New Wind and Solar Energy Projects Are Now Overwhelming America's Antiquated Electrical Grids
So many projects are trying to squeeze through the approval process that delays can drag on for years, leaving some developers to throw up their hands and walk away.
More than 8,100 energy projects — the vast majority of them wind, solar and batteries — were waiting for permission to connect to electric grids at the end of 2021, up from 5,600 the year before, jamming the system known as interconnection.... PJM Interconnection, which operates the nation's largest regional grid, stretching from Illinois to New Jersey, has been so inundated by connection requests that last year it announced a freeze on new applications until 2026, so that it can work through a backlog of thousands of proposals, mostly for renewable energy.
It now takes roughly four years, on average, for developers to get approval, double the time it took a decade ago. And when companies finally get their projects reviewed, they often face another hurdle: the local grid is at capacity, and they are required to spend much more than they planned for new transmission lines and other upgrades. Many give up. Fewer than one-fifth of solar and wind proposals actually make it through the so-called interconnection queue, according to research from Lawrence Berkeley National Laboratory. "From our perspective, the interconnection process has become the No. 1 project killer," said Piper Miller, vice president of market development at Pine Gate Renewables, a major solar power and battery developer....
A potentially bigger problem for solar and wind is that, in many places around the country, the local grid is clogged, unable to absorb more power. That means if a developer wants to build a new wind farm, it might have to pay not just for a simple connecting line, but also for deeper grid upgrades elsewhere.... These costs can be unpredictable. In 2018, EDP North America, a renewable energy developer, proposed a 100-megawatt wind farm in southwestern Minnesota, estimating it would have to spend $10 million connecting to the grid. But after the grid operator completed its analysis, EDP learned the upgrades would cost $80 million. It canceled the project.
That creates a new problem: When a proposed energy project drops out of the queue, the grid operator often has to redo studies for other pending projects and shift costs to other developers, which can trigger more cancellations and delays. It also creates perverse incentives, experts said. Some developers will submit multiple proposals for wind and solar farms at different locations without intending to build them all. Instead, they hope that one of their proposals will come after another developer who has to pay for major network upgrades. The rise of this sort of speculative bidding has further jammed up the queue.
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