Federal regulators on Thursday approved new rules to speed up the process for connecting wind and solar projects to the electric grid, in an attempt to reduce the growing delays that have become one of the biggest obstacles to building renewable energy in the United States.
Energy companies are investing hundreds of billions of dollars in wind farms, solar arrays and batteries, spurred on by federal tax breaks and falling costs. But these projects face a severe bottleneck: It is getting harder and taking longer to connect new power plants to the power lines that carry electricity to homes and businesses.
More than 10,000 energy projects — mostly wind, solar and batteries — were seeking permission to connect to electric grids at the end of 2022, up from 5,600 two years earlier. Grid operators have become overwhelmed by the volume. It now takes five years for the typical power plant to get approval, twice what it did a decade ago, and developers say the process has become dysfunctional.
The new rules by the Federal Energy Regulatory Commission, which oversees electricity markets, aim to streamline that approval process, known as the interconnection queue.
Traditionally, grid operators have reviewed power plant proposals one by one as they come in, conducting lengthy studies to make sure the projects won’t disrupt the existing grid. That worked well when developers were building a handful of coal or gas plants each year. But now developers want to build thousands of smaller wind, solar and battery projects and the process has broken down.
The new rules will require grid managers to study projects in batches and prioritize those that are closest to construction, a reform that several regional grids are already pursuing. Other changes include penalties for grid operators that fail to complete studies on time; stricter financial requirements for applicants to weed out speculative proposals; and changes that could make it easier to integrate batteries into the grid.
“Our transmission policies must keep pace with the rapid changes in the makeup of our nation’s power generation resource mix,” said Willie Phillips, a Democrat who chairs the energy commission. “We know that long backlogs create uncertainty for everyone, and that increases costs for everyone.”
Energy developers said the reforms could prove helpful, though they still wouldn’t solve many of the most serious problems hampering renewable energy.
“While this is a decisive step forward, we have a long way to go before we clear the two terawatts of generation and storage that are trapped in the interconnection queue,” said Melissa Alfano, director of energy markets at the Solar Energy Industries Association.
One major issue, for instance, is that in many parts of the country, existing grids are running out of spare capacity, which means that developers often have to pay for costly upgrades before they can connect new wind and solar projects. In the Mid-Atlantic and Midwest, these costs have roughly doubled since 2019. Funding these upgrades can be chaotic, and developers often drop out of the queue when confronted with prohibitive price tags, creating more delays.
A better approach, some experts say, would be for grid operators to plan transmission upgrades that are broadly beneficial and spread the costs among a wider set of energy providers and users, rather than having individual developers fix the grid bit by bit. Grid operators in California and the Midwest have recently done that sort of long-term planning, but it is still relatively rare.
The federal energy commission has proposed a separate rule that could, in theory, encourage all grid operators to plan better for renewable energy growth. But that rule, which is not yet finalized, may prove more contentious, since different utilities and states often disagree sharply over how to share the costs of new transmission.
Earlier this month, Senator Chuck Schumer of New York, the Democratic majority leader, sent a letter to the commission saying he was concerned that its proposed grid-planning rule was insufficient. “The success or failure of this commission will be defined by how they address these critical transmission rules,” he added.
Over the past year, congressional Democrats have expressed growing alarm that efforts to fight climate change could founder if the nation’s electric grid isn’t overhauled. While last year’s Inflation Reduction Act poured hundreds of billions of dollars into clean energy technologies, one recent analysis found that half of the climate benefits of that bill could be lost if the United States can’t build new transmission at a faster pace to accommodate more renewable energy.
On Thursday, Mr. Phillips, the commission chairman, said he was negotiating with his colleagues over the grid-planning rule. The five-seat commission is currently split between two Democrats and two Republicans with one seat vacant; its previous Democratic chairman stepped down last year after a clash with Senator Joe Manchin III, Democrat of West Virginia, over gas pipelines.
“We’re trying to get this done as fast as we can,” said Mr. Phillips. “It has always been a top priority.”
