Powering Strong Communities

Report Identifies Bottlenecks That Keep Energy Storage Projects From Being Built

Most energy storage projects are not built because of interconnection bottlenecks, according to a new report.

The report, The Interconnection Bottleneck Why Most Energy Storage Projects Never Get Built, was prepared by the Applied Economics Clinic on behalf of Clean Energy Group and found that local interconnection processes have not kept up with rising interest in and incentives for energy storage resources.

“Nationally, almost all of the projects waiting in interconnection queues are for solar, wind and storage projects,” Todd Olinsky-Paul of Clean Energy Group, said in a statement. “The wait to interconnect is so long that many projects drop out and never end up being built. Those that don’t drop out due to long wait times can face enormous costs for distribution grid upgrades, which makes projects uneconomic. This poses a barrier to energy storage deployment and hinders the ability of states to meet clean energy and decarbonization goals.”

The report synthesized information gathered in 11 interviews with stakeholders in interconnection policy debates conducted by the Applied Economics Clinic between August 2022 and January 2023.

The report used Massachusetts as a case study because the state provided an instructive example because of its advanced energy storage targets and incentive programs, advanced decarbonization and clean energy goals, and the steps the state has begun to take to address interconnection issues.

Interconnection barriers have already had negative impacts in Massachusetts, the report’s authors said, noting that, at the end of 2022, the state’s interconnection queue had 2,321 megawatts of proposed solar capacity, 429 MW of standalone storage capacity, and 868 MW of hybrid capacity. In comparison, the state had 1,195 MW of existing solar capacity in 2021 and 181 MW of storage capacity.

The report said interconnection problems are not unique to a single state or region and noted that at the national level a recent Lawrence Berkeley National Laboratory study found 1.9 million MW of solar, storage, and wind resources waiting in transmission interconnection queues. So, while the Applied Economics Clinic-Clean Energy Group report focused on Massachusetts, the report’s authors said the lessons learned are broadly applicable.

The report’s authors recommended that stakeholders, such as independent system operators, regional transmission operators, and the Federal Energy Regulatory Commission:

  • create interconnection processes that take a systemic view of applications rather than examining interconnection applications and grid upgrades in isolation;
  • continuously iterate interconnection processes to build in regular improvements, examine effectiveness, and coordinate stakeholders to tackle ad hoc coordination;
  • integrate solutions on multiple fronts simultaneously, and
  • spread distribution system upgrade costs over a broader set of stakeholders than just the projects applying for interconnection.

Overall, the report’s recommendations aim to tackle the core problems of interconnection, such as bottlenecks arising from deciding who should pay for system upgrades, not making system upgrades proactively, and not considering storage or related control technologies adequately. “It is likely that a combination of solutions is needed, as smaller process-related changes will not overcome the main interconnection barriers on their own,” the report’s authors said.