Please Hold While the Operator Connects You: Solving Clean Energy’s Purgatory
September 26, 2024 by Aidan Bassett
To address the transmission interconnection queue, regulators should have new powers, a modern study process, and a central role in planning the future of transmission.
The future of America’s power is on hold. Actually, it’s stuck waiting in line.
Some 2.6 terawatts of proposed electricity generation projects and energy storage facilities[1] are stuck in a regulatory purgatory called the “interconnection queue.”[2] For context, the United States has about 1.3 terawatts of power generation capacity today.[3] So why are projects worth twice the country’s total power capacity waiting to be connected to the electrical grid?
The first reason is that the power grid, despite being a vast network of metal, is quite fragile. We can’t just push more power over this overburdened, unreliable, aging infrastructure. We have too few big power lines (called transmission) to move our electricity around,[4] meaning our current power demand strains the lines we do have, creating the costly problem of grid congestion.[5] We must also keep the grid’s wires humming at a constant frequency,[6] which . Among other reasons, these issues are why the operators of the grid are required to carefully study the impacts of allowing new power generation onto the grid.[7]
Second, that study process — and the interconnection process as a whole — is slow, reactive, and no longer fit for purpose. In the years ahead, experts expect demand for electricity to grow at the fastest rate in decades.[8] As power generators clamor to get onto the grid, the interconnection queue backlog becomes self-reinforcing as long-delayed projects drop out, forcing studies to start over.
To address these issues, the Federal Energy Regulatory Commission (FERC) has recently begun to implement a more efficient approach via Order 2023 wherein groups of projects are studied in order of project readiness.[9] Order 2023 also spreads costs across study groups, increases study deposits and withdrawal fees, strengthens study deadlines, and requires consideration of alternative transmission technologies.[10]
These reforms improve upon the old method of studying projects one by one in the order they entered the queue, but it remains insufficient. Why? Because U.S. energy regulators today are essentially reactive and laissez-faire. Simply adopting a more efficient but equally reactive regime does not meet the moment.
It is time for a generational shift[11] in American power sector regulation. Regulators must be proactive, preparing our grid infrastructure for increased power demand, the intensifying climate crisis, and new forms of electric generation. Indeed, meeting these challenges will require regulators to take center stage, maximizing efficiency by centralizing the work of expanding and modernizing our power infrastructure.
First, Congress should empower FERC to plan and site all interstate transmission. Under Section 7 of the Natural Gas Act of 1938, FERC may empower natural gas pipelines with robust eminent domain authority, accelerating the siting of such pipelines.[12] FERC should have equivalent authority to ease siting of electric transmission. FERC should also be charged with anticipating where new renewable generation is likely to be developed and ensuring the development of transmission to serve such locations. Doing so would put FERC’s proactive planning front and center, as the Public Utility Commission of Texas was in the late 2000s under the state’s successful Competitive Renewable Energy Zone initiative, which led to the construction of more than 3,600 miles of high-voltage transmission over 12 years.[13]
Second, the interconnection study process should be as automated as possible. Experts recommend transitioning this surprisingly manual process to take advantage of rapidly improving software for modeling the impacts of interconnection.[14] As with many aspects of the electric grid, the study process itself is stuck in a less digital era, and it’s time to make use of advances in machine learning and predictive modeling. Here, FERC and state utility regulators could adopt criteria for identifying new best practices in conducting interconnection studies in the future as technology continues to progress.
Third, FERC should create a fast-track process for most-ready projects that can replace the retiring generation.[15] While building new transmission will help to add far-flung renewable generation to the grid, FERC could create an incentive for optimal use of existing transmission by accelerating timelines for projects whose generation profile could operate similarly to an outgoing power plant (for example, projects to build solar with storage could have generation profiles akin to some gas plants).
Many other reforms could follow in this vein, but these three epitomize the changes needed: empowering regulators to be proactive and level the playing field between electric generation and gas; modernizing all aspects of the interconnection process, especially via automation; and creating a most-favored, highest-readiness category to clear out the queue as fast as possible. When in doubt, Congress, courts, and FERC itself should err on the side of maximizing FERC’s authority and deferring to its leadership on the complex and vital work of planning out the future of the grid.
A transmission system without deadlines guarantees a graveyard of dead lines, and the U.S. has no time to lose in preparing its grid for the surge of renewable generation we need to mitigate power sector emissions and supply the demand of decades to come.
[1] Roughly 2.5 terawatts of this total is renewable energy and energy storage projects. Grid connection backlog grows by 30% in 2023, dominated by requests for solar, wind, and energy storage, Lawrence Berkeley Nat’l Lab’y (Apr. 10, 2024), https://emp.lbl.gov/news/grid-connection-backlog-grows-30-2023-dominated-requests-solar-wind-and-energy-storage.
[2] Lawrence Berkeley Nat’l Lab’y, Queued Up: 2024 Edition 3 (2024), https://emp.lbl.gov/sites/default/files/2024-04/Queued%20Up%202024%20Edition_R2.pdf.
[3] Electricity explained, U.S. Energy Info. Admin., https://www.eia.gov/energyexplained/electricity/electricity-in-the-us-generation-capacity-and-sales.php (last visited Sept. 21, 2024).
[4] See Aidan Bassett, Transmission Now!, Geo. Env’t L. Rev. (Apr. 2, 2024), https://www.law.georgetown.edu/environmental-law-review/blog/transmission-now/; Richard Schmalensee, Crossed Wires: Modernizing the US Electric Grid, Resources (May 16, 2024), https://www.resources.org/archives/crossed-wires-modernizing-the-us-electric-grid/.
[5] Richard Doying, Michael Goggin, & Abby Sherman, Grid Strategies, Transmission Congestion Costs Rise Again in U.S. RTOs (2023).
[6] Paul Denholm et al., Nat’l Renewable Energy Lab’y, Inertia and the Power Grid: A Guide Without the Spin (2020), https://www.nrel.gov/docs/fy20osti/73856.pdf.
[7] Interconnection 101, Am. Clean Power (2023), https://cleanpower.org/wp-content/uploads/gateway/2023/06/ACP_Interconnection_FactSheet_0623.pdf.
[8] John D. Wilson & Zach Zimmerman, Grid Strategies, The Era of Flat Power Demand is Over (2023), https://gridstrategiesllc.com/wp-content/uploads/2023/12/National-Load-Growth-Report-2023.pdf.
[9] Improvements to Generator Interconnection Procedures and Agreements, Order No. 2023, 88 Fed. Reg. 61014 (Nov. 6, 2023) (to be codified at 18 C.F.R. pt. 35); see also Explainer on the Interconnection Final Rule, Fed. Energy Reg. Comm’n, https://www.ferc.gov/explainer-interconnection-final-rule (last visited Sept. 21, 2024).
[10] “Alternative transmission technologies” is a term that encompasses grid-enhancing technologies, which help make the most efficient use of the available transmission — meaning less transmission may be needed overall. See Bassett, supra note 4.
[11] No pun intended.
[12] 15 U.S.C. § 717f.
[13] Olivera Jankovska & Julie A. Cohn, Baker Inst. for Pub. Pol’y, Texas CREZ Lines: How Stakeholders Shape Major Energy Infrastructure Projects (2020), https://www.bakerinstitute.org/research/texas-crez-lines-how-stakeholders-shape-major-energy-infrastructure-projects.
[14] Rob Gramlich et al., Grid Strategies & the Brattle Group, Unlocking America’s Energy: How to Efficiently Connect New Generation to the Grid 66-67 (2024), https://advancedenergyunited.org/hubfs/2024%20Folders/2024%20-%20Reports/Unlocking%20Americas%20Energy%20How%20to%20Efficiently%20Connect%20New%20Generation%20to%20the%20Grid.pdf.
[15] Id. at 40-42.