Where Did All the Solar Go?

America’s largest electricity market is looking at hooking up new power generation again, and a lot of it is natural gas.

PJM stopped evaluating new generation in 2022, when the backlog of projects awaiting interconnection studies stood at 2,664, of which 1,972 — representing 107 gigawatts, about two-thirds of the total — were renewables.

“They’ve been spending these past four years working through the backlog, studying everything that’s in there, and that process is up,” Jon Gordon, senior director at Advanced Energy United, told me.

The electricity market announced last August that applications for the first cycle of interconnection studies under a new, reformed process would be due this week. Some 811 projects with a combined capacity of 220 gigawatts made the Monday deadline, PJM said Wednesday. This time around, the mix looks a little different.

While solar, storage, and solar-and-storage projects make up more than half the queue by number (536 in total), by capacity, nearly half is natural gas, with 106 gigawatts out of around 220 gigawatts total.

For years, some of the strongest advocates of interconnection queue reform at PJM have been advocates for renewables. With the wait for interconnection stretching up to eight years, solar and wind projects in particular found themselves in trouble. Even as the cost of solar had been dropping dramatically, higher inflation and higher interest rates following the COVID pandemic and Russian invasion of Ukraine made developing renewables more expensive — and that was before Donald Trump regained the White House and declared war on clean energy.

Since 2020, PJM said in a March blog post, 103 gigawatts of interconnection agreements resulted in just 23 gigawatts of new generation being added to the grid. Three-quarters of projects that PJM studied withdrew from the process at some point before sending power to the grid.

PJM spent the past four years reviewing old projects and developing a process designed to get interconnection service agreements done in two years at most. The round of projects submitted up through this week will not be evaluated on the “first-come, first-served” model that had bedeviled the previous system. Instead, PJM has adopted a “first-ready, first-served approach,” which the organization says will mean “prioritizing projects that are more advanced and better positioned to move forward.”

The reformed queue couldn’t come soon enough. Over the past four years, PJM has become desperate for more power to serve exploding data center demand and help alleviate high prices.

Since 2020, electricity prices in PJM have risen almost 50%, from 12.6 cents per kilowatt-hour to 18.7 cents per kilowatt-hour, according to data from Heatmap and MIT’s Electricity Price Hub. Typical electricity bills have risen from around $128 a month to about $161.

“Current projections show a potential capacity shortfall of 50 GW to 60 GW in the next decade, primarily driven by large load growth,” PJM said last month. For reference, a gigawatt is enough to power a city of around 800,000 homes. PJM’s existing installed capacity is around 180 gigawatts.

When I asked Gordon about the large presence of natural gas in the new queue, he pointed to data centers, which “have become a massive sea change to the whole landscape of energy.” That goes especially for the scale of planned facilities, such as a planned 1.4-gigawatt data center campus on a 700-acre footprint in Cumberland County, Pennsylvania.

“Now they're talking gigawatt-size data centers that would require, potentially, an enormous natural gas plant — maybe more than one,” Gordon said. Getting the requisite financing and permitting for renewable and storage resources to power such a large-scale project would be “enormously challenging,” he added. Meanwhile, “natural gas has risen to the fore here, and it’s getting a lot of tailwind from the Trump administration.”

(Something else eagle-eyed readers may have spotted in the numbers on new planned projects: their average size is much bigger than those in the queue as of 2022. The new batch comes in at an average size of nearly 272 megawatts each, compared to around 60 megawatts for the old one. That holds especially for solar, storage, and solar-plus-storage projects, which clock in at nearly 198 megawatts on average, compared to just 54 in 2022.)

Earlier this year, governors of states in the PJM region, led by Pennsylvania’s Josh Shapiro, and the White House agreed on a $15 billion special auction for procuring new generation in PJM. That came after PJM’s most recent capacity auction — in which generators bid to be compensated for their ability to stay on the grid in times of need — failed to meet even PJM’s preferred reliability margin.

Pressure continued to mount on the electricity market following the capacity auction, as federal regulators took it to task for its failure to get more generation online. Two weeks ago, PJM put some meat on the bones of the White House agreement by proposing a two-stage process, whereby power customers would directly contract for new generation with power supplies starting in September and PJM would facilitate an auction for whatever was still necessary to meet its capacity increase goals by March of next year.

The plan met a cool reception in Washington, where Federal Energy Regulatory Commission Chair Laura Swett said she was “a bit perplexed” by the PJM proposal, adding it didn’t meet the timeline set out by the White House and the PJM governors to hold an auction this year

While PJM may be able to reform its own processes or come up with special procurements, there’s still the same old issues that have bedeviled energy buildouts everywhere.

Projects that have already been approved are facing “hurdles such as state permitting and supply chain backlogs,” PJM said Wednesday.

That being said, renewables and storage can still benefit from an improved interconnection process, Gordon told me. “Renewables would have always benefited, and still will benefit from improved interconnection,” Gordon told me. That’s largely because renewable projects tend to be smaller on a per-project basis than gas, let alone nuclear, and are more plentiful in number, and therefore stand to benefit disproportionately from faster reviews.

The real tragedy, Gordon said, is that more renewables couldn’t come online when the political and economic winds were blowing in their favor. Projects that were submitted to the queue before its closure in 2022 were “probably very economic back then,” he told me. “They died on the vine as they waited in the queue.”