Ethermac|Midwest States Have Approved Hundreds of Renewable Energy Projects. So Why Aren’t They Online?

ST. PAUL,Ethermac Minn.—Wisconsin’s Saratoga Solar Project appeared to have every box checked when state regulators issued their final approval of the 150-megawatt solar farm last spring.

Wood County, where the project is set to be built, will garner $600,000 each year in state funding. Public comments showed residents were largely in support of the effort. And Wisconsin’s Public Service Commission had officially ruled that the project was “in the public’s interest,” greenlighting a plan that was expected to bring upwards of 400 jobs to the area.

“Construction is expected to begin this summer and be completed by the end of 2024,” reported the Wisconsin Rapid Tribune in April 2023.

But construction never began. And this March, the project’s developer, Savion—a subsidiary of oil giant Shell—asked regulators to give it an extension on its deadline to start building the solar farm. The company cited “delays in the interconnection study process,” setbacks in reaching an agreement to connect to the regional power grid and a three-year waiting period to receive critical pieces of equipment due to supply chain issues.

State commissioners granted the extension earlier this month, giving Savion until April 1, 2027, to start construction on its project that’s already a year behind schedule.

The situation isn’t uncommon. Across the nation, more than 11,000 solar, wind and battery storage projects, together capable of powering tens of millions of homes, were still waiting to connect to a power grid at the beginning of 2024, according to the Lawrence Berkeley National Laboratory’s annual report, released in April. Clean energy developers have long complained that they’re often waiting years to get their projects online, even after construction is complete.

Midwest states, including Minnesota, Illinois and Michigan, have recently passed laws aimed at shortening that wait time. Last year, Michigan passed legislation that gave the state, rather than counties and municipalities, citing authority for large renewable energy projects to reduce the number of jurisdictions in which developers would need to get approval. And last month, Minnesota Gov. Tim Walz signed a sweeping package of reforms into law that are expected to shave as much as nine months off the state’s permitting process.

Despite those efforts, many clean energy projects are still expected to experience lengthy wait times to connect to the Midwest’s regional grid, run by the Midcontinent Independent System Operator, or MISO. Energy experts say that addressing the myriad delays developers face in the MISO interconnection process—and in other regional grids—is key to ramping up the clean energy transition to meet state and federal climate goals.

“We are still hamstrung by the MISO queue and hamstrung by the MISO process,” said Peder Mewis, regional policy director for Clean Grid Alliance, a Midwest nonprofit that advocates for clean energy policies at state legislatures. “Until the queue and the congestion and all that other stuff at MISO gets fixed, we’re just sitting here waiting, unfortunately.”

‘Delays, Inconsistencies and Inaccuracies’

The nation’s regional power grids have seen a surge of interconnection requests in recent years, driven largely by the falling costs of renewables and public policy aimed at reducing greenhouse gas emissions to slow climate change.

The U.S. installed a record 31 gigawatts of new solar capacity last year, an increase of 55 percent from 2022, according to the Energy Information Administration. By the end of this year, the agency projects that solar, wind and battery storage will make up a whopping 94 percent of all the new power capacity added to the nation’s grids.

But that record growth has been marred by mounting complaints from developers, some of whom say they’ve been waiting five or more years to connect their new energy projects to the grid. That’s according to a Clean Grid Alliance survey released in April, which interviewed 14 developers operating in MISO’s jurisdiction.

“Developers in MISO cite a range of challenges,” wrote Clean Grid Alliance Executive Director Beth Soholt in an online post about the survey results, “especially delays, inconsistencies and inaccuracies in the interconnection studies during the multiple phases of the queue process. They also note challenges with transmission owners making last-minute changes, not providing timely answers on interconnection questions, or not being able to procure equipment.”

The most frequently cited challenge in the survey was the high cost of power grid upgrades. Every time developers request to connect a new energy project to the grid, MISO must ensure there’s enough space on the current transmission line system to handle the extra electricity or risk complications, including power outages and damaged equipment. 

But the cost of expanding the transmission line system—which can involve adding capacity to current lines or building new ones—falls almost entirely on the developers, Mewis said, and they’re being asked to pay hundreds of millions of dollars for the upgrades.

Of the 14 developers surveyed, 13 said the high cost of transmission line upgrades affected their projects in some way, with 10 saying they canceled at least a quarter of their projects as a result.

“In other words,” Soholt wrote in her post, “a grid unprepared to connect clean energy is putting untenable transmission price tags on projects expected to bear the cost of big upgrades on their own.”

A Decade of Lost Opportunity

While speeding up state permitting and bolstering domestic supply chains helps to address some of the problems, energy experts say, the bulk of the challenges developers face in MISO and other regional grids is due to congestion on the grid and a lack of high-voltage transmission lines.

“Mostly it’s new transmission line additions,” said Rhonda Peters, an electrical engineer and energy consultant. “Making the highway bigger, right? More lanes and more highways.”

Peters partly blames regional transmission owners like MISO for that problem.

In July 2022, MISO’s Board of Directors unanimously approved $10.3 billion in new transmission projects. And earlier this year, the board proposed another $23 billion in expansion projects. 

But the last time MISO approved a large portfolio of transmission projects like that was in 2011, more than a decade earlier, Peters said. “That’s really where the problem was … we weren’t building that backbone transmission,” she said. “It shouldn’t be 10 years. It should have been happening all along, and that’s why we’re seeing a lot of the problems that we’re finding out now.”

In a statement to Inside Climate News, MISO spokesperson Brandon Morris said the organization’s approach to bringing new resources online “continues to be one of the most efficient in the electricity industry.” 

“We have implemented reforms over the past few years to ensure our interconnection process is not an impediment to having the necessary generator resources available when needed,” he said. “There are currently more than 50 gigawatts of new generation facilities that have been approved by MISO, but many are not going into service on schedule due to supply chain issues and permitting delays that are beyond MISO’s control.”

Still, some developers continue to face delays even after receiving approval from states and other local governments. Mewis said that’s largely due to congestion on MISO’s grid. “There’s like six or seven projects, wind and solar projects in Minnesota that have permits in hand from the commission,” he said. “But they don’t have a generator interconnection agreement with MISO because the grid is so congested.”

The situation has reignited debate among energy developers and regulators over who exactly should be responsible for paying for these transmission lines. Under the current rules, developers are required to pay for 90 percent of the grid upgrades required to hook up renewables to the MISO system, with the remaining 10 percent paid by utilities.

Gabe Tabak, senior counsel for American Clean Power Association, a clean energy trade group, commended MISO for its recent approval of transmission lines, calling the 2022 decision “the most robust intra-regional transmission planning” in the country. Still, he added, developers believe they’re being asked to pay for too much.

Developers in MISO would be saddled with at least $1.5 billion worth of grid upgrades, Tabak said, if the pending set of upgrades gets finalized. “Generators are being asked to pay for a lot of high voltage upgrades that provide broader benefits [to the public],” he said. “There’s not even an investigation of who else might be benefiting from them. It is purely generator pays.”

Progress Inches Forward 

In May, the Federal Energy Regulatory Commission (FERC) announced a long-awaited rule, which requires MISO and the other regional grid operators to create a 20-year plan for building out their transmission line systems in order to support growing electricity demand. The operators now have a year to develop their plans. A second rule, released the same day, also allows FERC to assume citing authority in certain cases when a state rejects a transmission project.

“A new historic advancement in our transmission policies has been desperately needed,” Senate Majority Leader Chuck Schumer said in a press conference following the announcement. “The rules released by FERC today will go a long way, a very long way, to solving that problem.”

Last year, the Department of Energy also awarded $3.5 billion to states to assist in grid upgrades and improvements, including more than $500 million going to Minnesota. Those grants will fund transmission upgrades between regional grids—specifically, between MISO and its southwestern neighbor, the Southwest Power Pool.

Tabak said that funding should help pay for about a quarter of the $1.5 billion price tag that developers could be expected to foot for grid upgrades. But questions remain if such funding will be available in the future once the grants run out, he said, since Congress would need to approve it.

Peters said MISO can still make improvements that would help clear congestion now, such as prioritizing the connection of more battery storage to the grid. Unlike the gas-fired “peaker” power plants that they’d replace, she said, batteries can both supply and absorb electricity in a pinch, temporarily providing more grid capacity by giving the electricity somewhere to go. “There needs to be a focus on battery storage because that solves the near-term issues,” Peters said.

Ultimately, Mewis said, the responsibility falls on all parties—not just MISO—to ensure the nation’s power grids are prepared for the future. “State and local officials, as well as residents and businesses, are key to expressing the public demand for action necessary to avert delays and special interest opposition,” he said. “When it comes to getting our grid in shape, support is needed from literally every corner. It’s going to take everyone.”