Breaking Through the PJM Interconnection Queue Crisis

The clean energy transition is reaching a critical inflection point. Over the past decade, states have led the way in planning and incentivizing the development of renewables by setting ambitious targets known as renewable portfolio standards (RPS.) The passage of the Inflation Reduction Act (IRA) in 2022, the most ambitious climate legislation in U.S. history, will further boost the availability of cost-effective renewable power. Yet, even with state and federal policies being aligned, renewables are facing stiff headwinds at Regional Transmission Organizations (RTOs) and grid managers, where wind and solar projects can languish for years awaiting approval to connect to the grid. It’s a situation that threatens to delay the switch to zero-emission resources and stymie the progress states have made to usher in clean energy economies.

In a new report, the NRDC analyzed the outlook for new transmission in PJM Interconnection, the largest U.S. grid operator, and the impact of reforms designed to ease the logjam of projects awaiting approval to connect to the grid. Our analysis found that the changes will help but are not guaranteed to ensure PJM can meet total demand for renewable power through 2030; additional reforms are needed to fully realize the high-renewable future envisioned under state policies.

About 1,300 gigawatts (GW) of new resources—primarily renewables and storage—represent more than the combined output of all power plants operating in the United States today, but are waiting to connect to power grids across the country. At PJM, which coordinates wholesale power in all or part of 13 states and the District of Columbia, there were more than 202 GW of renewable energy resources stuck in the interconnection queue as of September 2022. For context, there were 200 GW of clean energy resources operating in the entire United States in 2021. The backlog is so severe that in February, PJM said it would stop accepting new applications for grid interconnections. Projects now face an average delay of nearly four years just to get connected.

Changes are desperately needed, but in the meantime, PJM is resisting accountability and casting blame on states and developers. In February, it released a report forecasting a reliability crisis by 2030 and placing the blame on state policies pushing fossil fuel plants toward retirement. The report conspicuously dismissed the growing stack of queue proposals for clean energy sitting on its own front step.

There are solutions, though. PJM did take the meaningful step of introducing a fast-track process to bolster its market and speed up projects.

PJM also wants to replace its existing first-come, first-served interconnection process with a cluster-based first-ready, first-served approach designed to expedite the processing of interconnection requests and increase the number of projects processed each year. PJM has also proposed a schedule to work through the existing backlog of solar, wind, and storage projects waiting to connect. Separately, FERC is also considering interconnection reform on a federal level.

Coordination and action are needed to make these plans work, and to course-correct in time to help states meet RPS goals. In the meantime, new projects seeking to take advantage of federal incentives through the IRA will have to wait until 2025, when PJM anticipates new recourses will begin interconnection studies. The new cluster study approach will result in more projects moving through the queue and fewer delays, but until then, limited new supply coming through the interconnection queue may slow states’ ability to accelerate decarbonization efforts.

Transmission expansion is critical to delivering new renewable energy to load centers: A study from Princeton University and the National Renewable Energy Laboratory estimates that the transmission system will need to expand by 60 percent by 2030 to accommodate the demand for renewables. Easing delays in the interconnection queue is among the challenges to meeting increased demand. PJM’s proposed reforms are one step toward more unified, strategic planning, but they do not adequately address future renewable energy demand. Further action and coordination will be necessary from RTOs, utilities, and state government.