The interconnection queue refers to the phase of an
energy project from when the interconnection request is made to the power
operator to the granting of an interconnection agreement. It is a proxy for the
time it takes to begin construction of a project from when a request is made. But
the vast majority don’t get built. The New York Times reports that now solar,
wind, and battery projects are taking on average more than 3 years to get
through interconnection queues and a whopping 80% of projects do not make it at
all. It takes an average of a little over 4 years to get to commercial operation
from interconnection request. In California’s CAISO it takes 5 years. Even
though these projects can generally be built quickly and on budget, the time it
takes to get them running is quite slow. Just a decade ago that length of time
used to be two years, so it has doubled. Supply chain issues, permitting
slowdowns, public opposition, and lack of adequate transmission or grid integration
capabilities are the problems. The high number of projects that are withdrawn
is actually nothing new. DOE data from Berkeley Labs shows that since 2000 the
average number of projects withdrawn amounts to about 77% of all projects
initiated. What is new is the increasing number of projects initiated,
corresponding increase in the total capacity of new proposed projects, and the
time it takes to get approval for those that are approved. About 90% of the proposed
projects are solar, wind, and storage projects.
Intermittent
wind and solar in particular are likely to disrupt local power grids and make
it harder to balance them. Power engineers must study them to figure out how to
integrate them and what grid upgrades are needed. There are not enough power
engineers to study the myriad projects in a timely manner. System operator PJM
hopes to speed up the queuing process by bundling projects. PJM also announced
a freeze on new applications until 2026 so they can catch up. They currently
have 2700 projects under study. The workflow from interconnection request begins
with feasibility, then system impact, then facilities. At any point in this process
the request may be withdrawn or the system operator or other regional authority
may offer an interconnection agreement so the project can be built. If
transmission upgrades or other upgrades are deemed to be required, the
developer will often be asked to pay the costs which leads to lots of
withdrawals. Since about 2016 the average time it takes from getting an
interconnection agreement to commercial energy generation is a little over 2
years.
At the end of
2021 more than 8100 projects were awaiting approval, up from 5600 at the end of
2020. Wind, solar, and battery projects fell 16% in 2022, partially due to
queue problems. One renewables developer called it the number one project killer.
As time goes by higher materials costs, which has been the trend in the past
couple of years, can make new projects unviable. Queue holdups are causing
major headaches for renewables developers.
One of the
biggest problems is simply that there is not enough grid and transmission
capacity available and the costs to upgrade sink the projects. Developers may
estimate costs, including grid upgrades, and then find out after review that those
costs will be much higher than they predicted. The grid system operators sometimes
must shift their costs when projects are withdrawn when evaluating subsequent
projects on the same local grid. To complicate matters some developers will
submit multiple projects hoping to piggyback off of projects by other developers
who pay for grid upgrades. They only intend to build some of those projects at
all if someone else does the upgrades. Apparently, this kind of speculative bidding
is happening more and more. Rob Gramlich, president of the consulting group
Grid Strategies, suggested that these perverse incentives are a consequence of
a process that is too chaotic and not fair to all. It certainly seems
inefficient. He thinks the grid operators should come up with upgrades that would
be broadly beneficial and spread the costs over more developers and users. This
approach has been successful in developing transmission for growing wind
development in Texas and in the Midcontinent. The biggest problem isn’t
engineering but who pays, said a MISO system planner.
Data indicate
that state incentives and mandates also contribute to the problem. In some
places they have resulted in large increases in proposed small-scale solar
projects that may be harder to sort out in terms of grid integration. Indeed,
looking at the Berkeley Labs data, one can see that solar projects are the most
numerous. In 2021, the number of proposed storage projects exceeded the number
of proposed wind projects for the first time. I am guessing storage projects
are easier to integrate in general since they can alter charging and
discharging times to a certain extent. The whole mess does not bode well for a
renewables revolution or for fast decarbonization scenarios. There has also
been an increase of hybrid projects: solar-plus-storage and wind-plus storage. The
Berkeley Labs study concludes:
“Solar (676 GW) accounts for >65% of all active
generator capacity in the queues, though substantial wind (247 GW) and gas (75GW)
capacity is also in development. Over 77 GW of offshore wind is currently
active in the queues.”
“Considerable standalone (213 GW) and hybrid (~208
GW1) battery capacity is in development, along with 7 GW of other storage.”
If that capacity is weighted to actual production
potential by multiply by avg. capacity factors, then we get 168GW for solar, 97GW
for wind, and 43GW for gas, or 54% solar, 31% wind, and 14% gas, excluding
storage. The 14% represented by gas is the easiest to integrate, followed by
the 31% for wind. The majority, the 54% represented by solar is the most
difficult and costly to integrate. Thus, the majority of projects and potential
generation is the least simple and most expensive to integrate.
The graph
below shows the growth of proposed hybrid projects, the growth in proposed standalone
storage overtaking proposed wind in 2021, and modest drops since about 2017 of
proposed gas projects. It should be noted that some of those gas projects and
others to be proposed will be required to backup and integrate renewables,
though less so with the growth of storage, if it grows as expected.
Graph from the Berkeley
Labs study showing capacity of different generation sources in the queue.
Graph from the
Berkeley Labs study showing completion percentages by region.
Looking at the graph below I am surprised
by the amount of solar in the PJM regions considering that the region is not ideal
for solar energy production. The Southeast and SPP regions have much better
solar potential than PJM. However, it appears that the SPP region has only about
a one fourth of the amount of solar in the queue in recent years than PJM and
the Southeast has only about one third as such solar as PJM. It doesn’t seem to
make sense that so much solar is being proposed in a region where solar will be
less profitable due to lower capacity factors. Perhaps it is partially due to
more power needs in the region due to population. PJM generally has quite a bit
of reserve capacity now but that is expected to change as more thermal
resources retire. Other regions with better solar and wind resources tend to be
in less populated areas in the U.S. requiring more large and expensive
transmission projects, unfortunately. PJM just reported that they expect 40GW
of generating capacity, 90% of it from coal and gas, to retire by 2030, or 21%
of the region’s total capacity. That could account for some of the uptick in
solar and storage proposals. However, in the same report they noted just
15-30GW in new capacity is expected by 2030. If that is true it will eat into
their reserve capacity. MISO region is facing a similar issue and the North
American Electric Reliability Corporation is warning that planned retirements
may have to be scaled back if reliability is to be maintained. Transmission and
other grid upgrades really have to precede any new surges of renewable power. They
warn that the pushes to replace fossil fuel and nuclear power could result in
energy shortfalls and rolling outages in extreme weather events as we have
already seen, only perhaps worse. Goals and mandates, like Biden’s goal of 100%
carbon free electricity by 2035, just a little over a decade away, make reliability
problems more likely, they argue.
Graph from the Berkeley
Labs study generation sources in the queue by region.
References:
The
U.S. Has Billions for Wind and Solar Projects. Good Luck Plugging Them In. Brad
Plumer. New York Times. February 23, 2023. The
U.S. Has Billions for Wind and Solar Projects. Good Luck Plugging Them In.
(yahoo.com)
Queued
Up: Characteristics of Power Plants Seeking Transmission Interconnection as of
the End of 2021. DOE. Office of Energy Efficiency & Renewable Energy. PowerPoint
Presentation (lbl.gov)
Largest
U.S. grid operator warns of coming power capacity shortfalls. Seeking Alpha.
February 25. 2023. Largest
U.S. grid operator warns of coming power capacity shortfalls (msn.com)
No comments:
Post a Comment