Generator Interconnection Costs to the Transmission System

Electric transmission system operators (ISOs, RTOs, or utilities) require new large generators and storage assets seeking to connect to the grid to undergo a series of impact studies before they can be built. This process establishes what new transmission equipment or upgrades may be needed before a project can connect to the system and assigns the costs of that equipment. To learn more about the composition of the interconnection queues and their dramatic growth in recent years, visit our “Queued Up” project which publishes annual summaries for the seven ISOs/RTOs and 35 additional non-ISO utilities.

Berkeley Lab has collected and analyzed interconnection cost data for projects in MISO, PJM, SPP, ISO-NE, and NYISO. You can find the resulting analytical papers and the underlying project-level data in the publications list below.

We find for most regions:

• Interconnection cost estimates remain difficult to collect.
• Interconnection costs have grown substantially over time.
• Projects that have completed all required interconnection studies have the lowest cost compared to applicants still actively working through the interconnection process or those that have withdrawn.
• Upgrade requirements of the broader transmission system are the primary cost driver.
• Many projects facing high interconnection costs withdraw from the queue.
• Renewables and storage projects have higher interconnection costs than natural gas power plants.
• Larger generators have greater interconnection costs in absolute terms, but economies of scale can exist on a per kW basis.
• Interconnection costs vary by location

The studies are funded, in part, under the U.S. Department of Energy’s Interconnection Innovation e-Xchange (i2X). A recording of a webinar discussing this research is available under the Webinars tab below.