Howard Plante
Vice President of Procurement
Freedom Energy
Published: September 19, 2023
Introducing Order No. 2023: Speeding Up Approvals
On July 28, 2023, the Federal Energy Regulatory Commission (FERC) issued Order No. 2023 which brings sweeping reforms to the interconnection process for large electric generation projects (20 megawatts and greater) and small generation projects (under 20 MW), by reducing the time it takes to for the projects to proceed through the interconnection process. The average time it takes for a project to go through the approval process is approximately five years. Only a few years ago, the process took about 3.5 years. Just as important, it means that proposed renewable generation projects may get approved in a timelier and more cost-efficient manner.
In the past, FERC used a first come first served approach to the interconnection process, studying one project at a time, creating a significant backlog of projects in the queue. Order No. 2023 will now utilize a first ready process and implement a cluster study, studying several projects as a group, at the same time focusing on those projects that have the greatest chance of success and becoming operational.
Unlocking Renewable Potential: The Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA) provided increased investment incentives in renewable generation projects, such as solar, wind, and battery storage. That investment resulted in a significant increase in the number of projects seeking approval. Independent System Operators such as ISO-NE and Regional Transmission Operators found it increasingly difficult to keep up with requests. By implementing a cluster study approach, FERC expects that it will help reduce the backlog in the queue. Order 2023 requires ISOs (independent system operators) and RTOs (regional transmission organizations) to submit revised interconnection procedures to FERC 90 days after the rule is published in the Federal Register. Generators seeking interconnection will be provided with more information regarding costs to connect at specific locations, helping to determine whether a project is cost effective prior to submitting a request.
The Potential Ahead
At the end of 2022 there were approximately 2,030 gigawatts of generation and storage projects in the interconnection queue. That is almost twice as much as the 1,250 GW of total generation on the existing grid. Most of the proposed generation in the queue are wind, solar and battery storage. The chart below compares the types and amounts of proposed projects in 2022 vs. 2010.
Solar energy accounts for the greatest number of projects in the queue, and the number of wind requests has increased substantially. The amount of offshore wind in the queue is three times the amount of the current Administration’s goal by 2030. As battery storage technology has improved, the number of requests has expanded, assisted by various local utility incentive programs.
A Mix of Energies: Renewables and Nuclear
While we are moving towards renewable energy, and while we think of nuclear power plants as mostly aging facilities with the average age of 42 years, the newest reactor to go into commercial operation was on July 31, 2023, in Georgia. A second new reactor at the same plant is scheduled to go online at the end of this year or the first quarter of 2024. The next most recent reactor to enter service was in October 2016 in Tennessee.
Shaping the Future: Grid Transformation
The US electric grid is certainly on a path of reform and approval process improvement by way of Order No. 2023 and the Inflation Reduction Act. The IRA increased the incentives for renewable generation which will very likely increase the growth and expansion of interconnection requests in the next few years. Not every plant in the queue will get built but we expect the renewable sector to increase considerably and more quickly with a streamlined approval process.
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