On January 19, 2023, the Lawrence Berkeley National Laboratory (LBNL) released a report analyzing interconnection costs in the PJM Interconnection[1] territory.[2] The report found that interconnection costs have substantially increased in parallel with the tremendous growth of PJM’s interconnection queue in recent years. At the end of 2021, PJM had 259 GW of generation and storage capacity actively seeking grid interconnection, nearly twice as large as PJM’s peak load in recent years (~155 GW). Capacity in the queue includes solar (116 GW), standalone battery storage (42 GW), solar-battery hybrids (32 GW), and wind (39 GW). 2021’s active queue increased by 240% compared to year-end 2019. PJM reformed its interconnection process in 2022 due to the substantial growth of interconnection requests, along with lengthy study timelines and high project withdrawal rates. The ISO adopted a “first-ready, first-served” cluster study approach.
LBNL found that PJM interconnection costs have grown across the board. For example, mean costs for active projects[3] have grown from $29/kW to $240/kW (2017-2019 vs. 2020-2022. The main driver behind these increases has been broader network upgrade costs, which have risen sharply since 2019. Notably, average interconnection costs have been significantly lower for natural gas ($24/kW) than for storage ($335/kW), solar ($253/kW), or wind ($136/kW for onshore, $385/kW for offshore). The PJM brief is the second in a series analyzing interconnection costs in wholesale electricity markets. LBNL released an October 2022 study about the Midcontinent Independent System Operator (MISO) containing similar findings. LBNL will publish analyses of New York ISO (NYISO), ISO New England (ISO-NE), and Southern Power Pool (SPP) in the coming months.
[1] PJM serves all or parts of serving all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia.
[2] https://emp.lbl.gov/news/pjm-data-show-substantial-increases
[3] Active projects refers to projects working through the interconnection process.