Grid Interconnection Queues and Renewable Energy

In the wake of the 2015 Paris Agreement on climate change, the rapidly developing climate technology sector, and the upcoming  COP26 climate conference  in Glasgow, where countries plan to " increase the ambition " of their climate plans, the renewable energy industry continues to grow. In the United States, President Biden has  updated  the United States' Nationally Determined Contribution (NDC) of greenhouse gas reductions to a 50%-52% reduction in 2005 emissions levels by 2030. The Biden administration has also  set the national goals  of net-zero emissions economy-wide by 2050 and a 100% clean electricity sector by 2035.

The United States can meet the target of 100% clean electricity by 2035, but it will take a massive amount of renewable energy, the vast majority of which has not been built yet. The UC Berkeley Goldman School of Public Policy outlines the path to clean electricity in their  2035 Report . Unsurprisingly, the report shows a massive buildout of renewable energy capacity is required to meet these clean electricity targets. The chart below shows the annual deployment of wind, solar, and battery energy storage required, averaging about 70 Gigawatts (GW) per year.

According to the 2035 report, "Although challenging, a renewable energy buildout of this magnitude is feasible with the right supporting policies in place. For example, 65 GW of U.S. natural gas generation were built in 2002." As exemplified in the difference between measured capacity addition values in 2020 to target values in 2021, the rate of buildout must rapidly increase. The good news is that interconnection queues in the United States (the "waiting line" for new energy projects) "currently include 544 GW of wind, solar, and standalone battery storage, roughly half of the 1,100 GW required [to meet a 90% clean energy 2035 target]."

"Interconnection queues in the United States currently include 544 GW of wind, solar, and standalone battery storage, roughly half of the 1,100 GW required." (UCB GSPP 2035 Report, 2020)

The bad news is that most of those 544 GW in the queue won't ever provide energy to the grid. There are various reasons an energy project doesn't make it from proposal to installation, including challenges securing land, permits, financing, tax exemptions, community support, and many others - but one reason is the current state of the grid interconnection queue itself.

In this article, we will explore a case study of the interconnection queue in the Midwest in order to get a better understanding of the challenges the current structure poses for the energy transition. To do that, we need to start with an understanding of the grid.

In the United States, large areas of the electric grid are operated by entities called  Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) . These organizations facilitate energy transmission from source (generation) to customers (load), ensure grid reliability, and oversee billions of dollars of energy transactions per year in energy markets. The U.S. has several large ISOs and RTOs, shown below. Outside of these ISOs, the grid is operated directly by hundreds of different utility monopolies, with fewer market structures in place than in areas of the grid governed by ISOs.

The  Midcontinent Independent System Operator , or MISO, is a grid-controlling entity in the midwestern U.S., encompassing areas as far north as North Dakota (and Manitoba in Canada), and as far south as Louisiana and some parts of Texas. Below shows MISO's geographic footprint in the United States.

Before we get into interconnection queues, let's take a look at the current state of MISO.

Now that we know what MISO currently looks like, let's take a look at the future of energy in the midwest, via an investigation of the MISO interconnection queue.

Every large energy project, whether renewable, fossil, or nuclear, must be studied before connecting to the grid, waiting its turn in an interconnection queue. Each Independent System Operator (grid controller) has its own interconnection queue, and as the number of renewable energy projects looking to come online has exploded, so have these queues. Projects currently sit multiple years in major interconnection queues, waiting for the grid operators to study them and provide an estimated cost of interconnection, which can range into the tens of millions of dollars.

These drawn-out interconnection processes and their associated costs can result in increased uncertainty of financial returns for these projects, affecting the future of the renewable energy industry in the U.S. Below, we will see how the MISO queue has grown over the years, investigate where and from what resource the growth has come from, and demonstrate the potential that queue reform could have on unlocking a vast increase in the amount of renewable energy on the grid.

This look into MISO gives us an example of queue congestion, timeline, cost, and related issues within the ISO interconnection process - but these issues are not unique to MISO. Although the full picture of the issue is very complex and includes considerations outside the scope of this project, there are some key factors behind ballooning interconnection queues across the country. These factors, their effects, and some proposed solutions are outlined in a January 2021 report from utility reform advocacy group, Americans for a Clean Energy Grid (ACEG),  "Disconnected: The Need for a New Generator Interconnection Policy." 

The ACEG report outlines the interaction of archaic interconnection policies and changing energy mix as the main drivers of interconnection queue congestion and wait times.

Current interconnection policy, established in part by both the Federal Energy Regulatory Commission (FERC - the government agency responsible for regulating interstate energy commerce) and individual ISOs, operates on a cost allocation scheme of "participant funding." This means that each individual generator is responsible for any grid upgrade costs resulting from its addition to the grid. And while the participant funding scheme worked well when natural gas was the main type of generation in the queue, it "has proven inefficient and unworkable for today’s resource mix. Wind, and to a lesser extent solar generation, is heavily location-constrained, unlike gas generation...As a result, these renewable projects often require larger transmission upgrades to serve load."

The reliance on single projects to bear upgrade costs from interconnection leads to more projects dropping out of the queue, requiring a re-study of projects remaining and a shifting of costs to other projects, "causing a domino effect of cancellations," according to the ACEG Report. Project developers are thus incentivized to submit more projects to the queue in hopes one will avoid expensive upgrade costs. More projects in queues lead to longer wait times and more cost uncertainty, fueling a positive feedback loop that causes queues sizes and wait times to expand.

The end result of the queue congestion issue is  more expensive power, less economic development, and a constraint on the build rate of renewables . As such, the current interconnection queue structure is a major impediment to meeting our climate goals.

The ACEG Report proposes that the only way to solve the interconnection queue issue is to move beyond the piecemeal and incremental process changes that ISOs and FERC have implemented over the past 20 years, and instead focusing on more holistic regional and inter-regional planning reforms.

"The changing resource mix and electrification of the energy sector will have a profound impact on the future grid, yet in many cases those factors are not being included in regional and interregional planning efforts." (ACEG Report, 2021)

Improvements in inter-regional processes should include incorporating the benefits of wires developers build to connect their projects to the grid, better allocation of costs between projects and ISOs, and improved alignment between regional planning studies and individual generator interconnection studies. However, addressing the issue is more complex than what is outlined here, and this list of proposed reforms is not fully comprehensive. For further reading on potential solutions and reforms, please refer to the  ACEG Report , as well as work done by the  Sustainable FERC Project .

As the U.S. continues to navigate the energy transition, we will need solutions to the queue congestion problem. Transitioning to 100% clean electricity by 2035 is only possible if the Biden Administration, FERC, ISOs, and developers advocate for and devise significant reforms to enable a more rapid, flexible, efficient, and predictable interconnection process, in MISO and across the country. The future of our climate depends on it.

All data used in this project are publicly available, from MISO, ACEG, the GSPP 2035 Report, and Homeland Infrastructure Foundation Level Database. Please see the "Data and Inspiration" note at the bottom of the page for more information about individual sources.

MISO's most recent interconnection queue data is always available on its website. Energy Acuity, an energy data and intelligence platform, has catalogued all MISO queue positions for projects for decades. This project uses all MISO queue data from January 1, 2000 to December 31, 2020. This dataset includes thousands of projects that have entered the MISO queue (and attributes of each project), many of which were never built.

These data are a CSV file, with no spatial data explicitly encoded. However, there are fields for County and State name. In order to map out the projects across the MISO territory, I had to translate these location tags (text) into spatial information a GIS program could work with. First, I mapped county names in the MISO CSV to their FIPS code, using this  FIPS code matching spreadsheet . Next, I merged an existing county map layer in GIS with the new CSV file. The output of this merge has all MISO queue CSV information attached to a county-shaped polygon that can be mapped.