Energy storage sector has undergone remarkable advancements in the US, acting as a crucial catalyst for the smooth integration of renewable energy sources (RES), boosting grid stability, and enhancing energy management capabilities. States like California, New York, and Massachusetts have been at the forefront, setting ambitious targets and implementing supportive policies to accelerate energy storage adoption. The momentum has been further fuelled by the falling costs of battery technology and beneficial federal incentives like the investment tax credit (ITC).
The Clean Energy Group (CEG) has recently released a white paper titled, ‘The Interconnection Bottleneck: Why Most Energy Storage Projects Never Get Built’ which examines the challenges associated with effectively and efficiently connecting distributed energy storage resources. For this white paper, the Applied Economics Clinic (AEC), acting under contract to CEG, investigated the interconnection barriers using Massachusetts as a case study and gathered information through interviews with industry stakeholders, and state energy policy experts. While the focus is on Massachusetts, the findings have broader relevance at the national level.
In several US states, interconnection processes have not kept up with rising interest in and incentives for solar and storage resources in recent years. As a result, interconnection applications are increasing while interconnection authorisations lag behind. Additionally, a large number of energy storage projects are removed from the interconnection queue as a result of the process and the cost causation approach to allocating grid upgrade costs. Prolonged wait times and rising interconnection costs dramatically restrict the rate at which RES and energy storage resources are installed, creating hurdles to realising state energy policy goals such as greenhouse gas (GHG) emissions reduction targets, RES and energy storage procurement targets, and grid modernisation plans.
The paper includes recommendations for overcoming interconnection barriers. This includes proactive, integrated and system-wide interconnection planning; iterating interconnection solutions; reforming cost allocation and incorporating storage resources into interconnection rules and processes.
CEG’s white paper is available here.