Federal Grid Reforms Alone Not Enough To Solve Clean Energy Interconnection Problem

Although energy production from wind and solar has grown rapidly in the United States, its integration into the national electric grid has been impeded by poor grid interconnection policies, leaving thousands of new facilities for generating renewable energy waiting to be connected to the grid. 

In a Policy Forum, Les Armstrong and colleagues highlight the interconnection problem and discuss whether federal grid policy reforms alone are enough to address it. Armstrong et al. argue that while the US Federal Energy Regulatory Commission’s (FERC) recent orders to improve this bottleneck are a step in the right direction, fundamental issues remain unaddressed.

In the US, electricity production from wind and utility-scale solar exceeded that from coal for the first time in April 2022 and again from February through May 2023. The Inflation Reduction Act is expected to significantly boost low-carbon capacity additions, potentially doubling annual growth.

However, there is a significant backlog of thousands of new generation projects in the queue to connect to the electrical grid, with wait times between request and agreement that can last several years. In response to issues with the interconnection process, FERC released a set of reforms that incentivize ready projects, levy penalties for delays, and mandate long-term transmission upgrades with more equitable cost allocation.

Despite these steps, Armstrong et al. highlight several problems that remain, including the need for a more centralized planning approach and better integration of interconnection and transmission policies. Historical lack of coordination and conflicting state goals also hinder efficient grid development, emphasizing the need for a more coordinated and comprehensive strategy. “

Going forward, Congress and the federal government need to move to a more coordinated and comprehensive planning approach that allows FERC to overcome local and regional resistance if it is to contribute to the Biden administration’s goal of decarbonizing our electrical system,” write the authors. “What this fundamentally requires is a national decarbonization goal that provides the impetus for truly national planning for a 21^st-century electrical grid.”