All Dressed Up and Nowhere to Go: A Primer on Connecting Renewable Energy to the Grid
Renewable energy projects face long wait times to connect to the electric grid due to heavy request volume and outdated processes.
About 12,000 solar, wind, and battery storage projects representing nearly 2,500 gigawatts are waiting to connect to the U.S. electric grid, according to the Lawrence Berkeley National Laboratory (LBNL). Not all of those projects are completed, but bringing all that are ready online would substantially boost the clean power generation capacity of the grid.
Don't expect that to happen anytime soon. The pending projects face regulatory, financial, market, and technical hurdles before they can deliver power to the grid. The process presents a threat to the success of some projects. Failure to get timely permission for interconnection to a grid was the second-most common reason for cancellation of solar and wind projects from 2016 to 2023, according to LBNL.
Interconnections to the electric grid is a complicated topic as it touches on nearly all aspects of clean energy generation. What follows is a quick explanation of interconnection and the issues surrounding it. My goal is to provide a basic understanding of interconnection concepts and challenges.
What Are Interconnections?
An interconnection occurs when a distributed energy resource (DER) such as a solar panel installation, battery storage system, or wind farm is connected and delivers electricity to an electric grid. An interconnection can also be the coupling of one or more electric grids, creating a network that is more reliable and flexible. Interconnection among electric grids is not the focus of this article.
What Are the Regulatory Challenges of Connecting Renewable Sources to the Grid?
In the U.S., interconnection requests to grid operators are regulated, typically by each state's public utilities commission, and must meet procedural and technical requirements. Procedural requirements define the obligations and rights of the grid operators and project owners making the request. They also set eligibility standards, application guidelines, and timelines for each step of the process. Cost allocations for any necessary grid upgrades are also defined, and penalties and incentives are designed to make the interconnection request process more efficient.
Technical requirements ensure that the connecting project can work in harmony with the electric grid. Connecting projects, for example, must use the appropriate smart inverter settings and adhere to certain standards. They include IEEE 1547, which defines interconnection and grid interoperability standards, and UL 1741, which defines standards for inverters, converters, controllers, and interconnection system equipment.
Most interconnection regulations were created years ago when there were far fewer requests to connect DERs to the grid. The regulatory processes were designed to review one request at a time, and this is no longer adequate. Interconnection regulations often don't adequately address recent advancements in energy technology such as smart inverters and energy storage systems.
Smart inverters can adjust the amount and characteristics of power that a DER sends to the grid and are an important way to ensure grid stability. Sections of the IEEE 1547 standard define how smart inverters should be implemented by DERs, but not all states reference IEEE 1547 in their regulations.
Proper regulatory coverage for energy storage systems is more unsettled. Critical functions such as controlling the flow of energy to and from the grid need to be defined. If they are not or the rules are outdated, it could become difficult for the grid operator and energy storage project owner to get in sync over how to integrate the system.
The rapid growth in interconnection requests and evolving energy technology have contributed to a bottleneck in the interconnection request process and has led to calls for updating the regulations to account for the higher account volume and technical details of newer technology. In particular, timelines for each step in the process need to be updated. Changing interconnection rules is a lengthy process, however. States are typically required to seek feedback from all stakeholders including grid operators, DER developers, and citizen advocacy groups. The process can take years.
What Are the Technical Challenges of Connecting Renewable Sources to the Grid?
In addition to the technical requirements outlined above, both grid operators and clean energy project owners often lack the data needed to ensure a timely interconnection decision. Grid operators might lack data to predict the impact that DERs would have on their systems, and DER owners typically don't have access to grid data that would help them design their systems to minimize cost and grid impact.
On August 23, the Southwest Power Pool asked the Federal Energy Regulatory Commission (FERC) for permission to stop accepting new interconnection request pending more study on the effects of interconnection request clusters on the grid. The primary concern is a need for certainty about what grid upgrades will be needed to safely handle the additional power generation. The volume of request and request withdrawals made those projection unreliable.
DER owners need access to grid data such as power generation statistics at the substation level, known distribution constraints, estimated peak and minimum load data, and scheduled upgrades. Grid operators can provide some of that data through a preapplication report, typically for a fee. Hosting capacity analysis maps are available to existing interconnection customers, and they provide data on current grid conditions. That data would be useful to those seeking interconnections, too. The trick is to provide this information to DER owners accurately and in a timely manner.
What Are the Financial Challenges of Connecting Renewable Sources to the Grid?
Financial issues affect interconnections in a couple of ways. Grid operators assess the cost of upgrades needed to handle the additional power and can turn down a request if they deem it economically unfeasible. DER operators are often required to pay the costs to upgrade, which can run into the hundreds of thousands of dollars. Those costs might force them to withdraw their request or cancel their project.
Some grid operators' infrastructure is better able to handle new interconnections than others. Those that are most in need of upgrades might price most or all DER owners out of interconnections due to the high cost of equipment upgrades.
Most renewable energy projects are financed through loans or private equity. It's not uncommon for investors to pull funding or project owners to end or delay a project if something threatens its financial viability. This results in canceled interconnection requests, which in turn require grid operators to recalculate their projections on interconnection impact. This is one reason why the Southwest Power Pool asked to stop accepting new requests. A high rate of requests coupled with request cancellations made their projections unreliable.
This is a vicious cycle, as delays in granting interconnection requests are a common reason why renewable energy projects fail or become delayed.
What Are the Market Challenges of Connecting Renewable Sources to the Grid?
Grid operators are constantly trying to balance electric power generation against demand. They also plan their power generation needs years in advance and purchase long-term contracts from power generation sources.
A little-known fact about the electric utility industry is that they sometimes pay to offload excess energy. Negative wholesale electricity prices occur when local or system-wide supply exceeds demand. That power needs to go somewhere, and utilities don't always have a paying customer to take it. Renewable energy sources can contribute to excess electricity generation, and grid operators need to take this into consideration when evaluating interconnection requests.
On the positive side, storage-based DERs can reduce the risk of negative wholesale electricity pricing. When supply exceeds demand, that electricity can charge large-scale battery systems for later use.
Renewable Energy News of the Week
Clean Energy Jobs Growing Fast
Clean energy jobs are growing at twice the rate of overall U.S. employment according to the U.S. Department of Energy's (DOE's) 2024 U.S. Energy and Employment Report (USEER). The new energy sector created 142,000 jobs in 2023 out of a total of 250,000 in the overall energy sector. Clean energy jobs now represent 56% of the total energy workforce.
Source: U.S. Department of Energy, DOE Report Shows Clean Energy Jobs Grew at More Than Twice the Rate of Overall U.S. Employment
Texas Electric Grid Credits Clean Energy Generation
Wind, Solar, energy storage has in part has allowed the Texas electric grid to avoid energy scarcity conditions this summer, according to the Electric Reliability Council of Texas (ERCOT) CEO Pablo Vegas. The grid operator asked its customers to conserve energy 11 times last summer and fall.
Source: Utility Dive, ERCOT Successfully Navigates Heat Wave, New Peak Demand Record
Large Solar Project Launches in California
Clearway Energy Group has broken ground on a 140 MW solar project in Kern County, California, that includes 118 MW of storage. The project has long-term contracts in hand with load-serving entities in California, and it is expected to create more than 400 union jobs.
Source: Solar Power World, Clearway Begins Construction on Latest Solar + Storage Project in California
State Legislators Called Out on Solar Misinformation
The Louisiana Illuminator has fact-checked misinformation presented at a state legislative hearing on solar energy development. Among the debunked claims is that the solar industry would collapse without federal subsidies because solar power is more expensive than fossil fuels. Research shows this is not true.
Source: The Louisiana Illuminator, Misinformation Clouds Legislative Hearing on Solar Energy Development in Louisiana
Smartville Offers Second Life for Old EV Batteries
Smartville has demonstrated its new Mana Power System at Intersolar 2024 in San Diego. The system allows used Nissan Leaf or Tesla EV batteries to be used for home energy storage and backup. Setup requires some electrical expertise, but the product represents one example of giving EV batteries a second life.
Source: CleanTechnica, Smartville’s New Mana Power System Makes It Easy to Use EV Batteries for Home Energy Storage
Feds Announce EV charging, Alternative Fuel Grants
The Biden-Harris administration has announced $521 million in grants to continue the build-out of EV charging and alternative fuel infrastructure. The funding is expected to deploy more than 9,200 EV charging ports across 29 states, two tribal lands, and the District of Columbia. The U.S. Department of Transportation has published a full list of grant recipients.
Source: The U.S. Department of Energy, Investing in America: Number of Publicly Available Electric Vehicle Chargers Has Doubled Since Start of Biden-Harris Administration
Thanks for this interesting post, Michael. Is there anything ordinary people can do to help accelerate reliable interconnections?