery projects seeking connection to the grid has swelled to more than 2,000 gigawatts — far outpacing the total 1,250 gigawatts of electricity generation capacity of all existing power plants on the U.S. grid today. While only about a quarter of that backlog is ever likely to get built, it underscores both the pent-up demand for what’s become the lowest-cost source of electricity and the problems that are preventing it from being brought online.

Today, clean-energy developers in much of the country can expect to wait more than three and a half years for utilities and grid operators to process their interconnection request, up from about a year in 2015, according to data from Lawrence Berkeley National Lab. In some cases, waits can last even longer. ​“We’ve personally seen interconnection wait times reach up to eight years,” said Thomas Houghton, CEO of solar and energy storage developer Adapture Renewables.

These long wait times are delaying gigawatts’ worth of planned projects from New England to California. The influx of clean energy tax credits created by last year’s Inflation Reduction Act has ​“exacerbated already existing interconnection challenges,” Houghton said, pushing even more projects into queues already filled with projects proposed years ago. In some parts of the country, such as the 13-state region from Virginia to Illinois served by grid operator PJM, interconnection backlogs are now threatening to put the 2030 clean energy targets of many states out of reach.

It’s a problem that needs to be solved as soon as possible if the U.S. is to achieve the Biden administration’s goal of decarbonizing the grid — the country’s single biggest source of carbon emissions — by 2035. Meeting that target would require adding between 40 and 90 gigawatts of solar and 70 to 150 gigawatts of wind every year between now and 2030, according to a 2022 study from the National Renewable Energy Laboratory, a nearly fourfold increase over today’s rates of addition.

Even if project developers can obtain permission to interconnect, they can expect to face steep fees to upgrade the grid to allow their power to flow to where it’s needed. Over the past five years, these costs have ballooned from about 10 percent to between 50 to 100 percent of the cost of the wind or solar farms themselves, according to a 2021 analysis from consultancy Grid Strategies.

Much of the interconnection logjam is due to a slowdown in transmission-grid buildout — it’s hard to add more wind and solar power to a grid that isn’t expanding fast enough to accommodate it. We’ve covered the challenges the country faces if it’s to more than double its current transmission capacity, as multiple studies indicate is needed not just to increase clean energy capacity but also to make the grid more cost-effective and reliable in the face of extreme weather.

But new transmission lines can take up to a decade to build, and many planned grid projects falter in the face of regulatory gridlock and legal challenges. Federal agencies, state lawmakers and regulators are working on ways to streamline the process of building more transmission, but those efforts will take time and will face opposition, grid experts warn.

But that doesn’t mean there’s no progress to be made in the near term. Here are two of the most promising developments from 2023 when it comes to speeding up the interconnection process.

FERC’s bid to move things along 

At the same time as they’ve been pressing Congress and the Biden administration to take more aggressive actions to speed transmission development, clean energy industry groups have been urging action to reform how grid operators and utilities handle the interconnection process itself.

Industry advocacy groups American Clean Power Association, Advanced Energy United and the Solar Energy Industries Association have demanded that federal regulators ​“take immediate steps to fix the acute procedural deficiencies and network upgrade funding problems plaguing the current interconnection process in many regions.”

The Federal Energy Regulatory Commission responded to those demands in July with the approval of Order 2023, ​“the largest and most significant set of interconnection reforms” in the past 20 years, according to FERC Chair Willie Phillips.

FERC Order 2023, the result of nearly a year of work and input from hundreds of stakeholders, demands a lot from both the utilities and grid operators that manage interconnection processes and the energy developers trying to get their projects connected. Each of the parties will face tighter deadlines and the risk of financial penalties for failing to meet them. Grid operators and utilities must start using ​“cluster” study processes that can speed interconnection, rather than studying projects one at a time.

FERC’s order doesn’t create changes overnight, however. The organizations that manage transmission grids that deliver power to about two-thirds of the country’s population are now in the midst of submitting their compliance plans to FERC, and carrying them out could take years.

To understand just how long these changes can take, it’s useful to look at PJM, which in early 2023 launched a reform process meant to unclog its 250-gigawatt interconnection backlog that isn’t expected to be finished until 2026 — and which will freeze ongoing interconnection requests in place until it’s done.

Nor is FERC’s order sure to yield changes to what clean energy developers describe as some of the most frustrating barriers, such as a lack of clear data to help them figure out what parts of the grid to target for faster and cheaper interconnection.

How technology can speed up interconnection 

That’s why an increasing number of clean energy developers are looking for ways to speed interconnection processes while they wait for FERC’s order to be put into action. One valuable set of options involves using technologies that can discover underutilized capacity on transmission grids, like new software platforms that can collect and analyze data to determine which grid locations offer the cheapest interconnection options.

Utilities and grid operators can also use similar software to make better use of the grid as it is today, by crunching enormous amounts of data to determine how to reconfigure transmission networks to reduce congestion and expand capacity. Data and software can also inform dynamic line-rating systems, which allow grid operators to know when power lines can carry more power than their conservative ​“static” ratings would indicate and make use of that headroom.

Other technologies can help expand the capacity of existing grids. FERC Order 2023 highlighted a host of ​“advanced transmission technologies” that grid operators and utilities must include in future grid expansion and interconnection planning, including higher-capacity transmission wires that can increase the amount of power that can flow along existing transmission towers and power-flow control devices that can route power flows to reduce congestion and constraints.

But widespread adoption of these solutions will be tricky. Utilities and grid operators are cautious about adopting new technologies and grid-operations techniques that could threaten safety and reliability. What’s more, under traditional cost-of-service regulations, utilities are incentivized to spend money on building new infrastructure that allows them to earn steady rates of return on capital investments — not to spend money on making their existing grids work more efficiently or make it easier for renewable energy developers to connect to them.

The U.S. Department of Energy is one important player working to alleviate these barriers.

“Updating regulatory and utility business models can address the meaningful misalignment between traditional incentive structures and the needs of a modern grid,” Louisa White, a policy advisor for DOE’s Loan Programs Office, said during a December webinar introducing DOE’s latest research on the topic.

Utilities are regulated at the state level, limiting the power that DOE and other federal agencies have to drive these kinds of changes. But DOE does have money to spend from the grant programs created by 2021’s Bipartisan Infrastructure Law — and some of that money is flowing to projects aimed at reducing interconnection backlogs.

In particular, roughly half of the $3.5 billion in grid grants issued by DOE in October are going to support projects that will help about 35 gigawatts of renewable energy to come online within this decade. The lion’s share of that will come from building new transmission and upgrading existing grid infrastructure. But several projects are deploying dynamic line-rating systems, power-flow controls and next-generation power lines.

“I think we all know that renewables are the least-cost resource across most of the country now, and the current pace of interconnecting renewables…just isn’t sufficient to meet even the market demand, let alone our national climate goals,” Colin Meehan, a project manager with DOE’s Grid Deployment Office, said during a webinar introducing the projects. The projects DOE is funding ​“are going to help address that log jam at different levels.”

DOE is also working with utilities, grid technology companies and research organizations on a program, dubbed Interconnection Innovation e-Xchange (i2X), aimed at developing more sophisticated technological solutions to interconnection problems. The group issued a draft report in May that describes many of the same interconnection problems that FERC has identified and lays out a host of potential solutions.

None of them are necessarily simple or easy to carry out, Ammar Qusaibaty, a DOE official on the i2X team, said at a November event hosted by the nonprofit group Interstate Renewable Energy Council. ​“The grid that we have today took us 100 years to build the way it is,” he said. Adapting it to meet the needs of a low-carbon, high-renewables future will take coordinated work from ​“all of the players who carry the burden of change when it comes to interconnection.”