The energy storage interconnection queue is broken. Here are some solutions.

As the energy storage interconnection queue gets longer and longer, new strategies are emerging to speed up studies, to make costs more transparent, and to cluster project proposals near the same connection point. These strategies could expedite project approvals and cut the queue(ueueue) down from years to months, grid analysts suggest.

Leading the charge to solve the queue crisis are several National Laboratories, the U.S. Department of Energy’s Office of Electricity (DOE-OE), the Institute of Electrical and Electronics Engineers (IEEE), and the Clean Energy States Alliance (CESA). These players recently presented a webinar on the new strategies at play entitled Energy Storage Interconnection – Challenges and Solutions, a presentation of the Energy Storage Technology Advancement Partnership (ESTAP).

ESTAP is a federal-state funding and information sharing project that aims to accelerate the deployment of electrical energy storage technologies in the United States. ESTAP is funded by DOE-OE, managed by Sandia National Laboratories, and administered by CESA.

Considering Unique Storage Export Attributes

Unlike other energy projects, energy storage has unique operational attributes that are often not well accounted for in the current interconnection process, which can lead to undue burdens that often render them as uneconomic.

“There’s a lack of defined [utility] rules and processes for evaluating operating schedules, in which an energy storage system can operate on a predetermined schedule’” noted Will McNamara, a Grid Energy Storage Policy Analyst for Sandia National Laboratories. “And there is a lack of differentiation between stand-alone energy storage projects and those projects that are conjoined with solar projects. There’s a very solid argument that they should be treated differently and perhaps expedited.”

On a national level, the Federal Energy Regulatory Commission (FERC) issued Order 2023 in July 2023 to require that interconnection analysis consider projects in geographic clusters.

“This is the first major change to transmission interconnection requirements in the last two decades,” according to McNamara. “The FERC order requires transmission providers to adopt a first-ready, first-served cluster study approach when examining what grid upgrades may be needed to therefore drive the projects coming in for approval. This is a very significant change. It’s replacing what had been the legacy approach of studying individual proposals on a first-come, first-served basis.”

On the distribution level, cluster analysis is emerging with new project requirements and costs, noted Imre Gyuk, the Director of Energy Storage Research at DOE, also a presenter. “Instead of evaluating projects individually, multiple projects are grouped together for analysis, reducing study times and costs. Stricter readiness requirements, such as higher application fees or site control requirements are being implemented to discourage speculative projects and ensure that only serious projects enter the queue,” explained Gyuk.

California is one state seeking to address the storage queue problem through limits on storage exports to the grid.

“In California, the Public Utilities Commission in March established new regulations around what we’re calling limited generation profiles,” McNamara said. “These are putting limits on the amount of energy that distributed energy resources can send back to the grid at different times. They are the first state that I’m aware of that is taking that step from a policy perspective.”

In a related move, “Oregon, instead of basing their interconnection analysis on the aggregate nameplate capacity of a system, is now looking at the export capacity, and presumably will be defining additional interconnection policies on that basis,” McNamara added.

Runaway Interconnection Costs

Costs for interconnection have gone haywire. “In the period from 2000 to 2009 the median costs of interconnection were between $18/kW and $30/kW; now they’re up to $80/kW to $85/kW, and these cost increases are driven by network upgrade costs,” explained Todd Olinsky-Paul, the Senior Project Director for Energy Storage at CESA.

As storage becomes less expensive and more projects are proposed, the queue for storage gets longer. At the end of 2023, the U.S. West region outside California had the largest interconnection queue at 706 GW followed by the California ISO at 523 GW, according to Gyuk.

The impact is that many projects are withdrawn before their turn comes up in the queue. “Unfortunately, just 14% of [national] queue capacity reached commercial operation in the years between 2002 and 2017,” noted Olinsky-Paul.

In a study for the state of Massachusetts, CESA found that “in 2022, proposed energy storage and hybrid solar + storage projects in the queue were at about 400 MW of capacity, yet authorized projects were close to zero. In fact, they have been close to zero pretty consistently,” said Olinsky-Paul.

Few approved interconnections mean fewer jobs. “The proposed capacity waiting in the Massachusetts interconnection queue represented approximately $8 billion in planned investments in 2022; for that many projects to be withdrawn represents a huge loss of economic activity,” Olinsky-Paul said.

Interconnection queue data needs to be far more transparent, charged Diane Baldwin, a Project Manager for the Energy Infrastructure & Buildings Division of Pacific Northwest National Laboratory (PNNL), also a webinar presenter.

“They [developers] intend to develop one project, but they’re putting in five or eight applications, because it’s the only way to really get information about the cost of the interconnection and the capability of the project,” Baldwin explained.

Energy storage stakeholder input

One way that the energy storage queue will be shortened is through state policies that consider a wider range of stakeholder input. At Sandia National Laboratory, such a project is underway as the Interconnection Innovation Exchange, i2X.

“What we’ve been doing in i2X includes creating road maps with a lot of solutions and identifying paths forward for all the different stakeholders who want to affect interconnection reform and want to get a more streamlined, efficient process that results in more projects getting onto the queue and in overall cost efficiencies,” said Baldwin.

They currently are developing a DER interconnection roadmap and “distinct solutions, in some cases, from those solutions that are on the transmission level,” said Baldwin. “We will be highlighting specific actions on the parts of regulators, utilities, vendors, the community, the research community, NGOs, and energy and equity justice advocates.”

And unlike projects in the energy storage queue, you can expect that road map soon. That DER project is targeted for completion in September. “We are developing that draft content now, and it will be published through a request for information process.”

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Charles W. Thurston is a contributor to Solar Builder.

Tags: interconnection