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July 21, 2023

From the CEO's Desk Newsletter

Photo of EBCE CEO Nick Chaset

Generators and Buildings Face Big Delays in Connecting to the Grid

The rapid transition to a low carbon economy is running into a mundane road block -- the ability to connect new homes and new power plants to the grid.

Photo by Ben Paulos

The rapid transition to a low carbon economy is running into a mundane road block -- the ability to connect new homes and new power plants to the grid.

Months-long delays in energizing grid connections are hampering the completion of new homes and buildings, impeding efforts to lower California’s high cost of housing.

On the supply side, rapid growth of renewable power has created a huge backlog in connecting new solar, wind, and battery projects to the grid.

“Delays to the energization and interconnection of energy projects is a massive threat to EBCE and our communities,” says Alec Ward, EBCE’s Principal Legislative Manager. “We’re trying to lead the state in the transition to clean energy, and our customers are excited, but we can’t do that if we’re blocked from joining the electrical grid.”

A letter to the legislature from EBCE and over 35 local governments, advocacy groups, and community choice aggregators (CCAs) requests urgent action to solve the delays.

“Interconnection delays, ranging from months to years, harm residents, businesses, local job creation and economic development efforts, and state and local economies,” the letter says.

“Hundreds of local projects spanning rural to urban have been delayed or canceled, including service extensions to new affordable housing units and critical service sites ranging from hospitals to police/fire stations.”

Altogether, the signatories have counted delays for hundreds of new buildings and almost 855 megawatts of new renewable generation and storage projects for CCAs across the state.

For EBCE and its customers, grid hookups on hold include a car dealer in Dublin, a mental health clinic in Berkeley, and three utility-scale wind, solar, and storage projects.

Delays on the Demand Side

To resolve delays to the connection of new housing, three bills have been introduced in the legislature. SB 83, AB 50, and SB 410 would require the utilities to meet energization standards, such as by connecting electric service within 90 days for a new connection, and 30 days for upgrades to an existing connection.

“Californians can’t afford to wait months or years to have new projects connected to the grid - especially during a housing crisis,” said Senator Scott Wiener (D-San Francisco). “We need new homes yesterday, and these delays are increasing the cost of construction and preventing Californians from accessing urgently needed housing.”

Wiener’s analysis found 134 construction-ready projects, representing hundreds of units of housing and other critical priorities, that had been awaiting final energization for longer than 8 weeks. Of these, 95 had been waiting more than 12 weeks, while some affordable housing projects had been kept waiting for more than 18 months.

The San Francisco Public Utilities Commission has tallied over 140 projects over the past five years that it claims have been delayed by PG&E. Some are small, like new traffic signals, but others are as big as the Transbay Transit Center. The delays have cost ratepayers, taxpayers and the city about $30 million in the form of lost revenue in the past four years, according to the Commission.

The dispute in San Francisco is playing out against a backdrop of the City’s efforts to take over PG&E’s electric distribution system “to complete the City’s transition to full public power.”

In a report, the Commission said owning the grid would give the City “control over the investments to achieve reliability, climate goals, and equity in electric service and workforce development, while providing transparency and public accountability in rates, service, and safety.”

Delays on the Supply Side

New power plants are also seeing long delays in hooking up to the California grid.

Falling prices have led to an explosion in new projects across the country. Research compiled by Berkeley Lab identified over 2,000 gigawatts (GW) of proposed generation and storage projects -- including over 900 GW of solar -- that have applied for connection to the national grid. While most of these plants won’t get built, they far exceed currently operating plants, which total 1,200 GW.

The national number would have been even higher if the California grid operator, CAISO, hadn’t stopped taking new applications in 2022, citing an “overload (PDF)” of projects in their queue. While CAISO typically gets 65 to 150 proposals a year, they got 373 in 2021.

This pushed the pending queue to 95 GW of renewable generation and 141 GW of energy storage, exceeding requirements “by an order of magnitude,” CAISO said. Indeed, California’s peak demand is closer to 52 GW.

CAISO CEO Elliot Mainzer said they are working to “address the need for transformational reform (PDF),” with final recommendations due later this year.

The biggest areas of development are in Southern California, especially solar and batteries, as shown in the figure.

Post-CAISO Delays

But even after a project gets the go-ahead from CAISO, it has been taking an additional 70 months to reach commercial operation, according to Berkeley Lab, far longer than any other region.

Three projects serving EBCE have been delayed, totaling 173 megawatts of solar, wind, and battery capacity.

Aaron Halimi of Renewable Properties, a solar developer headquartered in San Francisco, cites a number of factors causing delays, including labor shortages, land use limitations, and a lengthy permitting process.

A big problem is the lack of available transmission lines.

On May 18, CAISO approved their 2022-2023 transmission plan (PDF) for the coming decade, identifying 45 projects with a total estimated cost of $7.3 billion. The projects would support more than 40 gigawatts of new clean resources needed to meet the state’s clean-energy goals.

But getting to a zero-emission power system will require even more transmission. CAISO anticipates next year’s plan will identify the need to add 70 GW of new resources by 2033, with 120 GW needed to reach a carbon-free power system by 2045.

And more may be needed on the distribution side of the grid. The consulting firm Kevala estimates $50 billion may be needed (PDF) to accommodate the electrification of homes and vehicles, “if measures are not taken to reduce costs and manage load.”

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