Like anyone in construction, renewable energy developers are all too familiar with process hurdles and delays. But patience wears thin. In the vast PJM Interconnection region stretching from DC to Illinois, a huge pool of solar, wind, and battery storage projects are stuck in the grid operator’s Interconnection queue, often waiting years for technical and cost studies and final approvals needed to connect to the grid. This usually behind-the-scenes issue moved to center stage this month when PJM proposed a dramatic step: a two-year pause on formally accepting new interconnection applications so that the grid operator can focus on speeding up delayed projects and clearing some of the backlog. That pause will come with much needed improvements to PJM’s processes to speed up future interconnection requests. Those improvements won’t solve all the problems with PJM’s interconnection process, but they are a good start, and they can’t come soon enough.
The pause on accepting new applications — an unusual action — speaks to the severity of the current situation. In one recent renewable industry sector survey, nine in 10 developers named long interconnection timelines and high costs as the biggest barrier to the Department of Energy’s goal of 40% solar by 2035. A look at data from PJM’s New Service Queue (i.e., its waiting list for interconnection) reveals just how long projects are waiting for interconnection, as well as the rate of attrition – how many projects that entered the queue are being withdrawn, never getting a chance to put a shovel in the ground.
Currently, developers have more than 2,000 solar, wind, battery storage and hybrid (solar plus storage) projects waiting for approval in the PJM interconnection queue, totaling nearly 300 GW of generating capacity. If the projects could be built, they’d generate power for 68 million homes and support approximately 1.7 million jobs.
In Pennsylvania, for example, developers have more than 13 GW of solar power waiting in the queue, projects that together would create nearly 45,000 direct jobs. In Ohio, there are more than 200 solar projects on deck, enough to power 5.6 million homes and create nearly 100,000 jobs. In Illinois, the combination of wind, solar, hybrid and storage projects in the PJM interconnection queue could power nearly 10,000 homes and support nearly 220,000 jobs. And in New Jersey, the queue holds the potential for more than 200,000 jobs.
While solar predominates region-wide in sheer numbers of pending projects, battery storage projects aren’t far behind in terms of capacity – nearly 75 GW across the PJM region.
See here for a full breakdown of clean energy projects active and withdrawn in the PJM interconnection queue state-by-state and region-wide, with estimates for jobs impacts and homes that could be powered.
All 2,274 projects waiting for an interconnection agreement in the PJM interconnection queue have been waiting for a year or more. One third (758 projects) have been waiting more than 500 days, 22% (497 projects) have been stuck for more than two years, and 166 projects have been waiting more than three years.
For a sense of how long it should take, consider that in the neighboring Midcontinent Independent System Operator (MISO) region the grid operator is working to reduce its timeline for an interconnection agreement from 505 days down to 373 days.
The headwinds caused by these time lags in interconnection have real-world impacts, including renewable energy developments that fall by the wayside. Projects can fall out of an interconnection queue for a range of reasons, but developers say that the long wait to connect to the grid, along with uncertainty around timelines and eventual costs to connect, are often project-killers.
Over the past five years, developers have withdrawn more than 1,000 clean energy projects from the PJM interconnection queue. That includes over 77,000 MW worth of solar, wind, and battery storage projects that could have powered more than 18 million homes and created 400,000 jobs.
Virginia, Pennsylvania, and Ohio stand out as states in the PJM region that have lost the greatest energy and job potential due to lapsed projects. Virginia tops the list, with developers in the Commonwealth shelving at least 225 projects since 2016. Those projects could have powered more than 100,000 homes and created more than 18,000 jobs.
Lots could be done to streamline and speed the interconnection process. Solutions include setting deadlines for necessary studies, clustering projects to be studied at the same time rather than one by one, holding entities accountable for completing work on time, and requiring higher non-refundable deposits to ensure projects have commercial viability. In addition, proactively planning and building the grid to overcome constraints that stymie clean energy interconnection, such as the lack of existing transmission infrastructure in resource-rich regions, and fairly allocating the costs of transmission to all customers who benefit rather than just the interconnecting generator, can also help resolve interconnection challenges. The economics are already there on the competitiveness and affordability of solar, wind, and battery storage – the sheer volume of advanced energy projects waiting in the PJM interconnection queue is testimony to that. Now PJM and its grid need to catch up.
A measure of help is on the way. After lengthy negotiation and debate, PJM’s stakeholder task force has reached agreement on interconnection process reforms that, if approved by the Federal Energy Regulatory Commission (FERC), will begin to set the region on a path to resolving these grid connection delays and barriers. FERC itself has also initiated a broader proceeding aimed at resolving generator interconnection challenges, where AEE has offered comments on best practices (like cluster studies, giving generator interconnection customers more options to speed construction of system upgrades needed to accommodate their projects, and “readiness” criteria to stay in the interconnection queue) that FERC should consider requiring in all regions.
PJM’s proposed process reforms are not a panacea, to be sure, and the planned pause in accepting new applications speaks to the additional work that needs to be done on these issues even after FERC acts on the proposed reforms. But for advanced energy companies looking to bring low cost clean energy to PJM customers and create jobs in the PJM states, progress is welcome.