Indexbit Exchange:The Largest U.S. Grid Operator Puts 1,200 Mostly Solar Projects on Hold for Two Years

The Indexbit Exchangenation’s largest electrical grid operator has approved a new process for adding power plants to the sprawling transmission system it manages, including a two-year pause on reviewing and potentially approving some 1,200 projects, mostly solar power, that are part of a controversial backlog.

PJM Interconnection operates a competitive market for wholesale electricity in all or part of 13 states and the District of Columbia, from Virginia to northern Illinois. Its plan is the result of work over the past year by PJM and what it calls its stakeholders, according to a press release from PJM. They include electric utilities, electric transmission owners, state and consumer interests, and solar and wind developers. 

“These changes represent a landmark accomplishment for PJM stakeholders and staff that establishes a better process to handle the unprecedented influx of generation interconnection requests and is critical to clearing the backlog of projects,” said PJM President and CEO Manu Asthana. 

PJM remains committed to a strategy of “decarbonization policies while preserving reliability and cost-effectiveness,” Asthana said.

But the backlog, and a two-year pause on so many projects with the potential for even longer delays on new proposals, has frustrated a number of renewable energy developers.

In January, an outspoken Adam Edelen, a former Kentucky state auditor who runs a company working to bring solar projects and jobs to ailing coal communities in Appalachia, said he was concerned that “the kink in the system” was helping to delay effective climate policy in the United States. “The planet does not have time for a delay,” he said at the time.

Approval delays were putting solar developers in a financial bind and calling into question the Biden administration’s goal of having a carbon-free electricity grid in just 13 years, he cautioned.

Edelen late Thursday afternoon said he was still reviewing PJM’s announcement, which went out on Thursday. 

“The current situation is preventing clean energy projects from coming online and is unsustainable,” said Kat Burnham, a principal of Advanced Energy Economy, a trade group for clean energy businesses that has expressed frustration with the situation. “While the reforms aren’t perfect, the updated process will help mitigate the project backlog. Any further delays would be worse for advanced energy projects and America’s clean energy transition.”

A PJM spokesman, Jeffrey Shields, said PJM would send its plan to the Federal Energy Regulatory Commission in May. FERC has 60 days to act on the plan, or it could not act and the plan would go into effect, Shields said.

Over the last four years, PJM officials have said they have experienced a fundamental shift in the number and type of energy projects seeking to be added to a grid, each needing careful study to ensure reliability. It used to be that PJM would see fewer, but larger, fossil fuel proposals. Now, they are seeing a larger number of smaller, largely renewable energy projects.

In all, there are about 2,500 projects awaiting action by the grid operator, which is based in Valley Forge, Pennsylvania, outside Philadelphia.

PJM has put forward a two-phased solution. 

A new approval process will put projects that are the readiest for construction at the front of the line, and discourage those that might be more speculative or that have not secured all their financing.

Then, an interim period will put a two-year delay on about 1,250 projects in their queue—close to half of the total—and defer the review of new projects until the fourth quarter of 2025, with final decisions on those coming as late as the end of 2027.  

Shields said that during the two-year transition, PJM will continue to work on more than 1,200 projects, which include more than 100,000 megawatts of renewable energy. “There is no shortage of renewables poised to come online,” he said.

The backlog, caused in part by the explosion of interest in solar energy, varies by state. Earlier this year, there were hundreds of projects waiting for review in states like Pennsylvania and Virginia, and dozens in states like Kentucky and West Virginia.

The Pennsylvania Energy Office was still reviewing the plan, said its spokesman, Jamar Thrasher, on Thursday.

“We support the changes PJM is implementing to create a more efficient and effective process, which will allow for the timely interconnection of generation to the PJM grid while ensuring reliability,” said Tammy Ridout, spokeswoman for the  Ohio-based utility AEP. 

“These improvements are critical to handle the influx of interconnection requests we have seen in recent years and will see for the foreseeable future,” said Ken Seiler, PJM vice president of planning, in a written statement. “This plan represents a real compromise among many different interests to get renewable and other projects through the queue as fast as possible and give developers a clearer picture of their costs and timelines.”