Market Insights

FERC, ERCOT Aim To Accelerate Renewable-To-Grid Connection

December 20, 2023 by Jake Hertz

Federal Energy Regulatory Commission reforms and a new Texas program could streamline the process of integrating renewable energy into the power grid.

A major concern in the power industry is integrating a growing number of renewable energy sources and storage solutions into the grid. To this end, federal and state authorities are re-evaluating traditional grid interconnection and transmission planning models.

 

Connecting renewable energy sources to the grid can be challenging.

Connecting renewable energy sources to the grid can be challenging. Image used courtesy of National Renewable Energy Laboratory

 

Recently, actions by the Federal Energy Regulatory Commission (FERC) and the Electric Reliability Council of Texas (ERCOT) have led to significant developments in renewable energy-to-grid integration. FERC’s Order No. 2023 and ERCOT’s “connect and manage” program can remove barriers and accelerate processes. 

 

The Challenges of Grid Integration of Renewables

Integrating energy from renewable sources into the existing grid presents numerous technical and operational challenges. 

Traditional power grids were designed for the centralized, predictable power flows offered by large-scale fossil fuel generators. However, renewable energy sources are decentralized and inherently variable. This introduces complexities in maintaining grid stability, managing power flow, and ensuring a reliable electricity supply.

 

The general structure of integrating renewables into the grid.

The general structure of integrating renewables into the grid. Image used courtesy of Alsaif et al.

 

Additionally, renewable energy sources often require new transmission infrastructure to connect remote generation sites to the grid. This grid interconnection process can be time-consuming and costly, with substantial network upgrades often needed to handle the additional power flows. The growing backlog of interconnection requests and the time taken to process these requests have become a significant bottleneck in the transition to renewable energy.

 

FERC Order No. 2023: A Regulatory Shift

In response to these challenges, FERC issued Order No. 2023, marking a pivotal shift in regulatory approach. Issued on July 28, 2023, this Order aims to reform the procedures and agreements for integrating new generating facilities into the grid. The primary objective is to streamline the interconnection process and reduce the backlog of projects waiting for grid access.

The Order introduces several reforms to the pro forma interconnection agreements and procedures under Open Access Transmission Tariffs. These reforms are designed to expedite the process, making it more efficient and less time-consuming for new-generation projects, especially renewables, to connect to the grid. 

For example, one of the key aspects of this Order is the facilitation of "cluster studies," which allow multiple projects in the same geographical area to be studied together, potentially reducing study times and costs.

 

ERCOT's "Connect and Manage" Approach

Parallel to FERC's regulatory reforms, ERCOT's "connect and manage" model represents an operational shift in handling grid interconnections. This approach allows new generators to connect to the grid more quickly by focusing on the local upgrades necessary for each project rather than waiting for comprehensive network upgrades.

 

Increase in renewable energy projects waiting for grid connection.

Increase in renewable energy projects waiting for grid connection. Image used courtesy of EIA

 

ERCOT's model has been particularly effective in integrating renewable energy sources. By reducing the need for extensive network upgrades, this approach has expedited the interconnection process, allowing for faster and more efficient integration of renewables. ERCOT's success in bringing 14.2 GW of new capacity online in just two years using this model is a testament to its effectiveness. 

However, this approach also requires careful management of operational issues like voltage stability and the need for ongoing transmission planning reforms.

 

Reimagining the Grid

The combined impact of FERC's Order No. 2023 and ERCOT's "connect and manage" approach could significantly alter the landscape of grid interconnection and renewable energy integration. These developments represent regulatory and operational shifts essential for the power grid's evolution in the era of renewable energy. While challenges remain, particularly in balancing rapid interconnection with grid stability and reliability, these initiatives offer promising strategies for accelerating the transition to a sustainable energy future.