According to a new report from Americans for a Clean Energy Grid, Arlington, Va., transmission line contractors and other electrical contractors are losing out on a lot of work due to excessive costs and significant inefficiencies related to the current system for interconnecting new electric generation sites with the transmission grid.
The report, “Disconnected: The Need for a New Generator Interconnection Policy,” examines the current interconnection process and finds that the current process is costly, slow and unpredictable.
In particular, the report noted that the significant costs triggered by inefficiencies, which require solar and wind developers to submit multiple interconnection applications, leads to wasted time in the queuing of these projects. As a result, many of these projects end up dropping out of the process, necessitating restudies for all remaining generators and prompting delays—and often higher costs—for projects that are part of the same interconnection class year or further down in the interconnection queue.
“That vicious cycle continues, with the next round of wind and solar projects submitting even more interconnection applications to protect against this uncertainty,” stated the report. “Cancelled projects lead to a vicious reinforcing cycle, increasing the potential of further cancellations.”
Adding to the problem, according to the report, is that “The high cost of interconnection is increasing the rate at which generators drop out of the interconnection queue, which exacerbates the uncertainty.”
The implications for line contractors and other electrical contractors are that, the fewer projects that are “ready to go,” the less work that becomes available for these contractors.
Additionally, as the report emphasized, the problem isn’t a lack of demand for new generation interconnection. The problem is inefficiencies in the processes designed to get these new generation and transmission interconnection projects off the ground.
The report urges the Federal Energy Regulatory Commission to work more closely and cooperatively with the nation’s Regional Transmission Organizations to find ways to streamline this process, making it easier for organizations planning to build new and necessary generation (particularly wind and solar) to gain approval for the interconnection processes necessary to bring these generation projects online.