Interconnection reform needed to keep transmission upgrades moving, industry report says

If the clean energy transition is to pick up speed, and transmission upgrades are to continue, the way interconnection works – from funding on up – needs to change, according to a new whitepaper from the Solar and Storage Industries Institute (SI2).

SI2 went so far as to call the interconnection process broken by its underlying issues, such as the interconnection funding paradigm.

“We can’t keep saddling the interconnection process with all the costs of transmission system upgrades,” David Gahl, executive director of SI2, said. “This process is akin to contracting a paving firm to replace your driveway in upstate New York and getting a bill for the driveway and the cost of building a new exit ramp off I-95 in New Jersey.”

At this point, the report noted, there is an increasing backlog of clean energy projects nationwide. Building on analyses from Lawrence Berkeley National Laboratory and the U.S. Department of Energy, the report recommended that grid operators and regulators undertake more comprehensive regional transmission planning processes and work out new ways to pay for transmission upgrade costs. In this way, it argued, the costs of transmission upgrades could be more equitably distributed and uncertainty surrounding the interconnection process reduced.

The end result would be lower interconnection costs, a strengthened transmission system, and quicker rollout of renewable energy, at least in theory.

“America’s ability to reach our climate goals starts and ends with how efficiently we can get projects connected to the grid,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said. “The interconnection process is a black box with unknown wait times and costs for clean energy developers. We need the solutions detailed in SI2’s report to serve growing demand for electricity with reliable, low-cost solar and storage.”

Among other things, the report urged policymakers and regulators to incorporate data from interconnection queues, demand and resource mix forecasts, and regional clean energy goals into any regional transmission planning processes. At the grid operator and federal level, it also argued for limiting grid upgrade costs to measures that safely connect projects to the local transmission network, including a more significant queue entry fee.

On top of the SEIA, other backers of the report’s conclusions included the Natural Resources Defense Council (NRDC) and Advanced Energy United.