The main challenges in reducing the time projects spend in interconnection queues stem from several interrelated factors involving technical, procedural, and financial complexities:
1. Rapid Growth and Diverse Resource Characteristics
- A surge in the number of new generation projects, particularly renewable energy resources with differing technical characteristics, has overwhelmed existing interconnection procedures. This growth has created significant backlogs and increased uncertainty around costs and timelines for connecting to the transmission system.
2. First-Come, First-Served vs. First-Ready, First-Served Queue Management
- Traditional serial queue processing (first-come, first-served) slows progress because early applicants may not be ready or viable, causing delays for others. Transitioning to a “first-ready, first-served” cluster study approach, where projects that are more prepared move forward faster, helps improve efficiency but requires systemic reforms and coordination.
3. High Interconnection Costs and Network Upgrades
- High costs associated with network upgrades needed to integrate new projects often lead developers to withdraw their applications. This withdrawal can cause cascading negative effects on other projects in the queue, further delaying progress and development of renewables. For example, in PJM, mean interconnection costs for withdrawn projects were more than double the costs for active projects ($599/kW vs. $240/kW).
4. Complex and Lengthy Multistep Interconnection Studies
- Every project must undergo multiple detailed studies assessing its impact on the grid’s reliability and operation. These studies are time-intensive and require substantial coordination among developers, grid operators, and regulators. The cumulative effect of these studies contributes significantly to the lengthy queue times, which have grown from less than 2 years in 2008 to 5 years in 2023 for completed projects.
5. Institutional and Procedural Challenges
- Existing institutional processes have struggled to keep pace with the volume and complexity of requests. Although reforms like FERC Order 2023 mandate more stringent readiness criteria, higher deposits, stricter timelines, and penalties to motivate faster processing, full implementation is ongoing and inconsistent across regions.
6. Reliability and Resource Adequacy Concerns
- Delays in interconnection not only slow down project completion but also raise concerns about grid reliability and meeting demand, especially as large amounts of coal capacity retire. Interconnection queues alone cannot address resource adequacy without faster throughput and more efficient planning.
Summary
Reducing interconnection queue times involves overcoming:
- Backlogs driven by rapid growth in variable renewable energy projects,
- Transitioning queue management from first-come to first-ready prioritization,
- Managing high upgrade costs to prevent cascading project withdrawals,
- Navigating complex and time-consuming multi-stage technical studies,
- Implementing institutional reforms for stricter and more effective processes,
- Addressing broader grid reliability and resource adequacy challenges tied to delays.
Reforms initiated by FERC and grid operators like PJM and MISO, including clustered study approaches and increased transparency tools for developers, aim to tackle these challenges, but widespread and consistent application is still required to significantly reduce queue times.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-challenges-in-reducing-the-time-projects-spend-in-interconnection-queues/
