Rand co-authors study on rising costs of connection to midcontinent energy grid

Electric transmission system operators (ISOs, RTOs, or utilities) require new large generators seeking to connect to the grid to undergo a series of impact studies before they can be built. This process establishes what new transmission equipment or upgrades may be needed before a project can connect to the system and assigns the costs of that equipment.

Joseph Rand and co-authors at the Berkeley Lab collected interconnection cost data from interconnection studies for the Midcontinent Independent System Operator (MISO), representing nearly 50% of all projects requesting interconnection from 2010 to 2020.

They find: 

• Average interconnection costs have grown as the number of interconnection requests have escalated
• Projects that have completed all required interconnection studies have the lowest cost compared to applicants still actively working through the interconnection process or those that have withdrawn.
• Broader network upgrade costs are the primary driver of recent cost increase.
• Potential interconnection costs for wind, storage, and solar are larger than for natural gas
• Larger generators have greater interconnection costs in absolute terms, but economies of scale exist on a per kW basis.
• Interconnection costs vary by location

Berkeley Lab has collected interconnection cost data for projects in MISO, PJM, SPP, ISO-NE, and NYISO and will publish a series of short analytical papers on this website. 

"Our cost sample is less than half of projects requesting interconnection from 2010 to 2020. The lack of interconnection cost data is an information barrier for prospective developers, resulting in a less efficient process" Rand shared on a Twitter thread with more figures and findings from the publication. 

Additional Resources

Seel, Joachim, et al. "Generator Interconnection Cost Analysis in the Midcontinent Independent System Operator (MISO) territory." (2022).