Over the past year, meaningful clean energy policy has eluded Congress and frustrated those aiming to take tangible steps to address climate change through the buildout of solar, wind, and energy storage.

Lacking support from Senate Republicans, and from Democrat Sen. Joe Manchin of West Virginia, the failure to pass clean energy bills has left advocates with little certainty about the energy transition's future.

But seismic change is underway a few blocks north of Capitol Hill. The Federal Energy Regulatory Commission (FERC) has, over the last three months, proposed reforms to transmission planning and, more recently, interconnection policies with potentially significant positive steps for clean energy deployment.

"It's big," said Jeff Dennis, managing director of the trade group Advanced Energy Economy and a former FERC policy staffer. "FERC teed up probably, arguably, the most aggressive agenda that I've seen a commission tee up."

Dennis joined the Factor This! podcast to break down the Notice of Proposed Rule Making (NOPR) issued by FERC on June 16 related to generator interconnection reform. Subscribe to Factor This! wherever you get your podcasts.

Delays and costs associated with tying clean energy projects to the grid are seen by many as one of the greatest threats to U.S. decarbonization goals (although FERC chose to not take on the issue of interconnection cost allocation in the latest NOPR).

Jeff Dennis, managing director of Advanced Energy Economy, was a guest on Episode 8 of the Factor This! podcast.

"I think political opponents will characterize [the NOPRs on transmission planning and interconnection reform] as FERC trying to be an agent of the clean energy industry or doing that climate policy," Dennis said. "But really, FERC is reacting to what is happening in the industry."

There are currently 8,100 projects in interconnection queues representing more than 1,000 GW of new generation capacity and an additional 400 GW of energy storage capacity, according to FERC.

On average, it takes 3.7 years for a project to make it through the queue and be placed into service and only around 23% of projects make it over the finish line.

The new rules, the commissioners believe, would increase the speed of interconnection by imposing deadlines on transmission owners to conduct studies (or face penalties) and requiring more stringent financial readiness for developers.

Under the proposed first-ready, first-served cluster study process, transmission providers would conduct larger interconnection studies encompassing numerous proposed generating facilities, rather than separate studies for each individual generating facility. This approach would increase the efficiency of the interconnection process and help minimize delays, said FERC.

Today, some developers enter the queue and, after learning the final cost for their project to interconnect, drop out. That action triggers a cascade of new studies that must be conducted. The new proposed cluster study approach would include a single annual period of re-studies.

In addition, two new mechanisms would allow developers to get the information they need without entering the queue. First, they could request that an informational interconnection study be conducted. Second, they could look at the transmission providers’ newly developed and publicly available interactive visual representation of available interconnection capacity, which FERC is also proposing in the NOPR.

In order to enter the queue at all, developers must demonstrate financial commitments and readiness.

The NOPR proposes to impose firm deadlines and establish penalties if transmission providers fail to complete interconnection studies on time, except in instances where force majeure is applicable.

For the first time, transmission providers would have “real deadlines that they have to meet and if they don’t meet, they’ll be subject to penalties,” said Chair Richard Glick.

Additionally, the NOPR proposes a more detailed affected-systems study process, including a specific modeling standard and pro forma affected system agreements. The NOPR also proposes reforms to administratively simplify the process of studying interconnection requests that are all related to the same state-authorized or mandated resource solicitation.

The NOPR proposes requiring transmission providers to allow more than one resource to co-locate on a shared site behind a single point of interconnection, and share a single interconnection request. Today, a solar project coupled with energy storage, for example, is required to be studied twice even though the project might interconnect at a single point. The proposed reform would allow those hybrid projects to be treated as one.

In addition, non-synchronous (that is, inverter-based) projects entering the queue must have the ability to ride through abnormal frequency and voltage conditions in accordance with reliability standards PRC 24-3 or subsequent standards, said Edward Gross, of the FERC Office of Electric Reliability

This would create a minimum standard that would remove barriers for co-located resources by creating a more efficient standardized procedure for these types of configurations, said FERC. It would be in accordance with NERC’s recommendations for interconnecting inverter-based resources.

The NOPR also proposes allowing interconnection customers to add a generating facility to an existing interconnection request under certain circumstances without automatically losing their position in the queue. The NOPR also proposes requiring transmission providers to consider alternative transmission solutions if requested by the interconnection customer.

Finally, the NOPR proposes certain modeling, as well as performance requirements, for non-synchronous generating facilities to address the unique characteristics of the changing resource mix. 

FERC is proposing that transmission providers, at the request of the interconnection customer, use operating assumptions for interconnection studies that reflect the proposed operation of an electric storage resource or co-located resources containing electric storage, including hybrid resources.

For example, if a developer sites energy storage next to a solar facility and only plans to use the storage to absorb excess solar generation at certain times and only feed it to the grid under certain parameters, then transmission owners must study it that way. Today, energy storage studies essentially assume that the asset is being fully deployed into the grid, even if it is not intended to be operated that way.

The draft NOPR proposes to allow transmission providers to hold interconnection customers to the intended operation of their electric storage resource either by memorializing the operation restrictions in the interconnection agreement or by installing control technologies. Failure to operate within the agreement paraments would trigger breach provisions.

Implementation of FERC's final rule on interconnection reform will look different than other actions by the agency.

Clean energy stakeholders may think of the headaches associated with the implementation of FERC Order 2222, which requires that aggregated distributed energy resources be allowed to participate in wholesale markets. Some transmission grid operators have put forward years-long rollout plans that have, at times, faced scrutiny for not aligning with FERC's ruling.

But the interconnection NOPR makes changes to "a proforma set of documents that utilities are expected to adopt verbatim," Dennis said, "unless they can prove the deviations they want to make are consistent with or are superior to those performance requirements."