Why won’t PJM let batteries and clean power bolster a stressed-out grid?
PJM, the largest electric grid operator in the U.S., has a major problem — old, dirty power plants are closing down faster than new clean energy resources can replace them. This mounting grid crisis is already driving up electricity costs for the 65 million people living in PJM’s territory, which stretches from the mid-Atlantic coast to the Great Lakes. By the end of the decade, the situation could become so dire that it threatens the reliability of PJM’s grid. The blame falls in large part on PJM’s worst-in-the-nation grid-interconnection backlog. New energy projects looking to come online in its region face yearslong wait times before they’re even considered. To make matters worse, energy companies and climate advocates say PJM is dragging its feet on one straightforward way to work around this logjam. Existing wind and solar farms and fossil-fired power plants often have more grid capacity than they actually need during many hours of the day or seasons of the year. Developers could add batteries or other new energy capacity next to these power plants and make use of that surplus grid space. It wouldn’t eliminate the trouble altogether, but it would make a serious dent, clean energy developers say. Federal regulators have repeatedly directed grid operators to allow power plant owners to pursue such additions under what’s called “surplus interconnection service” (SIS) rules. But PJM has made it next to impossible for power suppliers to do so, even as most other U.S. grid operators have abided. Critics say PJM’s refusal to follow suit is particularly frustrating: By barring this faster approach, PJM is making its bad grid situation worse. That’s why those critics are asking for federal intervention. This summer, clean energy industry groups and environmental advocates asked the Federal Energy Regulatory Commission to deny the interconnection reform plan submitted by PJM, which was required by last year’s FERC Order 2023. Among their objections to PJM’s plan is its refusal to change the rules it now uses to deny these fast-track additions. In July, renewable energy and battery developer EDP Renewables (EDPR) filed a complaint with FERC asking it to overturn PJM’s denial of its plan to add solar to a wind farm in Indiana. It’s just one of the failed surplus interconnection proposals the developer has brought to the grid operator. Trade groups Advanced Energy United, the American Clean Power Association, and the Solar Energy Industries Association; the environmental group Sierra Club; and fellow clean energy developers Invenergy Solar Development North America and EDF Renewables added their support to EDRP’s complaint. “We go to PJM and say, ‘Look at this amazing deal. We already have the capacity. Our transmission system is underutilized during the periods we need it. Let’s connect this,’” David Mindham, EDPR’s director of regulatory and market affairs, said during a September webinar. “And they say no.” Getting more round-the-clock use out of the grid Mindham’s comments came during a presentation of a report from Gabel Associates, commissioned by the American Council on Renewable Energy (ACORE) and other clean energy industry groups, detailing the potential for using this technique to help PJM meet its growing shortage of electricity generation. The focus of the presentation was on surplus interconnection service, the technical term for what is a fairly simple concept: Let energy projects use the grid interconnection capacity they already possess to its fullest potential. Many energy projects don’t use their maximum capacity all 8,760 hours of the year. So-called “peaker” plants — fossil-gas-fired power plants that are turned on only during times of high electricity demand — may run just 250 to 1,500 hours per year, for example. And wind and solar farms generate their full capacity only when the wind is blowing or the sun is shining. That leaves plenty of hours when these projects aren’t using their maximum allowed grid capacity — their “interconnection service,” in FERC parlance. Surplus interconnection service can fill in those gaps. Mike Borgatti, Gabel Associates’ senior vice president of wholesale power and markets services and co-author of the report, offered the example of a 100-megawatt solar farm that could add batteries to store power during the day and send to the grid after the sun goes down. “At the end of the day, you would end up with 100 megawatts of energy that could be supplied by any combination of solar and storage,” he said. “It could be 100 percent storage at some points in time; it could be 100 percent solar at others. It could be, say, 50 megawatts of solar and 50 megawatts of storage. As long as whatever combination of outputs never exceeds 100 megawatts, we’re good to go.” FERC made clear in 2018’s Order 845 and in last year’s Order 2023 that grid operators must enable surplus interconnection service, Borgatti added. And PJM needs to “accelerate new entry from high-capacity-value resources, and we need to do it very quickly.” PJM has about 180 gigawatts of total generation capacity. Of that, 43 to 58 gigawatts are expected to shut down by 2030, according to a March report from its independent market monitor. Meanwhile, electricity demand is forecast to rise at a rapid rate, with an estimated 40 gigawatts of new load expected by 2030. Despite these pressures, new power plant construction has stalled. About 160 gigawatts’ worth of projects that are trying to connect to the grid — almost all of them wind, solar, or batteries — are stuck in the interconnection queue. Borgatti estimated that without changes, only about 6.3 gigawatts of “stuff we need” can be built by 2030. That’s not enough to make up for PJM’s growing electricity demand and shrinking power plant fleet. The upshot, he said, is that PJM faces an impending “resource adequacy shortfall” — a gap between forecasted energy supply and peak demand — of nearly 4 gigawatts by 2029, he said. The underlying barrier is that PJM hasn’t expanded its transmission grid quickly enough to accommodate more energy resources, Borgatti said. That’s a problem bedeviling grid operators across the country, and one FERC has ordered them to solve. But building new transmission lines still takes years to up to a decade. In the face of this grid-capacity challenge, SIS projects are a neat workaround, Borgatti said. Because they make use of previously approved grid capacity, they can undergo an expedited study process that circumvents the standard interconnection queue. That accelerated timeline takes only 270 days, meaning that these projects could go from proposal to construction “within less than a year, theoretically.” What’s more, batteries added to solar and wind farms can store power when the grid doesn’t need it and discharge it when it’s in short supply — something that’s already happening regularly in California and Texas. Batteries can also help meet fast-rising demand from corporate energy buyers like data center developers for clean energy that matches up with their power usage on an hour-by-hour basis, EDPR’s Mindham said.
PJM, the largest electric grid operator in the U.S., has a major problem — old, dirty power plants are closing down faster than new clean energy resources can replace them. This mounting grid crisis is already driving up electricity costs for the 65 million people living in PJM’s territory, which stretches from the…
PJM, the largest electric grid operator in the U.S., has a major problem — old, dirty power plants are closing down faster than new clean energy resources can replace them.
This mounting grid crisis is already driving up electricity costs for the 65 million people living in PJM’s territory, which stretches from the mid-Atlantic coast to the Great Lakes. By the end of the decade, the situation could become so dire that it threatens the reliability of PJM’s grid.
The blame falls in large part on PJM’s worst-in-the-nation grid-interconnection backlog. New energy projects looking to come online in its region face yearslong wait times before they’re even considered.
To make matters worse, energy companies and climate advocates say PJM is dragging its feet on one straightforward way to work around this logjam. Existing wind and solar farms and fossil-fired power plants often have more grid capacity than they actually need during many hours of the day or seasons of the year. Developers could add batteries or other new energy capacity next to these power plants and make use of that surplus grid space. It wouldn’t eliminate the trouble altogether, but it would make a serious dent, clean energy developers say.
Federal regulators have repeatedly directed grid operators to allow power plant owners to pursue such additions under what’s called “surplus interconnection service” (SIS) rules. But PJM has made it next to impossible for power suppliers to do so, even as most other U.S. grid operators have abided.
Critics say PJM’s refusal to follow suit is particularly frustrating: By barring this faster approach, PJM is making its bad grid situation worse. That’s why those critics are asking for federal intervention.
This summer, clean energy industry groups and environmental advocates asked the Federal Energy Regulatory Commission to deny the interconnection reform plan submitted by PJM, which was required by last year’s FERC Order 2023. Among their objections to PJM’s plan is its refusal to change the rules it now uses to deny these fast-track additions.
In July, renewable energy and battery developer EDP Renewables (EDPR) filed a complaint with FERC asking it to overturn PJM’s denial of its plan to add solar to a wind farm in Indiana. It’s just one of the failed surplus interconnection proposals the developer has brought to the grid operator.
Trade groups Advanced Energy United, the American Clean Power Association, and the Solar Energy Industries Association; the environmental group Sierra Club; and fellow clean energy developers Invenergy Solar Development North America and EDF Renewables added their support to EDRP’s complaint.
“We go to PJM and say, ‘Look at this amazing deal. We already have the capacity. Our transmission system is underutilized during the periods we need it. Let’s connect this,’” David Mindham, EDPR’s director of regulatory and market affairs, said during a September webinar. “And they say no.”
Getting more round-the-clock use out of the grid
Mindham’s comments came during a presentation of a report from Gabel Associates, commissioned by the American Council on Renewable Energy (ACORE) and other clean energy industry groups, detailing the potential for using this technique to help PJM meet its growing shortage of electricity generation.
The focus of the presentation was on surplus interconnection service, the technical term for what is a fairly simple concept: Let energy projects use the grid interconnection capacity they already possess to its fullest potential.
Many energy projects don’t use their maximum capacity all 8,760 hours of the year. So-called “peaker” plants — fossil-gas-fired power plants that are turned on only during times of high electricity demand — may run just 250 to 1,500 hours per year, for example. And wind and solar farms generate their full capacity only when the wind is blowing or the sun is shining.
That leaves plenty of hours when these projects aren’t using their maximum allowed grid capacity — their “interconnection service,” in FERC parlance. Surplus interconnection service can fill in those gaps.
Mike Borgatti, Gabel Associates’ senior vice president of wholesale power and markets services and co-author of the report, offered the example of a 100-megawatt solar farm that could add batteries to store power during the day and send to the grid after the sun goes down.
“At the end of the day, you would end up with 100 megawatts of energy that could be supplied by any combination of solar and storage,” he said. “It could be 100 percent storage at some points in time; it could be 100 percent solar at others. It could be, say, 50 megawatts of solar and 50 megawatts of storage. As long as whatever combination of outputs never exceeds 100 megawatts, we’re good to go.”
FERC made clear in 2018’s Order 845 and in last year’s Order 2023 that grid operators must enable surplus interconnection service, Borgatti added. And PJM needs to “accelerate new entry from high-capacity-value resources, and we need to do it very quickly.”
PJM has about 180 gigawatts of total generation capacity. Of that, 43 to 58 gigawatts are expected to shut down by 2030, according to a March report from its independent market monitor.
Meanwhile, electricity demand is forecast to rise at a rapid rate, with an estimated 40 gigawatts of new load expected by 2030. Despite these pressures, new power plant construction has stalled. About 160 gigawatts’ worth of projects that are trying to connect to the grid — almost all of them wind, solar, or batteries — are stuck in the interconnection queue.
Borgatti estimated that without changes, only about 6.3 gigawatts of “stuff we need” can be built by 2030. That’s not enough to make up for PJM’s growing electricity demand and shrinking power plant fleet.
The upshot, he said, is that PJM faces an impending “resource adequacy shortfall” — a gap between forecasted energy supply and peak demand — of nearly 4 gigawatts by 2029, he said.
The underlying barrier is that PJM hasn’t expanded its transmission grid quickly enough to accommodate more energy resources, Borgatti said. That’s a problem bedeviling grid operators across the country, and one FERC has ordered them to solve. But building new transmission lines still takes years to up to a decade.
In the face of this grid-capacity challenge, SIS projects are a neat workaround, Borgatti said. Because they make use of previously approved grid capacity, they can undergo an expedited study process that circumvents the standard interconnection queue. That accelerated timeline takes only 270 days, meaning that these projects could go from proposal to construction “within less than a year, theoretically.”
What’s more, batteries added to solar and wind farms can store power when the grid doesn’t need it and discharge it when it’s in short supply — something that’s already happening regularly in California and Texas. Batteries can also help meet fast-rising demand from corporate energy buyers like data center developers for clean energy that matches up with their power usage on an hour-by-hour basis, EDPR’s Mindham said.