Getting Renewable Energy Connected

There are about 1,300 gigawatts (GW) of new resources—primarily renewables and storage—waiting to connect to power grids across the country. That’s more than the combined output of all power plants operating in the United States today. The Federal Energy Regulatory Commission (FERC) blames the backlog on rules, put in place more than a decade ago, that made it easy for small numbers of large power plants to connect to the grid but made it difficult for large numbers of smaller wind and solar projects to do the same. The result is gridlock: Projects now face an average delay of nearly four years just to get connected.

Beyond slowing the clean energy transition, interconnection gridlock is threatening reliability. This summer, the Midwest faced a heightened risk of blackouts due to a supply shortfall that could’ve been filled if only a fraction of the projects stuck in limbo had been online. Luckily, we made it through the summer without major incident, but no one should be complacent—new supply is urgently needed. Fossil fuel dead-enders complain that we’re shutting down dirty power plants too quickly. In reality, the clean energy to replace them is ready and waiting, stuck in utility bureaucracy.

If new solar, wind, and storage resources can’t get connected, the transition to clean energy will slow, states will fail to meet their climate targets, and everyone will pay more than they need to for power. The historic incentives for renewable energy in the Inflation Reduction Act make fixing this even more urgent. Parts of the country that don’t get their interconnection house in order risk missing out on the estimated $800 billion in investment driven by the new climate law. Our inability to connect new resources to the grid is emerging as one of the real obstacles to the clean energy transition.

In a bid to keep pace with the surge of renewable energy projects, FERC has undertaken a major rulemaking designed to help clear the interconnection backlog. “As the resource mix rapidly changes, the commission’s policies must keep pace,” FERC said in a June press release announcing the proposed reforms. These “reforms [will] ensure that interconnection customers can access the grid in a reliable, efficient, transparent, and timely manner.”

We are pushing FERC to enact strong standards so that transmission owners act on the hundreds of renewable energy projects waiting to get built and begin delivering energy to the grid. It’s long past time to speed up these connections, and this rule is much better later than never. Grid operators are also making some progress on interconnection reform, which we support. But these are only the first steps. For example, even if grid operator PJM’s proposed reforms work exactly as designed, it’s still not clear that PJM will be able to connect new generation quickly enough to replace output from retiring coal plants, satisfy the higher energy demands of an electrifying economy, and meet state clean energy goals.

Even when it works, the current system promotes a piecemeal approach that is a poor way to plan and pay for the upgrades our power grid needs. The root cause of interconnection delays is that we still don’t plan for future needs. Right now, grid upgrades are done one by one as projects are proposed, kind of like rewiring your house every time you get a new appliance. The reforms FERC is working on would “cluster” groups of projects and plan upgrades in a batch. So it’d be like buying all of your appliances once a year and rewiring your house then—a better system, but still not good. What we need is the painfully obvious solution: a plan for future needs.

That’s why interconnection reforms on their own can only be a partial solution. To have any hope of getting clean energy built as fast as we need it, FERC must make transmission planning work. As part of its major proposed rulemaking on transmission planning, FERC needs to mandate that we actually prepare for the future by looking at what changes we can reasonably expect in both the supply of and demand for electricity. Our current transmission process is dominated by special interests and focuses more on protecting utility investments than on actually preparing us for the future. That must change.

In addition to reforms being weighed by FERC, there are other tools that Congress, regional grid operators, states, and the U.S. Department of Energy (DOE) can deploy to accelerate the pace of new transmission, which is needed to get more renewable energy onto the grid:

• Congress can establish a tax credit for transmission that could spur $30 billion in investment and bring 30 GW of renewable energy onto the grid. Given the broad support for transmission in Congress, lawmakers should regroup and approve this tax credit in the coming months.
• Using its current statutory authority, the DOE needs to identify high-priority national transmission corridors necessary to help meet consumer and clean energy goals. The 2020 bipartisan infrastructure law and the 2022 Inflation Reduction Act give the DOE new loan, grant, and other financing authorities to spur high-capacity transmission. The DOE should move quickly to implement these authorities. It can also spur offshore wind development by working with states and regional transmission organizations in the East to identify the transmission needed to integrate offshore wind.
• States can work cooperatively with transmission providers to develop projects that support their clean energy goals. The collaboration between PJM and New Jersey shows us that this approach can work. Other studies show that regional planning can slash the cost of upgrading the grid to handle large amounts of renewable power. Even the oil-rich state of Texas found that those upgrades pay for themselves by giving more people access to low-cost renewable power.

There’s so much that can be accomplished to bring clean energy onto the grid, even under current law, starting with clearing the backlog in the interconnection queue and issuing an aggressive transmission planning order. The momentum for clean, lower-cost energy is tremendous, but it will stall out if the grid is small and weak. The ball is now squarely in FERC’s court with assists needed from DOE and states.