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Independent regulatory commissions

Breaking Down Barriers: FERC's Order 2023 and the Future of Renewable Energy in the US

Strategic Insights

— 1 min read

A surge in demand for clean energy, declining costs, and supportive public policies are driving the growth of U.S. renewable power, but the byzantine process for plugging new electric generators into the power grid is slowing adoption. The Federal Energy Regulatory Commission (FERC) has taken a crucial step by adopting Order 2023, the first major overhaul of national interconnection standards in two decades. This reform aims to accelerate the transition to a green energy revolution by streamlining the interconnection process, reducing unnecessary costs, and promoting the development of clean energy resources.

Key Takeaways:

  • The current interconnection process takes an average of five years for a generator to move through and may lead to projects withering on the vine.
  • There are over 2,000 gigawatts of planned generation in interconnection queues, with more than 90 percent being renewable.
  • The backlog of interconnection requests has grown from 1,000 in 2010 to a record 10,000 by the end of 2022.
  • Order 2023 requires utilities to use a first-ready, first-served, cluster study approach for reviewing interconnection requests and imposing financial penalties on grid operators and utilities that miss deadlines.
  • RTOs and grid operators have petitioned the courts to overturn or clarify aspects of the order, citing concerns over grid reliability.
  • NRDC stands with FERC to defend Order 2023 and has filed a motion to intervene in the case to ensure the rule is not shelved or rendered ineffective.
  • Renewable energy has shown its ability to bolster grid reliability and lower costs for consumers, as seen in the response to Winter Storm Elliott in December 2022.

Statistics:

  • 2,000 gigawatts of planned generation are waiting in interconnection queues.
  • 90 percent or more of the planned generation in interconnection queues are renewable.
  • Average interconnection process takes over 5 years.
  • Number of interconnection requests grew from 1,000 in 2010 to 10,000 by the end of 2022.
  • Financial penalties imposed on grid operators and utilities that miss deadlines under Order 2023.

Sources:

  • Global Data Point. (2022). FERC's Order 2023 and the Future of Renewable Energy in the US.
  • Federal Energy Regulatory Commission (FERC). (July, 2023). Order 2023.

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