Worldwide & the U.S. Has Billions for Wind and Solar Projects. Good Luck Plugging Them In. New York Times

PJM, the grid operator, now has 2,700 energy projects under study — mostly wind, solar and batteries — a number that has tripled in just three years. Wait times can now reach four years or more, which prompted PJM last year to?pause new reviews and overhaul its processes .

Delays can upend the business models of renewable energy developers. As time ticks by, rising materials costs can erode a project’s viability. Options to buy land expire. Potential customers lose interest.

Two years ago, Silicon Ranch, a solar power developer, applied to PJM for permission to connect three 100-megawatt solar projects in Kentucky and Virginia, enough to power tens of thousands of homes. The company, which often?pairs its solar arrays with sheep?grazing , had negotiated purchase options with local landowners for thousands of acres of farmland.

Today, that land is sitting empty. Silicon Ranch hasn’t received feedback from PJM and now estimates it may not be able to bring those solar farms online until 2028 or 2029. That creates headaches: The company may have to decide whether to buy the land before it even knows whether its solar arrays will be approved.

“It’s frustrating,” said Reagan Farr, the chief executive of Silicon Ranch. “We always talk about how important it is for our industry to establish trust and credibility with local communities. But if you come in and say you’re going to invest, and then nothing happens for years, it’s not an optimal situation.”

PJM?soon plans to?speed up its queues ?— for instance,?by studying projects in clusters rather than one at a time?— but needs to clear its backlog first.

‘Imagine if we paid for highways this way’

A potentially bigger problem for solar and wind is that, in many places around the country, the local grid?is clogged, unable to absorb more power.

That means if a developer wants to build a new wind farm, it might have to pay not just for a simple connecting line, but also for deeper grid upgrades elsewhere. One planned wind farm in North Dakota, for example,?was?asked to pay for?multimillion-dollar upgrades ?to transmission lines hundreds of miles away in Nebraska and Missouri.

These costs can be unpredictable. In 2018, EDP North America, a renewable energy developer, proposed a 100-megawatt wind farm in southwestern Minnesota, estimating it would have to spend $10 million connecting to the grid. But after the grid operator completed its analysis, EDP learned the upgrades would cost $80 million. It canceled the project.

That creates a new problem: When a proposed energy project drops out of the queue, the grid operator often has to redo studies for other pending projects and shift costs to other developers, which can trigger more cancellations and delays.

It also creates perverse incentives, experts said. Some developers will submit multiple proposals for wind and solar farms at different locations without intending to build them all. Instead, they hope that one of their proposals will come after another developer who has to pay for major network upgrades. The rise of this sort of speculative bidding has further jammed up the queue.

“Imagine if we paid for highways this way,” said Rob Gramlich, president of the consulting group Grid Strategies. “If a highway is fully congested, the next car that gets on has to pay for a whole lane expansion. When that driver sees the bill, they drop off. Or, if they do pay for it themselves, everyone else gets to use that infrastructure. It doesn’t make any sense.”

A better approach, Mr. Gramlich said, would be for grid operators to plan transmission upgrades that are broadly beneficial and spread the costs among a wider set of?energy providers and users, rather than having individual developers fix the grid bit by bit, through a chaotic process.

There is precedent for that idea. In the 2000s, Texas officials saw that existing power lines wouldn’t be able to handle the growing number of wind turbines being built in the blustery plains of West Texas and?planned billions of dollars in upgrades . Texas now leads the nation in wind power. Similarly, MISO, a grid spanning 15 states in the Midwest, recently?approved $10.3 billion in new power lines , partly because officials could see that many of its states had set ambitious renewable energy goals and would need more transmission.

But this sort of proactive planning is rare, since utilities, state officials and businesses often argue fiercely over whether new lines are necessary — and who should bear the cost.

“The hardest part isn’t the engineering, it’s figuring out who’s going to pay for it,” said Aubrey Johnson, vice president of system planning at MISO.