Thousands of renewable energy projects in the United States are facing significant delays and escalating costs as they remain stuck in grid interconnection queues, according to a recent study conducted by the American Council on Renewable Energy (ACORE).
In a groundbreaking analysis, ACORE quantified the potential economic advantages of onshore renewable energy projects awaiting grid connection in PJM, the largest electricity market in the country.
The report, titled “Power Up PJM,” showcases the remarkable potential if these renewable projects were to be brought online at a pace similar to PJM's approval rate for developments from 2011 to 2016. The study reveals that an estimated 34 GW could achieve commercial operation in the region within the next four years, resulting in nearly 200,000 job-years and approximately $33 billion in capital investment.
ACORE President and Chief Executive, Gregory Wetstone, voiced concerns over the immense financial losses and missed job opportunities, attributing them to flawed interconnection and transmission planning processes. Wetstone stated, “Tens of billions of dollars and thousands of good-paying jobs are being left on the table because of broken interconnection and transmission planning processes.”
The report emphasizes that the current backlog in grid interconnections is unparalleled and stresses the urgent need for common-sense reforms to streamline the interconnection queues, thereby accelerating the transition to renewable energy. Such reforms, if implemented, would not only promote the renewable energy sector but also deliver substantial economic and health benefits to states throughout America.
In an effort to address these challenges, the Federal Energy Regulatory Commission (FERC) recently approved a series of procedural reforms. These reforms have initiated a four-year transition period for PJM to evaluate pending interconnection applications, marking a positive step forward.
ACORE's comprehensive analysis focuses on the 2003 renewable energy projects within this transition cycle for PJM. The report provides a state-by-state breakdown of the potential job creation and capital investment these projects could bring. Virginia emerges as the state projected to experience the greatest benefits, with the potential for over 50,000 job-years and $8.5 billion in capital investment. Illinois follows closely with nearly 32,000 job-years and $5.5 billion in capital investment, while Ohio anticipates over 29,500 job-years and $4.8 billion in capital investment. Indiana also stands to gain, with projections of nearly 29,000 job-years and $4.7 billion in capital investment.
Moreover, the report highlights that interconnection reforms could have yielded even greater advantages. With proactive transmission planning, an additional 100,000 job-years and nearly $17 billion in capital investment could have been realized over the next four years.
“Power Up PJM” concludes with a set of recommendations directed towards both PJM and FERC, aiming to enhance the interconnection process and alleviate future backlogs. The implementation of these recommendations would play a vital role in expediting renewable energy projects and promoting sustainable economic growth.
