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5 considerations for developers trying to connect to an energy grid in high demand
By: Jason Utton, Vice President of Energy – Power
The state of the renewable industry from an economic perspective with the Inflation Reduction Act (IRA) has never been better. But, the explosion in renewable energy projects is overwhelming the system for connecting new projects to the grid.
Plugging a wind or solar project into the grid (a.k.a. interconnection) is one of the most difficult parts of the renewable energy development process. Unlike many things in the development cycle, interconnection is largely not directly dependent upon a developer’s actions. There are countless variables that are out of the developer’s control, but must be considered in the development process. Adding to an already stressed set of circumstances is the complicated nature of the grid in today’s clean energy race.
What might seem like a risky project can be transformed into a well-executed and wise investment by adding a few considerations, and the right Power firm, in the beginning. Here are five components to consider when connecting to the grid:
- Complete a site assessment on the front end
Transmission analysis and preliminary injection analysis must be done on the front end so that there is a baseline understanding of any potential site from a transmission perspective. Before you even begin thinking about connecting to the grid, you should be considering the transmission options. Figure out the best places to inject the power (the best place is the most cost-effective) because strong financials are ultimately needed to complete a project. If it’s not economically viable, it will never be built. It’s also important to understand that electric customers don’t pay extra for extra capacity for a future developer to use.
- Determine the right size needed
Some people think of the grid as a bunch of open spaces, like connection points on a long extension cord, but that’s not accurate. The U.S. grid is not like a lot of surge suppressors with empty slots across the country that developers can simply plug their project into. The grid is made up of many cords that are already in use with very few open spaces to connect to for free. The current cords must be cut, then a substation, or a 3-breaker ring bus, is needed to allow the power to flow onto the grid. And there are network upgrades that are needed throughout the entire system (sometimes many miles away from the project) that need to be improved to allow for the added energy. This is why it’s imperative to understand what voltage is available and if there is any available capacity being unutilized. Trying to interconnect a 100 MW project into a system that only has 50 MW of capacity will add costs to the project.
- Use the right technology
Now that the IRA has made wind energy more cost competitive, a developer must consider different technology options and choose the best fit for their site. This can be for economic reasons but also for commercial reasons. Wind predominantly generates electricity at night, whereas solar generates during the day. A developer must place technology appropriately. In addition to picking the best technology for a particular site, storage is now a viable option in the majority of sites across the country because of the multiple uses case storage provides. If storage is added, where will it be placed? Battery storage opens the door to countless other opportunities, and Atwell can assist clients in determining what technology will be best suited for their site.
- Keep your eye on the long-term landscape
Regardless of site, it is going to take at least two years to develop a project, and some projects will never get to the end of the road. Don‘t fall into the mistake of looking at a project today but failing to consider what may happen tomorrow – Look at the interconnection queues across the country! You must take into account the energy projects that are currently in line, waiting to be studied and connected to the grid. Then, you must be prepared if they connect first and understand how that will impact your project. Understanding what it takes to pick the right site and the competitive landscape is critical to success.
- Assume you’re not the only one interested
You must be very attuned to the competition, especially following the passage of the IRA. If you find a strong wind resource, or a good solar site, odds are you’re not the first one to find that area, and you may not be the only one there now. Situational awareness leads to situational dominance – you must know what the competition is doing. How far along is their project? What is the likelihood that their project is built? And, if you think their project is going to get built, how will that impact your project?
If this sounds like a lot to consider, we get it. There are a lot of factors at play before your project even enters the arena, and while the IRA makes renewables more cost competitive, it adds to the complications in the development space. Fortunately, we have the resources to conduct the studies, determine the right project size and technology needed for your project, and help you create a game plan to understand where the grid could be in the years to come.
We help clients run studies, do analyses, evaluate options, and make the best decisions. Depending on who our clients think their final customer is, we can assess different parts of the country and determine whether it’s wind, solar, or battery storage that’s needed. We also have the expertise to help our clients navigate the regulations set forth by the various Independent System Operators (ISOs). Rest assured, when you partner with Atwell, you’re partnering with industry experts who can and want to help you succeed.
It’s a stressful time for connecting to the grid, but it’s an exciting time, and the Atwell team can take the stress off your shoulders so you can keep your eyes on the landscape ahead.