Power and Renewables

Successfully Navigating the Interconnection Queue With Project Probability

byAmanda De La Rosa

Overwhelmed Interconnection Queue and High Project Attrition

In the rapidly evolving landscape of the power market, the interconnection queue stands at a critical juncture for new energy projects seeking to integrate with the grid. The recent surge in renewable energy projects has left the queue overwhelmed, with regulatory framework and infrastructure struggling to keep pace. The ability of the existing grid to accommodate new entrants without compromising reliability has proven a major challenge, driving up network upgrade costs while also increasing delays for projects waiting in the queue. The growing backlog and rising costs have left developers, traders, and the pace of the energy transition adversely impacted as the interconnection queue has turned into a bottleneck for the deployment of new energy sources.

Only a fraction of projects entering the interconnection queue reach final approval and construction. For PJM, more than 130,000 MW of proposed renewable energy projects have been withdrawn in the past 10 years; comparable cases can be observed for all other ISOs (Figure 1). There is a high attrition rate, with many projects ultimately withdrawing due to feasibility issues, budgetary constraints or regulatory hurdles. In addition to impeding the expansion of renewable energy, this bottleneck raises risk and uncertainty for investors and developers. At the end of 2023, more than 7,500 projects representing more than 1350 GW of generation and storage were seeking grid interconnection in the U.S. However, most of this proposed capacity ultimately will not be constructed. Historically, from 2007-2023, only an estimated 20% of projects requesting interconnection were able to reach commercial operation – 80% had withdrawn from the queue (Figure 2).

total-suspended-project-capacity-mw-across-each-iso-over-the-past-10-years
Figure 1. Total suspended project capacity (MW) across each ISO over the past 10 years
total-project-capacity-mw-by-project-status
Figure 2. Total project capacity (MW) by project status (operating and suspended) and interconnection request year across all seven ISOs (2007-2023)

Understanding the likelihood of a project’s completion is critical for asset developers and energy traders. Project feasibility, cost and timeline are all strongly impacted by queue position. Developers must navigate these uncertainties, balancing the potential returns and risks associated with the interconnection queue. Conversely, energy traders need to evaluate the impact of new projects on supply, prices and market dynamics. Ultimately, a project’s status in the interconnection queue is a valuable piece of intelligence as the integration of new generation capacity has the potential to shift energy markets significantly.

A New Way to Evaluate the Interconnect Queue: Project Probability

To counter the speculative nature of projects in the interconnection queue, Enverus PRISM®’s Project Tracking solution has added Project Completion Probability score, which provides insights into which power projects have a higher probability to be built. The project probability score is produced by a binary classification machine learning model that analyzes and predicts the probability of success of every renewable generation project in the interconnection queue across ISOs. The model is trained on all historically operating and withdrawn projects within a respective ISO, and dynamically assigns each project a likelihood using significant project factors such as status, capacity, owner and developer, etc. This score is continuously updated as the project progresses through the queue. Project Completion Probability scores can provide insight into identifying prime locations for project development. This map from PRISM displays all proposed projects in Virginia in the PJM Interconnection Queue (Figure 3). The light blue dots in the map below indicate a Project Completion Probability score over 50% likelihood of reaching commercial operations, while the red dots indicate all projects under a 50% likelihood, or less likely to reach commercial operations.

most-projects-in-pjms-interconnection-queue-in-virginia-have-a-high-likelihood-not-to-break-ground
Figure 3. Most projects in PJM’s interconnection queue in Virginia have a high likelihood not to break ground

For further insight into location siting, the row chart on the left provides a breakdown of Virginia counties and their average Project Completion Probability score (Figure 4). We can see that King William County in Virginia is the county with the highest average of projects likely to be completed at 33%. Within Virginia, we can also take a look at which developers in the state have the most success in bringing projects to completion. The row chart on the right provides a breakdown of the top fifteen developers in Virginia that have the most success in bringing projects to completion, with Open Road Renewables having the highest average project likelihood score, followed by NextEra Energy Resources (Figure 5). Armed with this data, developers can now more effectively evaluate the potential of competing planned projects coming online and plan their next project site accordingly.

counties-in-virginia-with-highest-average-project-score
Figure 4. Counties in Virginia with the highest average project probability score

For energy traders, project probability can also be used to compute the impact of proposed projects on congestion. In Panorama, after filtering out projects with a higher likelihood of completion (> 30%), in the area chart we can see the cumulative impact of these projects on the Etowanda to Hillside constraint over the next couple years. With this information, traders can make better assessments of where congestion may occur if a planned project does come online.

panorama-enverus-plants-table-and-system-map
Figure 6. Panorama Enverus Plants table and System Map

Conclusion

With the interconnection queue overwhelmed by the growing surge of renewable energy initiatives, it has made it increasingly difficult to identify viable projects. To successfully navigate the market, asset developers and traders must stay informed about each ISO’s power market dynamics and how generation mix can shift going forward. The Project Completion Probability score in the Project Tracking solution gives the ultimate advantage in navigating through queue uncertainties and complexities and help identify the projects most likely to reach commercial operation.

Interested in learning how Project Probability in the Project Tracking solution can help you identify which projects have a higher likelihood to be built? Reach out to our experts below and we will be glad to show you. 

Amanda De La Rosa

Amanda De La Rosa

Amanda De La Rosa is a Research Analyst on the Power and Renewables team at Enverus. She tracks power generation, transmission, and LMP data with a focus in the PJM market. Amanda holds a B.S. in Environmental Science & Policy from St. Edward’s University, and an M.Sc. in Biology from Ghent University.

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