Home Business Wind and solar projects are flooding America’s aging power grid

Wind and solar projects are flooding America’s aging power grid

by SuperiorInvest

Plans to install 3,000 acres of solar panels in Kentucky and Virginia have been delayed for years. Wind farms in Minnesota and North Dakota were abruptly canceled. And programs to encourage Massachusetts and Maine residents to adopt solar power are faltering.

The energy transformation poised to take off in the United States amid record investments in wind, solar and other low-carbon technologies is hitting a major hurdle: The volume of projects has overwhelmed the nation’s antiquated systems for connecting new sources of electricity to homes and businesses.

So many projects are trying to push through the approval process that delays can drag on for years, so some developers throw up their hands and walk away.

Over 8,100 energy projects – the vast majority of them wind, solar and batteries – were awaiting permission to connect to electricity grids at the end of 2021, up from 5,600 a year earlier, disrupting a system known as interconnection.

This is the process by which electricity generated by wind turbines or solar arrays is added to the grid – the network of power lines and transformers that transports electricity from where it is generated to cities and factories. There is no single grid; The United States has dozens of electrical networkseach is overseen by a different authority.

PJM Interconnection, which operates the nation’s largest regional network, stretching from Illinois to New Jersey, was so inundated with requests to connect that last year announced a freeze on new applications by 2026 to process the thousands of pending proposals, mostly for renewable energy.

It now takes an average of about four years for developers to get approval, double the time it took a decade ago. And when companies finally get their projects reviewed, they are often surprised to learn that the existing power lines are too clogged and the connection costs too high.

Many give up. Less than one-fifth of solar and wind proposals actually make it through the so-called interconnection queue, according to research from Lawrence Berkeley National Laboratory.

“From our perspective, the interconnection process has become the No. 1 project killer,” said Piper Miller, vice president of market development at Pine Gate Renewables, a major solar and battery developer.

After years of breakneck growth, the United States has seen massive solar, wind and battery installations fell by 16 percent in 2022, according to the trade group American Clean Power Association. It blamed supply chain issues, but also lengthy delays in connecting projects to the grid.

Electricity production generates about one-quarter of the greenhouse gases produced by the United States; cleaning it up is key to President Biden’s plan to combat global warming. The landmark climate law he signed last year provides $370 billion in subsidies to help make low-carbon energy technologies – such as wind, solar, nuclear or batteries – cheaper than fossil fuels.

But the law does little to address the many practical obstacles to building clean energy projects, such as e.g clearance of snags, local opposition or transmission restrictions. If those hurdles aren’t addressed, experts say, there’s a risk that billions in federal subsidies won’t translate into the deep emissions reductions that lawmakers envision.

“It doesn’t matter how cheap clean energy is,” said Spencer Nelson, executive director of research at the ClearPath Foundation, an energy nonprofit. “If developers can’t get through the interconnection process quickly enough and get enough steel into the ground, we won’t meet our climate change goals.”

In the largest grids, such as those in the Midwest or Mid-Atlantic, a regional operator directs a byzantine flow of electricity from hundreds of different power plants over thousands of miles of transmission lines and into millions of homes.

Before a developer can build a plant, the local grid operator must make sure the project won’t cause disruption – for example, if existing power lines get more electricity than they can handle, they could overheat and fail. After carrying out a detailed study, the network operator may require an upgrade, for example, a line connecting the new power plant to a nearby substation. These costs are usually borne by the developer. Then the operator moves on to study the next project in the queue.

This process was fairly routine when power companies built several large coal or gas-fired plants each year. But it has collapsed as the number of wind, solar and battery projects has skyrocketed over the past decade, driven by falling costs, state clean energy mandates and now hefty federal subsidies.

“The biggest challenge is just the sheer volume of projects,” said Ken Seiler, who leads systems planning at PJM Interconnection. “There are only so many power engineers who can do the sophisticated studies we need to do to make sure the system remains reliable, and everyone else is scrambling to hire them, too.”

PJM, the grid operator, now has 2,700 energy projects under study — mostly wind, solar and batteries — a number that has tripled in just three years. Wait times can now reach four years or more, prompting PJM last year suspend new reviews and redesign its processes.

A delay could upend the business models of renewable energy developers. As time goes on, rising material costs can erode the project’s viability. The option to purchase the land expires. Potential customers lose interest.

Two years ago, solar developer Silicon Ranch asked PJM for permission to link three 100-megawatt solar projects in Kentucky and Virginia, enough to power tens of thousands of homes. A company that often pairs its solar panels with grazing sheepnegotiated with local landowners to purchase thousands of acres of farmland.

Today this land is empty. Silicon Ranch hasn’t heard back from PJM and now estimates it may not be able to bring those solar farms online until 2028 or 2029. That’s causing headaches: The company may have to decide whether to buy the land before it knows whether is his solar array will be approved.

“It’s frustrating,” said Reagan Farr, chief executive of Silicon Ranch. “We always talk about how important it is for our industry to build trust and credibility with local communities. But when you come and say you’re going to invest, and then nothing happens for years, it’s not an optimal situation.”

PJM plans to soon speed up his queues — for example, by studying projects in clusters instead of one at a time — but first you need to clear your backlog.

A potentially bigger problem for solar and wind is that in many places around the country, the local grid is overloaded and unable to absorb more power.

This means that if a developer wants to build a new wind farm, he may have to pay not only for a simple connecting line, but also for a deeper upgrade of the grid elsewhere. One planned wind farm in North Dakota was, for example they asked to pay for multi-million dollar upgrades to transmission lines hundreds of miles away in Nebraska and Missouri.

These costs can be unpredictable. In 2018, EDP North America, a renewable energy developer, proposed a 100-megawatt wind farm in southwest Minnesota, estimating it would need to spend $10 million to connect to the grid. But after the grid operator completed its analysis, EDP found the upgrade would cost $80 million. Canceled the project.

That creates a new problem: When a proposed energy project falls out of the queue, the grid operator often has to redo studies for other pending projects and shift costs to other developers, which can cause further cancellations and delays.

It also creates perverse incentives, experts say. Some developers will submit multiple proposals for wind and solar farms in different locations without intending to build them all. Instead, they hope one of their designs will come after another developer who has to pay for major network upgrades. The rise of this type of speculative bidding further clogged the queue.

“Imagine if we paid for highways like that,” said Rob Gramlich, president of the consulting group Grid Strategies. “If the freeway is completely clogged, the next car that gets on it has to pay to widen the entire lane. When the driver sees the bill, he gets off. Or, if they pay for it themselves, everyone else can use that infrastructure. It doesn’t make any sense.”

A better approach, Mr. Gramlich said, would be for grid operators to plan transmission upgrades that benefit the public and spread the costs among a broader set of energy providers and users, rather than individual developers fixing the grid piecemeal through a messy process.

There is precedent for this idea. In 2000, Texas officials saw that existing power lines would not be able to handle the growing number of wind turbines being built on the rugged plains of West Texas and billions of dollars in planned upgrades. Texas now leads the nation in wind power. Similarly, recently, MISO, a 15-state grid in the Midwest approved a new $10.3 billion power linein part because officials saw that many of its states had set ambitious renewable energy goals and would need more transmission.

But this kind of proactive planning is rare because utilities, state officials and businesses often argue furiously over whether new lines are necessary — and who should bear the cost.

“The hardest part isn’t the engineering, it’s figuring out who’s going to pay for it,” said Aubrey Johnson, vice president of systems planning at MISO.

However, the fate of these rules is unclear. In December, Richard Glick, the former chairman of the regulatory commission who spearheaded both reforms, resigned after clashing with Sen. Joe Manchin III, D-West Virginia. over unrelated policies around gas pipelines. The commission is now split between two Democrats and two Republicans; any new reforms need majority approval.

If the United States can’t fix its grid problems, it could struggle to address climate change. Researchers from Princeton’s REPEAT Project recently estimated that new federal clean energy subsidies could cut electricity emissions in half by 2030. However, this assumes that transmission capacity will expand twice as fast over the next decade. If that doesn’t happen, the researchers found, emissions could actually increase as solar and wind plants are throttled and existing gas and coal plants run more often to power electric cars.

Massachusetts and Maine offer warnings, said David Gahl, executive director of the Solar and Storage Industries Institute. In both states, lawmakers have offered big incentives for small solar installations. Investors poured in money, but within a few months, the network executives they were amazedwhich delays hundreds of projects.

“It’s a lesson learned,” Mr. Gahl said. “You can pass big, ambitious climate laws, but if you don’t pay attention to details like interconnection rules, you can quickly get into trouble.”

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