Recent ISO New England and New York ISO studies complete a U.S.-wide picture on interconnection costs amid dramatic growth in interconnection queues
With the recent publication of interconnection cost analyses for ISO New England (ISO-NE) and the New York Independent System Operator (NYISO), Berkeley Lab is pleased to announce that our series of briefs analyzing interconnection costs and trends across five U.S. wholesale electricity markets is complete. The series employs extensive data collection and analysis at the individual project level in MISO, PJM, SPP, NYISO, and ISO-NE to provide developers, regulators, policy makers, and other stakeholders with critical insights about interconnection cost data that is often difficult and inefficient for the public to obtain.
Please join us for a summary presentation of our analysis at our upcoming free webinar, held on June 29 at 10:00 am Pacific / 1:00 pm Eastern. Register for the webinar here: https://lbnl.zoom.us/webinar/register/WN_f3uMo3DITpudT9d_10h0Og
ISO New England
Our interconnection cost study for ISO New England, published in June 2023, finds that in keeping with trends in other markets, interconnection costs have increased, especially among projects that withdraw from the queue. Overall, costs have nearly doubled for projects studied since 2018, relative to costs for projects studied from 2010 through 2017. But project-specific interconnection costs can differ widely depending on many variables and do not follow a normal distribution.
While ISO-New England’s interconnection queue has not experienced the same level of dramatic growth as has occurred in most of the U.S., it has still tripled since 2014. The type of resources seeking interconnection in ISO-NE has changed significantly as the queue has grown over the past decade. At year-end 2022, ISO-NE had 35 gigawatts (GW) of generation and storage actively seeking grid interconnection, nearly all of which is zero-carbon.
This brief analyzes generator and storage interconnection cost data from 194 projects in ISO-NE that were evaluated in interconnection studies between 2010 and 2021. This dataset incorporates all available studies on ISO-NE’s website as of May 2022 and represents at least 55% of all new unique generation and storage resources requesting interconnection in ISO-NE from 2010-2019, as well as 13 projects that applied before 2010 and 35 that have applied since 2020. While this dataset is sufficiently robust for analysis, much data is difficult for stakeholders and the public to obtain. The ISO-NE study, the NYISO study discussed below, and all underlying project-level interconnection cost data for all studies can be found at emp.lbl.gov/interconnection_costs.
All briefs in the series analyze interconnection cost data for three types of projects: those that have completed all required studies, including plants now in service (“complete”); those actively working through the study process (“active”); and those that have withdrawn from the queue (“withdrawn”).
For projects studied in ISO-NE, costs have nearly doubled since 2018 relative to 2010 through 2017 (mean: $225/kW to $422/kW, median: $124/kW to $224/kW), with the biggest increase occurring among projects that have withdrawn (mean: $270/kW to $613/kW, median: $198/kW to $455/kW) their interconnection request (Figure 1). Costs for projects that ultimately achieved commercial operation were much lower (means: 2010-2017: $134/kW, 2018-2021: $114/kW) and lack a clear trend due to a small number of projects for the latter period. Projects still working through the interconnection process cost $233/kW, on average (median: $126/kW).
Figure 1. ISO-NE Interconnection Costs over Time by Request Status (bars show simple means, gray lines represent standard error). Data rows below the figure convey how the sample of recent projects differs from the sample of past projects.
Interconnection costs in ISO-NE are highest for onshore wind ($909/kW), followed by solar ($450/kW) and storage ($230/kW). Nearly all (81%) of onshore wind projects studied since 2018 have withdrawn their application, suggesting that high interconnection costs are a driver of those withdrawal decisions. Natural gas ($91/kW) and offshore wind ($86/kW) have lower average costs, though the offshore cabling costs are excluded from the scope of the interconnection cost analyses.
New York ISO
In NYISO, the cumulative capacity of projects actively seeking interconnection more than doubled from 2019 through 2022 to equal more than three times the peak load. In 2022 alone, nearly 36 GW of new generation and storage capacity entered the NYISO interconnection queue – a 61% increase over the 22 GW that entered the queue in 2021.
Our brief analyzing interconnection costs in NYISO, published in March 2023, finds that despite a wide variation in project-specific interconnection costs, these costs have doubled for projects studied since 2017 (mean: $86/kW to $167/kW, median: $66/kW to $115/kW), relative to costs for projects studied from 2006 to 2016 (Figure 2). This increase in costs is especially pronounced for recent projects that are complete or withdrawn, whose costs have approximately tripled relative to historical projects. Projects still actively moving through the queue also have higher costs than historical projects. Costs have increased both at the point of interconnection (POI) and for broader network upgrades, with POI costs comprising a greater portion of the total for projects that ultimately withdraw from the interconnection process.
Figure 2. NYISO Interconnection Costs over Time by Request Status and Cost Category (bars show simple means, gray lines represent standard error)
The NYISO brief also analyzes costs by resource type and by study type. While solar project interconnection costs are generally 8-18% higher in NYISO than costs for other resources, there is not a consistent cost hierarchy among natural gas, onshore wind, offshore wind, and storage projects. Cost estimates tend to increase as more interconnection studies are completed. For example, costs for the same project increase by $30/kW on average from their system impact study to their facilities study, with costs at least doubling for more than a quarter of projects.
The brief’s cost dataset comprises at least 43% of all new unique generation and storage resources requesting interconnection in NYISO from 2003 to 2019, as well as three projects that entered the queue in 2020 and 2021.
These studies were funded, in part, under the U.S. Department of Energy’s Interconnection Innovation e-Xchange (i2X), and build on the Berkeley Lab’s previous work tracking interconnection requests and timelines. All studies in this series, including the ISO-NE and NYISO studies, as well as all underlying project-level interconnection cost data can be found here. For questions, please contact Joachim Seel (JSeel@lbl.gov) and Julie Kemp (firstname.lastname@example.org) at Lawrence Berkeley National Laboratory.
We appreciate the funding support of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy in making this work possible, specifically the Solar Energy Technologies Office, Wind Energy Technologies Office, and Office of Strategic Analysis.