California is making undeniable strides toward its clean energy objectives, yet the journey to bring clean energy projects online is increasingly complex and time-consuming. It is crucial to expedite the integration of clean energy into the grid to further decarbonize the state.
A significant hurdle in clean energy development is the lengthy wait times for projects to connect to the grid. This interconnection process, managed by California’s grid operator, CAISO, involves approval procedures to ensure projects can safely connect and determine if grid updates are necessary for new projects.
The interconnection process is vital for launching new clean energy resources. However, it has been slowed by an overwhelming number of applications, creating a barrier to new clean energy connections. This article examines CAISO’s reforms to the interconnection process and their effectiveness in reducing these delays.
How did the interconnection process work prior to reforms?
Before reforms, CAISO conducted interconnection studies for all submitted projects. These studies are complex, as they depend on the status of other projects already connected or intending to connect to the grid. If a project drops out, the studies that included it become less accurate. This interdependency complicates the studies as more projects are analyzed. Although processing times increased, the number of submissions was manageable.
In 2023, CAISO recognized the need for change. During Cluster 15, its annual application phase, CAISO received 347 GW of interconnection requests from 541 projects, a significant rise from 373 projects in Cluster 14 and 155 in Cluster 13. This surge added to the existing 185 GW in the queue. CAISO noted that only 165 GW of new resources would be required to achieve the state’s 2045 clean energy goals.
What reforms were implemented?
In response, CAISO initiated the Interconnection Process Enhancement (IPE) 3.0 in 2023, comprising three steps to improve the process. Initially, deadlines for Cluster 14 were extended, and studies for Cluster 15 were paused to allow for the reform of the interconnection process for future requests. The focus then shifted to implementing these new reforms.
The reforms aim to limit the number of projects studied and prioritize them based on grid needs, market interest, and viability. Specifically:
- CAISO now accepts projects up to 150 percent of the available capacity based on transmission constraints, reducing the number of studies to a manageable level.
- All projects seeking grid connection are scored and ranked to determine which surpass the 150 percent capacity threshold to proceed to the study phase.
The scoring system evaluates projects based on commercial interest, project viability, and system need, using metrics provided by load-serving entities and project engineers.
| Category | Weight | Indicators |
| Commercial Interest | 30% | LSE allocations Non-LSE allocations |
| Project Viability | 35% | Engineering design plan completeness Expansion projects |
| System Need | 35% | Ability to provide local resource adequacy for a needed area Long lead-time resources |
Projects with the highest scores at each interconnection point progress to the next stage, limited by the 150 percent capacity. However, due to transmission constraints, projects with the highest overall scores may not advance if their interconnection points are highly competitive.
The final phase of IPE 3.0 adjusts CAISO’s transmission plan deliverability (TPD), which allocates deliverability capacity for grid-connected projects. Securing this capacity is crucial for project viability and financing. The TPD process was updated to ensure viable projects receive deliverability capacity.
Has the new initiative been effective?
While it’s too early to fully assess the reforms’ impact, the initial goals of reducing project intake and improving queue management have been met. Cluster 15 now has a more manageable number of projects advancing through interconnection studies, with these projects further along in development. From the initial 541 projects totaling 347 GW, 145 projects totaling 68 GW were moved forward after the new process was implemented.
Cluster 15 serves as a preliminary case study for these reforms, though some issues remain:
- The variation in project scores entering the validation stage is notable. Some low scores advanced in less competitive areas, while high scores did not in more competitive regions.
- Recommendation: More detailed geographic data on transmission constraints could guide project siting, ensuring viable projects progress across the grid.
- A significant number of projects were withdrawn after passing the 150 percent threshold, dropping from 177 to 145 projects, with a nearly 30 percent reduction in capacity. This raises concerns about CAISO advancing enough projects.
- Recommendation: CAISO should consider an additional assessment window post-withdrawals to allow the next highest-scoring projects to advance.
- The scoring system lacks an equity component, potentially disadvantaging projects serving disadvantaged communities. A recent petition to the Federal Energy Regulatory Commission highlighted that Tribes struggle with the financial requirements of the interconnection process, potentially excluding less financially viable projects that meet critical community needs.
- Recommendation: Future IPEs should create pathways to ensure equitable access to clean energy for all communities.
The IPE process is iterative, and initial reforms have highlighted issues needing further discussion. The latest iteration, IPE 5.0, launched to address ongoing challenges such as stagnant projects in the queue. Continuous engagement is vital to ensure that processes evolve to meet the state’s clean energy demands.
Nationwide, grid operators face challenges in timely interconnection studies and grid connections for clean energy projects. With the current federal administration opposed to clean energy, California’s commitment to a clean grid remains essential, and CAISO’s interconnection reforms are pivotal in accelerating this transition.
