Editor: Alexander Ochs

Part 1 of this blog examined how interconnection queues have become one of the most significant bottlenecks in the U.S. clean energy transition. Thousands of renewable energy projects are currently waiting years to connect to the grid, with many ultimately withdrawing after encountering long delays and costly transmission upgrades.

This second installment focuses on what policymakers and regulators are doing to address the backlog—and what additional reforms may still be required.

Read Part 1:

Interconnection queues: The clean energy bottleneck you don’t see (Part 1)

The 2023 FERC Order reform

Recognizing the growing backlog, the Federal Energy Regulatory Commission (FERC) finalized Order 2023, the most significant reform of interconnection procedures in two decades. The rule shifts these procedures from a “first-come, first-served” to a more disciplined “first-ready, first-served” framework. Transmission providers must now use cluster studies, evaluating projects in groups rather than sequentially. The rule also tightens financial readiness requirements to reduce speculative entries and imposes firm study deadlines. The goal is to improve throughput and reduce the cascading delays that add up over time. By studying projects in clusters and requiring stronger financial commitments from developers, the rule is intended to ensure that only viable projects move forward through the interconnection process.

There are early indications that the 2023 Order is beginning to help move projects forward. Interconnection agreements increased in 2024, and industry analysis suggests that cluster processing and stricter readiness requirements are helping convert queued capacity into signed contracts. Several regional operators are also piloting advanced digital modeling and AI-assisted tools to streamline studies and reduce administrative bottlenecks. However, the data from LBNL’s “Queued Up 2025” report still shows that median wait times remain above four years, and withdrawal rates remain high across major electricity markets. In other words, while reforms from the 2023 Order are beginning to take effect, the system is still working through years of accumulated backlog.

What else could help?

While Order 2023 is a good start, many analysts agree that the interconnection system still needs a fundamental realignment to cope with rapidly rising demand and changing generation patterns. A recurring theme across recent research is that the grid is still being planned reactively, expanding only in areas where new projects require significant upgrades. Developers and regulators need to adopt a more proactive, regional approach, building capacity in areas that are expected to be prime locations for future renewable deployment and development.

There also needs to be greater transparency with regard to queue performance data. It remains difficult for outside regulators and researchers to consistently track queue performance across regions because data are fragmented across utilities and ISOs and are not always standardized or timely. Improving performance tracking data could allow increased use of digital modeling tools for better forecasting and automation processes to help improve queue times. Experts have also emphasized the importance of improving coordination across so-called “affected systems,” where projects in one region trigger upgrades in neighboring grids. The fragmentation of the U.S. grid across multiple Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs)—regional entities responsible for operating transmission networks and wholesale electricity markets—can also introduce additional delays and cost volatility.

Currently, there are also many legislative proposals up for debate in Congress that could help address the severity of the bottleneck. The House Natural Resources Committee approved the SPEED Act (H.R. 4776) to streamline federal permitting timelines and accelerate energy infrastructure approvals, including transmission projects that are critical for relieving congestion in interconnection queues. Related proposals—such as the SPEED and Reliability Act of 2025 (H.R. 5600) and the Cheap Energy Act, currently at the stage of a discussion draft—go further by explicitly targeting transmission expansion, modernization, and delayed interconnections as cost drivers.

Several lawmakers have also advanced proposals to strengthen the durability of lawfully issued permits and require agencies to justify delays, aiming to reduce regulatory uncertainty that can stall grid and generation projects after approval. If interconnection reform is paired with faster transmission siting, clearer cost allocation, and more predictable permitting timelines, it could unlock stalled capacity and help stabilize electricity markets facing rising demand and affordability pressures.

What can the United States learn from Europe?

The United States can also look to how similar grid constraints have been addressed in other advanced energy systems. In Germany, the rapid expansion of battery storage projects has exposed tensions between clean energy deployment and grid planning. The country’s energy regulator, the Bundesnetzagentur (BNetzA), is currently reviewing how storage facilities should contribute to grid costs as part of a broader overhaul of the national grid-fee system.

Battery storage projects in Germany currently benefit from a 20-year exemption from grid fees, a policy originally designed to encourage early investment in storage technology. However, regulators are now reconsidering this approach as the number of proposed storage installations has surged. BNetzA is exploring new tariff structures that would require storage operators to contribute to grid costs, potentially through charges tied to the amount of capacity an operator adds to the grid or to periods of local network congestion. The objective is to ensure that rapid storage deployment does not place disproportionate stress on transmission infrastructure and that grid costs are distributed more evenly over the long term.

European grid operators have increasingly moved toward anticipatory transmission planning, identifying renewable development zones and expanding network capacity ahead of expected project growth rather than waiting for individual projects to request interconnection. While these systems still face bottlenecks of their own, they demonstrate how stronger coordination between generation development and grid planning can reduce delays and prevent interconnection queues from expanding uncontrollably.

For the United States, the lesson is not that European systems have solved all interconnection challenges, but that transmission expansion and renewable deployment must be planned in parallel rather than sequentially.

Invest in the grid—not in fossil fuels!

The lengthy interconnection queue is one of the most serious obstacles facing the American renewable energy transition today. If the United States wants to compete with global leaders in clean energy deployment, significant federal investment will be needed to expand transmission infrastructure so electricity markets can operate as intended and private sector investment is not curtailed.

Yet federal energy policy under the Trump administration has so far focused more on energy production than on a comprehensive strategy for expanding transmission and modernizing the grid, leaving a growing gap between generation ambitions and transmission build‑out. Without a federal strategy to expand and modernize the grid, the gap between the pace of new energy development and the capacity of the transmission network will continue to widen.

If the United States intends to maintain energy security, keep electricity prices stable, and compete in the global clean energy economy, fixing the interconnection bottleneck must become a national priority. The projects are ready. The technology exists. What remains uncertain is whether the federal government will commit to building the grid needed to support it.

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Federal Energy Regulatory Commission; Berkeley Lab; Bundesnetzagentur; Wood Mackenzie Power & Renewables; Novogradac; House Committee On Natural Resources; RMI;

#EnergyTransition #CleanEnergy #RenewableEnergy #EnergyPolicy #EnergyGrid #GridInfrastructure #Transmission #GridModernization #EnergySecurity #ClimatePolicy #CheapEnergy #ElectricityMarkets #Interconnection #Energy

Editor: Alexander Ochs

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