A request by PJM Interconnection to overhaul its interconnection approval process has been given the green light by the Federal Energy Regulatory Commission (FERC). This groundbreaking decision is expected to help clear a rising backlog of both renewable and conventional generation projects and is expected to create much-needed clarity and certainty among project developers and owners amid rising concerns over future grid resilience.
PJM now has FERC authorization for a streamlined “first-ready, first-served” process that gives priority to clusters of projects that are ready to go and require few if any grid improvements. The new process was widely supported during a stakeholder review process as an efficient way to shortcut an approval process that sometimes takes multiple years. Under the approval, PJM may begin reviewing interconnection applications filed since Oct.1, 2021.
The entire power industry is going through an unprecedented transformation and the PJM step is just one of many efforts to improve long-term planning and preparation for a host of new demands. PJM is the regional transmission organization coordinating wholesale power in 13 Mid-Atlantic and Midwestern states, plus the District of Columbia.
PJM has a current backlog of more than 2,700 interconnection requests in its queue, a number similar to the backlog being faced by other independent system operators.
The congestion is largely due to the increase in applications for renewable solar, wind, energy storage or combined generation and storage projects. The increase is being spurred along by aggressive targets for net zero emissions standards enacted in multiple states. Though many of those applications in the backlog are renewable projects, requests for interconnections by conventional gas-fired facilities are also affected.
Navigating the Path Forward
Even with this game-changing step, project developers still will face many of the same challenges that have slowed all-important speed to market.
Every project must meet criteria established by grid studies that are based on models of future load and generating resources needed to support expected future demand and to maintain power quality. Experienced regulatory and transmission planning consultants working within an integrated engineer-procure-construct (EPC) project delivery framework are often an invaluable resource in managing the inevitable questions that will arise with every interconnection request, such as:
- What if my panels and inverters are now being delayed by an overseas manufacturer?
- What if I can only install half of my planned capacity now?
- Will I lose my queue position if I have procurement problems?
- If I miss out on being connected in time for seasonal peak demand, what will this mean for my project financials?
- Are we missing any interpretations from interconnection studies?
Studies and models created by independent system operators lay out the need for new generation resources in response to expected load growth or shifting load on the grid. Applicants must follow the parameters of those studies in making their case for approval to connect with the grid. Consulting partners who often have good working relationships with ISOs developed over many years can provide invaluable insight in shaping the application documents to anticipate questions or concerns and do this the right way, the first time. Factual and insightful answers and innovative solutions to concerns and questions often prove to be the difference between quick approval or lengthy delays.
An integrated EPC team often means that the consultant with knowledge of the review hurdles is working side by side with engineering, procurement and construction professionals. This close collaboration provides a smooth process in understanding the rules changes that may occur during the review process. This insight can be invaluable in navigating through challenges. This is especially critical to funding schedules as owners generally can’t obtain final project financing without the proper interconnection approvals.
Appropriate and timely guidance from skilled, experienced regulatory and transmission planning consultants unlocks a great opportunity to speed a project to market. Now with the possibility of expedited reviews and approvals provided by FERC’s approval the PJM proposal, support like this in an integrated EPC fashion can be the key to keeping your project in the mix with others ready for a green light.
Owners and developers should begin with the end in mind when navigating an increasingly challenging approval queue for connecting renewable energy projects to the grid.