The process of integrating battery storage systems into PJM Interconnection, one of the world’s largest electricity markets, faces significant barriers. According to a recent report from the American Council on Renewable Energy, the current interconnection process requires substantial reforms to fully harness the potential of battery storage. Battery storage plays a critical role in addressing the anticipated capacity shortfalls within PJM’s network. With the potential for rapid development, battery storage offers an immediate solution that requires reformed interconnection rules to become viable. The current Surplus Interconnection Service (SIS) process, originally intended to expedite capacity additions, has proven impractical for battery storage projects.
As one of the largest operators of competitive wholesale electricity markets, PJM Interconnection oversees the transmission of electricity in a territory that spans 13 states and the District of Columbia. Despite its importance, the organization has faced criticism for its outdated processes that do not adequately accommodate new technologies such as battery storage. The SIS process, in particular, designed to facilitate quick capacity additions without requiring new transmission system upgrades, is described in the report as overly restrictive and not adapted to modern needs. Such hindrances have prevented the effective use of battery storage, a technology that can significantly aid in meeting near-term capacity demands.
Challenges with the SIS Process
One of the central criticisms of the existing SIS process is its impracticality for battery storage resources. The SIS process allows expedited review for projects that add capacity without necessitating new transmission system upgrades. However, this process has rarely been utilized due to its restrictive and outdated nature regarding new technologies like battery storage. Michael Borgatti, co-author of the report and a consultant with Gabel Associates, argues that the current SIS rules represent a missed opportunity for PJM. Under the current system, projects avoiding transmission upgrades can be reviewed in approximately 270 days. Given the urgency of PJM’s capacity needs, streamlining the SIS process could unlock considerable capacity and offer a timely solution.
Battery storage can be developed much more rapidly than traditional generation projects, usually within a span of about two years. This quick development timeline makes battery storage a crucial technology for addressing immediate and impending capacity shortfalls. Nonetheless, the stringent regulations surrounding the SIS process have led to significant delays and obstacles for developers. Instead of facilitating a streamlined integration of battery storage, the current SIS process often results in prolonged timelines that exacerbate the very capacity shortfalls it intends to alleviate. The report concludes that revising these rules could tap into a vast reservoir of potential capacity, enhancing the overall resilience and reliability of the PJM network.
Untapped Capacity and Inefficiencies
The report underscores PJM’s forecasted resource mix and highlights significant underutilization of potential capacity. For the 2026/27 delivery year, PJM expects around 9.7 GW of solar resources with low effective load-carrying capability (ELCC) values. Despite the substantial total capacity, only 1.9 GW is currently accredited, leaving a vast 7.8 GW unused. Additionally, PJM has about 25 GW of combustion turbines, mainly serving as peaking resources, exhibiting ELCC values of 62% or 79% based on fuel type. This results in another large segment of untapped interconnection capacity. The report suggests that aligning PJM’s SIS rules with Federal Energy Regulatory Commission (FERC) Order 845—which encourages maximizing existing capacity without triggering new upgrades—could substantially increase the integration of new battery storage projects.
By failing to effectively utilize available capacity, PJM stands to miss out on a considerable amount of additional generation potential that could be crucial for future energy needs. The existing forecasting models and ELCC assessments reveal inefficiencies that, if addressed, could significantly enhance grid performance and reliability. Furthermore, aligning with FERC’s Order 845 could serve as a catalyst for such beneficial changes. The order encourages grid operators to maximize existing capacity while minimizing the need for new network upgrades, essentially advocating for a more efficient and inclusive approach to interconnection. By adopting these principles, PJM could unlock tens of thousands of megawatts, meeting both immediate and long-term capacity requirements.
Proposed Reforms for SIS Process
To address these inefficiencies, the report recommends three primary reforms for the SIS process. Firstly, it calls for ending the effective prohibition against grid-charging battery storage resources participating in the SIS process. This would remove existing barriers and open the door for more projects to qualify for expedited review. Secondly, the report advocates for harmonizing modeling assumptions for battery storage and pumped hydro storage, ensuring a fair and consistent evaluation process. These standardized assumptions would help create a level playing field for various storage technologies. Lastly, the report proposes adopting FERC’s standard that permits SIS involvement if resources do not necessitate new network upgrades. Incorporating these measures would facilitate a more inclusive and efficient process, encouraging more battery storage projects and enhancing overall capacity.
Adopting these proposed reforms could pave the way for a more inclusive and efficient interconnection process, significantly boosting PJM’s capacity and reliability. By lifting the effective ban on grid-charging battery storage resources and harmonizing modeling assumptions, the playing field would be leveled, allowing various storage technologies to be evaluated on merit rather than outdated regulatory frameworks. This would not only enhance the capacity of the grid but would also make it more resilient and adaptable to evolving energy demands. Embracing FERC’s standards for SIS involvement further simplifies the process, potentially unlocking substantial new capacity without the need for extensive new network upgrades.
PJM’s Current Measures and Market Demand
Despite the criticism, PJM is undertaking steps to optimize its process for reassigning capacity interconnection rights from retiring plants to new resources. This transition highlights PJM’s efforts to better utilize existing infrastructure. David Mindham of EDP Renewables North America points out that while these steps are positive, the current SIS regulations hinder broader adoption of battery storage. Consumer demand increasingly favors load-following clean energy sources. EDP estimates that around 80% of its projects could incorporate battery storage to meet this demand. However, the current interconnection rules serve as a significant roadblock to these innovations.
Mindham’s insights shed light on the dichotomy within PJM’s approach: while efforts are being made to optimize current interconnection processes, existing SIS regulations remain a significant impediment. The consumer demand for load-following clean energy sources is growing, driven by a societal shift towards sustainable energy solutions. EDP’s estimation that 80% of its projects could integrate battery storage highlights the potential impact of regulatory reforms. Adapting the SIS process to accommodate battery storage more effectively could transform these ambitions into reality, substantially boosting PJM’s ability to meet current and future energy needs.
Industry Support for Change
Integrating battery storage systems into PJM Interconnection, one of the world’s largest electricity markets, encounters significant challenges. A recent report from the American Council on Renewable Energy calls for major reforms in the current interconnection process to unlock the full potential of battery storage. This energy solution is crucial for addressing expected capacity shortages within PJM’s grid. With its ability to develop quickly, battery storage requires updated interconnection rules to be truly effective. The existing Surplus Interconnection Service (SIS) process, meant to speed up capacity additions, has proven unsuitable for battery storage projects.
As a major operator of competitive wholesale electricity markets, PJM Interconnection manages electricity transmission across 13 states and the District of Columbia. Despite its vital role, PJM is criticized for outdated processes that fail to accommodate new technologies like battery storage. The SIS process, originally aimed at facilitating quick capacity additions without new transmission system upgrades, is highly restrictive and ill-suited for modern needs. These barriers have hindered the efficient use of battery storage, a technology that can greatly help meet immediate capacity demands.
