Difficulty Connecting to Electric Grid Stalls Renewable Energy Projects
May 28, 2023
New England’s renewable energy transition is getting strung up when it comes to plugging new projects into the electric grid.
A report released earlier this month by the Clean Energy Group, a Vermont-based nonprofit dedicated to renewable energy, shows an alarming number of renewable energy projects have stalled in Massachusetts because of repeated delays and surprise costs when it comes to connecting projects to the electric grid.
The point of interconnection, the key component in any new solar array, wind facility or energy-storage project, is where energy generated is distributed back into the region’s greater electrical grid. But in many places nationwide, and states such as Rhode Island and Massachusetts, new interconnections are handled on a project–by-project basis. Any proposed project is expected to account for the costs of infrastructure upgrades to a local substation, but those costs are entirely dependent on the utility that manages the infrastructure, and they can vary.
“It’s not as simple as just plugging it into the grid and turning the project on,” said Chirag Lala, a researcher for the Applied Economics Clinic, who helped write the report. “The distribution grid has to be able to handle the potential for power to flow both ways, right? Storage projects especially both charge and release power onto the grid.”
As a result, completion rates for projects are low and wait times are increasing. In April, the Berkeley Lab released a study that analyzed the interconnection of new projects into electrical grids nationwide. Only 20% of new projects requesting interconnection between 2010 and 2017 reached operational status by the end of 2022.
The completion rate for renewables is even slimmer; about 20% of wind projects and only 14% of solar projects reached completion by the end of 2022. The average time projects wait to interconnect to the grid has also increased, from less than two years in 2008, three years in 2015, to five years in 2022.
The reason for the delays? Renewable energy has grown exponentially over the past decade, and solar and wind now account for 93% of all interconnection queues nationwide. By the end of last year, Massachusetts had 2,321 megawatts (MW) of solar capacity in its queue, a number that more than doubled compared to 2021.
Larger projects also cost more to interconnect per kilowatt-hour. In the Mid-Atlantic grid controlled by PJM Interconnection, natural gas projects cost on average of $24 per kW, while storage, solar, and offshore wind cost $335, $253, and $385 per kW, respectively.
“Those who are responsible for managing the distribution grid don’t have a financial incentive to actually invest in hosting capacity more regularly,” Lala said. “If you’re in the queue, it actually matters whether you are first, second, third, fourth, or fifth in the queue because if somebody in front of you happens to make upgrades that are useful to your project you will never be responsible for paying for it.”
In total, solar accounts for 60% of the MW found in Massachusetts’ interconnection queue.
But increased demand for interconnections and the increasing costs associated with them mean more and more renewable projects are withdrawing from the process entirely. In 2022, more than 1,600 projects did not finish or withdrew their applications for interconnection, the highest number in five years.
Difficulty getting new renewable projects online means it will be that much more difficult to retire old, fossil fuel-burning power plants.
“There is no entity in Massachusetts and certainly not in other states, that is able to say we anticipate this much distributed energy resources and we want to prepare for this much solar, this much storage, this much hybrid,” Lala said. “We should make these upgrades in advance. That doesn’t happen.”
Nationwide, there are 1.9 million solar, storage, and wind projects waiting in interconnection queues.
Clean Energy Group’s report recommends lawmakers, regulators, and utilities work together more proactively to plan future interconnection points into the system and regularly invest in additional grid infrastructure as needed. The report also outlines three ways to lower costs for these investments, either by grouping projects, having a single organization — such as the utility company — pay for upgrades and be reimbursed after the fact, or passing off the cost of upgrades onto ratepayers.
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