By including network upgrade costs in smaller energy systems, the energy offices and other entities implementing these grant programs may avoid surprises like unreasonable upgrade fees or insufficient hosting capacity availability. As mentioned above, FERC included a proportional impact method in the network upgrade cost allocations for Order No. 2023. Aside from queue duration, cost allocation is an important consideration for the parties in the interconnection reform discussion. Order 2023 seeks to implement changes which will reduce the time generators spend in the interconnection queue, provide a more equitable cost allocation for IPPs, and support new technological advancements. FERC acting Chairman Willie Phillips has said he aims to issue an interconnection reform rule as soon as possible. If FERC doesn’t want to include the proposed reforms in the current proposal, it should issue a supplemental proposal that covers them, according to the groups.
To get more power to the grid faster, it would be better for FERC to implement regulatory changes to their interconnection review process instead of relying on special approvals. Neither proposal furthers wider system transformations that could speed approval for all energy projects; instead, they are localized one-time approval processes that fast-track projects that meet specific qualifications. Those special approvals grant PJM and MISO the ability to expedite specific projects through so-called queue jumping. In addition, there is a public comment process that includes the possibility of legal challenge, further extending project timelines.
These obligations, which will help renewable energy developers, includes everything from imposing firm study deadlines and making clear any affected system flagged for the interconnection https://www.yaldex.com/java_tutorial_2/Fly0157.html procedure. In 2003, FERC adopted Order Number 2003, which required utilities to adopt interconnection procedures and a standard interconnection agreement for all generators with more than 20 MW. This report reviews current proposals and offers recommendations for beneficial interconnection reform going forward. The RFI is directed at state energy offices, public utility commissions, electric utilities, regional transmission organizations, independent system operators, transmission and generation developers, large energy users, and other stakeholders.
- And the result being, we aren’t seeing them being offered in the interconnection studies as network upgrades.
- How real is the risk that we’re running short on electricity supply relative to demand, and springing from that whole issue, how urgent is the need to add new sources of power?
- And do you think we’re going to have enough resources coming on to the grid over the next few years to mollify our concerns about resource adequacy going forward?
- Studies have quantified these delays and also highlighted the impact of queue withdrawals.5 With solar, wind, and storage projects making up approximately 94% of the total capacity in interconnection queues,6 this backlog is one of the primary obstacles for the clean energy transition.
- Developers who interconnect at a PIL generally will not face additional network upgrade costs beyond the standardized Generator-Related Interconnection Development Charge (GRID-C).
- Interconnection customers must pay study and commercial readiness deposits as part of the cluster study process, as well as demonstrate site control at the time of submission of the interconnection request.
The Untapped Potential of ‘Repurposed Energy’
The Mid-Continent Independent System Operator (MISO) employs a hybrid of connect and manage and FERC’s traditional interconnection pricing policy, which assigns costs to the entity causing the upgrades. While Germany is clearly an interconnection success story, it can be difficult to untangle the effects of connect and manage from the impact of other requirements, such as the one to obtain all local planning and siting approvals before entering the queue, which sharply cuts down on speculative projects—a reform that no market in the US has seriously contemplated. Germany, which likewise utilizes connect and manage, has some of the lowest queue waiting times in Europe, ranging between one and two years. In 2023, the UK’s Office of Gas and Electricity Markets stated that connect and manage “enabled the rapid connection of significant amounts of renewables to the grid, accelerating generation connections which would otherwise have had to wait for transmission network upgrades.” Under the “connect and manage” model, the grid operator narrows the scope of the interconnection study process to look at the grid enhancements necessary to allow the generator to physically interconnect to the grid. Options being implemented internationally may provide some lessons and additional pathways for FERC to examine as it considers the next step in fighting interconnection queue creep.
And if we focus on being an enabler of new generation and transmission, and implement more interconnection solutions than obstacles, consumers can reap the benefits of abundant, low cost, reliable energy. Now, what we’re finding is that every region across the US implements their processes differently. But on the other hand, the pro to that is that they can bring new resources online very quickly and expeditiously, and so that’s helping them sail through these heat waves that we’re seeing, even with low prices. And it remains to be seen when and how that’s implemented, but there could be a lot of further improvement based on that going forward. And unfortunately, that’s the behavior that we’re seeing. So this has led to a lot of speculative projects getting put in the queues, because that’s the only way for them to find out what these potential really high costs at any location would be.
By mandating the consideration of alternative transmission technologies, FERC balanced concerns by developers of alternative transmission technologies that barriers to entry exist for advanced transmission technologies versus concerns raised by transmission providers that mandated use of alternative transmission technologies could be problematic and time-consuming. Transmission providers must evaluate these alternative transmission technologies in all instances, without the need for a request from an interconnection customer. Under existing rules transmission providers have been permitted to use “reasonable efforts” to process interconnection requests in a timely manner, but have not been held to any specific timelines. Except under certain limited circumstances when there is a regulatory limitation to obtaining site control, interconnection customers will no longer have the option to provide a financial deposit in lieu of demonstrating site control. Transmission providers must use the LGIA deposit in its entirety before requiring interconnection customers to submit additional security.
The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. SPP estimates the CPP could reduce planning process costs by more than $3 million annually and potentially avoid over $100 million in duplicative transmission spending each planning cycle. Key changes include a queue cluster window reduced from 11 months to 2 months, a single Decision Point (after which financial security is largely non-refundable), and a consolidated 180-day study period.
- Numerous additional solutions exist that could further speed up generator interconnection, some of which have been implemented in leading regions with impressive early results.
- 1583 (“Based on the record, we affirm the Commission’s preliminary finding in theNOPR that alternative transmission technologies have the potential to provide benefits to optimize the transmission system in specific scenarios”) (Citations omitted).
- This cost allocation can be spread among several projects within a cluster of interconnection applicants seeking to inject power in a relatively close proximity.
- So that’s common to both the 2022 and Order 2023 reforms.
- FERC also required transmission providers to adopt a transition process to move from the existing serial interconnection process to the new cluster study process.
Unsurprisingly, solar is now dominating the interconnection queues. So, what is ailing the nation’s interconnection queues? The technical storage or access is required to create user profiles to send advertising, or to track the https://tuns.ca/blog/accelerate-your-learning-with-ai-courses-online-gain-in-demand-skills-and-stay-ahead-of-the-technological-curve user on a website or across several websites for similar marketing purposes.
- 9 Section 7.5(3) of the revised LGIP provides that the transmission provider shall determine if cluster restudy is required if one or more interconnection customers withdraws from the cluster, or is deemed withdrawn.
- Transmission providers must evaluate these alternative transmission technologies in all instances, without the need for a request from an interconnection customer.
- As such, the move to a cluster study process is mandatory and must be implemented by all transmission providers.
- Several utilities raised concerns about the affected system study process, noting that many issues remain unresolved, including cost allocation that FERC found to be beyond the scope of Order No. 2023.
- Australia’s Energy Market Operator (AEMO) has taken this concept a step further, creating an openly available “Connections Simulation Tool” (CST) that allows stakeholders to run simulations against the Australian grid’s models.
- If FERC is saying that it’s a requirement that you at least consider these grid-enhancing technologies, wouldn’t PJM ultimately be required to do the same?
By the end of 2022, over 2,000 gigawatts of proposed generation and storage projects were waiting in interconnection queues. Studies have quantified these delays and also highlighted the impact of queue withdrawals.5 With solar, wind, and storage projects making up approximately 94% of the total capacity in interconnection queues,6 this backlog is one of the primary obstacles for the clean energy transition. We can provide innovative solutions to take your business to greater heights. At Keentel Engineering, we specialize in helping developers, utilities, and asset owners navigate these evolving regulatory frameworks through advanced engineering design, interconnection studies, and compliance services.
FERC Approves Streamlined Process To Replace Retiring Facilities
Initial commercial readiness deposits will be two times the initial study deposit and remaining commercial readiness deposits will be based on a percentage of the interconnection customer’s assigned transmission network upgrade costs (5% for the cluster restudy and 10% for the facilities study). The new rule also requires the interconnection customer to make commercial readiness deposits at the beginning of each study in the cluster study process (i.e., the initial cluster study, the cluster restudy, and the facilities study). Under FERC’s new approach interconnection customers must submit a nonrefundable US$5,000 application fee during the cluster request window to enter the interconnection queue.