The nation’s largest electric grid operator, PJM Interconnection, is so clogged with requests from energy developers that want to connect to its regional transmission network in the eastern United States that it is planning a two-year pause on reviewing more than 1,200 energy projects, most of them solar power. PJM is working on a proposal that would update its process for approving connections during the two-year pause. Some see this pause as a barrier for a rapid transition to non-carbon energy that President Biden is touting and may cause some solar developers to be put in a financial bind. It also raises questions about the feasibility of the Biden administration’s goal of having a carbon-free electricity grid in just 13 years. It indicates PJM has significant concerns about the impact of so much proposed intermittency upon the grid that they are responsible for managing.
PJM operates a competitive market for wholesale electricity in all or part of 13 states and the District of Columbia, including Pennsylvania, West Virginia and Kentucky. Currently, wind, solar and hydropower plants make up about 6 percent of its distribution mix. Over the last four years, PJM has experienced a shift in the number and type of energy projects, many of which are small projects, seeking to be added to its grid that extends from Virginia to northeast Illinois. Each projects needs careful study to ensure reliability. About 2,500 projects are awaiting action by the grid operator, which is based in Valley Forge, Pennsylvania, outside Philadelphia.
The length of the PJM backlog varies by state. In Pennsylvania, 520 energy projects are currently in the queue, 437 of which are solar. Virginia has 417 solar projects in the queue. Kentucky and West Virginia have 110 and 57 solar projects, respectively, awaiting approval by PJM.
PJM Proposed Process
PJM is proposing a two-phased process to clean-out the backlog. The new approval process would put projects that are the most ready for construction at the front of the line, discouraging those that might be more speculative or that have not secured all their financing. To implement it, PJM is proposing an interim period with a two-year delay on about 1,250 projects in the queue, and a deferral on the review of new projects until the fourth quarter of 2025, with final decisions on those coming at the end of 2027.
PJM established a task force to work its proposal through its member committees, including electric utilities and energy developers. PJM’s plan is to submit the proposal to the Federal Energy Regulatory Commission for finalization by May. Experts expect to see the final proposal end up in court because of its impact on determining financial winners and losers.
PJM may not be able to attain the Biden goal of achieving 100 percent carbon-free electricity by 2035. In December, PJM announced a study to attain a 50-percent renewable energy mix by 2035. Factoring in the region’s nuclear energy, the PJM grid could reach 60 to 70 percent carbon free electricity by then.
PJM processes approved by FERC often become models for other regions.
Nationally, grid operators have a growing queue of energy projects, many of which do not pan out and clog up the system. In 2021, the Lawrence Berkeley National Laboratory found that only 24 percent of projects nationally seeking connection from 2000 to 2015 were built, and completion percentages since then appeared to be declining.
Conclusion
PJM is putting in place changes to help improve the process of reviewing applications for projects that want to connect to its electric grid. PJM plans to prioritize projects that have financing and other key aspects secured, moving those forward first. PJM, the country’s largest grid operator, is not a policy maker, and is fuel and technology neutral, serving 13 states and the District of Columbia. Eleven of those states and D.C. have some renewable or non-carbon energy. But, PJM must ensure that any energy transition brought on by state or federal policies has to maintain reliability and do it cost-effectively. PJM’s plans may not result in a 100 percent carbon-free grid by 2035, which is President Biden’s goal.
The PJM grid operator is facing reality in that such a massive transition in just 13 years could cause major havoc resulting in brown outs and black outs and soaring electricity prices as a carbon-free grid would require very expensive battery backup that is provided currently by existing natural gas and coal units.
President Biden needs also to face reality that to reach a 100 percent carbon-free grid means that the 60 some percent of the electricity that is now generated by coal and natural gas would need to be replaced by renewable energy as well as meeting new demands for electricity coming from Biden’s transition to electric vehicles and all electric homes. Tesla founder Elon Musk has suggested that the electric vehicle transition would require doubling the electricity production on the grid. With solar and wind representing just 11 percent of the nation’s grid after decades of federal subsidies and state mandates, Biden’s goal seems to be quite implausible. People charged with keeping the grid reliable and affordable seem to be acknowledging that.
