Playbook: adopting Power markets, permitting & interconnection in 90 days
A step-by-step rollout plan with milestones, owners, and metrics. Focus on interconnection queues, permitting timelines, and bankability constraints.
The United States grid faces an unprecedented bottleneck: as of late 2024, approximately 2,300 GW of generation and storage capacity sits waiting in interconnection queues—nearly double the nation's total installed capacity (Lawrence Berkeley National Lab, 2025). Only 13-14% of projects requesting interconnection between 2000-2019 ever reached commercial operation, while the median timeline from request to operation has stretched from under 2 years in 2007 to over 5 years today. For procurement teams, project developers, and sustainability leaders navigating this landscape, understanding power markets, permitting pathways, and interconnection dynamics is no longer optional—it is essential for achieving decarbonization goals on schedule.
Why It Matters
The interconnection queue backlog represents a critical chokepoint for the clean energy transition. According to FERC Order 2023 implementation data, 77% of projects entering the queue between 2000-2019 ultimately withdrew before reaching operation (FERC, 2024). This attrition rate reflects not just speculative project entries, but systemic failures in grid planning, permitting coordination, and market design.
For organizations with net-zero commitments, these delays translate directly to stranded capital and missed emissions reduction targets. The average utility-scale solar project now requires 2-4 years for permitting alone, while onshore wind projects can take 5-10 years from conception to operation (Resources for the Future, 2024). Without strategic navigation of these processes, even well-funded projects risk joining the 112 GW of solar and storage capacity that withdrew from queues in 2024 alone.
The stakes extend beyond individual projects. The IRA's $369 billion in clean energy incentives cannot deliver intended emissions reductions if projects cannot connect to the grid. Data centers, manufacturing reshoring, and electrification of transportation are driving unprecedented load growth, creating a race between new generation capacity and rising demand. Organizations that master interconnection and permitting processes gain competitive advantage in securing grid access, power purchase agreements, and project financing.
Key Concepts
Interconnection Queue Dynamics
The interconnection queue represents all generation and storage projects seeking grid connection through an Independent System Operator (ISO) or Regional Transmission Organization (RTO). Key metrics include:
| Metric | 2023 Baseline | 2024 Status | Target Range |
|---|---|---|---|
| Total Queue Capacity | 2,600 GW | 2,300 GW | <1,500 GW |
| Median Time to Operation | 5 years | 4-5 years | <3 years |
| Completion Rate (Solar) | 14% | 14% | >25% |
| Completion Rate (Storage) | 11% | 11% | >20% |
| Projects with Signed IAs | 9.1% | 16% | >30% |
Source: Lawrence Berkeley National Lab Queued Up 2025 Edition
FERC Order 2023 Framework
The Federal Energy Regulatory Commission's Order 2023, issued July 2023 with Order 2023-A following in March 2024, fundamentally restructured interconnection processes nationwide. The reform shifts from serial "first-come, first-served" studies to cluster-based "first-ready, first-served" approaches, with enhanced financial readiness requirements and 150-day study timelines.
Permitting Pathways
Federal environmental review under NEPA averages 27 months for solar projects and 45 months for wind projects requiring full Environmental Impact Statements. State and local permitting adds additional complexity, with significant variation by jurisdiction. The Fiscal Responsibility Act of 2023 established two-year NEPA targets and single lead agency coordination to streamline reviews.
Bankability Constraints
Project bankability—the ability to secure financing—depends on interconnection certainty, permitting status, and power offtake agreements. Lenders increasingly require signed Interconnection Agreements (IAs) before committing capital, creating a chicken-and-egg challenge for developers navigating multi-year queue processes.
What's Working
Cluster Study Reforms Showing Results
PJM's interconnection reform transition has demonstrated measurable success. The region reduced its transition queue from approximately 200,000 MW to 46,000 MW—a 77% reduction—by September 2024 (PJM Inside Lines, 2024). Transition Cycle 1 studies completed in September 2024 produced 130 draft agreements covering 17.4 GW of capacity. PJM now projects 72,000 MW total cleared by late 2025, with new cycles offering 1-2 year turnaround times versus the previous 8+ year historical average.
CAISO Zonal Prioritization
California ISO's Track 2 reforms, approved by FERC in October 2024, introduced a project scoring system weighting commercial interest (30%), project viability (35%), and system need (35%). For Cluster 15, this approach reduced applications from 541 projects (347 GW) to 145 projects (68 GW)—a 73% reduction in project count and 80% reduction in capacity (CAISO, 2024). CEO Elliot Mainzer noted the reforms "immediately cleared like 65% of the requests out of the queue."
Record Interconnection Agreements
Despite queue challenges, 2024 saw record progress in securing interconnection agreements. A record 75 GW of interconnection agreements were signed in 2024, with 58 GW (77%) representing solar and storage projects. Through July 2025, 36 GW had already been secured—on pace to match the 2024 record.
Automated Study Technologies
Engineering automation has dramatically accelerated interconnection analysis. Pearl Street Technologies' SUGAR™ platform delivers power flow simulations 200x faster than industry-standard modeling, enabling same-day cost estimates for queued projects. Before its acquisition by Enverus in March 2025, the company had processed over 300 GW of queued projects through its platform.
What's Not Working
Post-Study Bottlenecks
While study process reforms show progress, post-study obstacles remain the critical constraint. PJM reports 46,000 MW of projects with signed interconnection agreements are stalled by permitting, siting, supply chain issues, and financing challenges. An additional 199 projects (16,541 MW) sit in engineering and procurement phases, while 138 projects (12,077 MW) have been suspended for 1-3 years (PJM, 2024).
Transmission Infrastructure Lag
The interconnection queue cannot clear faster than transmission infrastructure expands. Physical grid upgrades take 5-10 years to plan, permit, and construct—longer than the projects waiting to connect. Network upgrade costs have increased 88% over the past decade, with PJM projects now averaging $240/kW for completed projects versus $599/kW for withdrawn projects.
Regional Inconsistency
Despite FERC Order 2023's national framework, implementation varies significantly across ISOs and RTOs. CAISO projects spend an average of 9.2 years in queue—the longest of any ISO—while ERCOT offers comparatively streamlined processes. ISO-NE received approval for 270-day cluster study timelines versus the 150-day pro forma, with first cluster studies not beginning until October 2025.
Local Permitting Fragmentation
While federal permitting reforms have reduced NEPA timelines, state and local permitting remains fragmented. Land use permits may take years to acquire, with outcomes depending on local political dynamics, community opposition, and administrative capacity. Rural counties lack technical expertise to evaluate utility-scale renewable projects, creating delays even for non-controversial developments.
Key Players
Established Leaders
PJM Interconnection: The nation's largest grid operator, serving 65 million people across 13 states and D.C., PJM has led interconnection reform implementation with its transition cycle approach and Fast Lane process for lower-impact projects.
California ISO (CAISO): Managing California's bulk electric system, CAISO has pioneered zonal approaches and project scoring systems that are being studied for replication elsewhere. The ISO's coordination with state agencies has delivered 25 GW of new generation since 2022.
Enverus (via Pearl Street Technologies acquisition): The energy data giant's March 2025 acquisition of Pearl Street Technologies positions it as the leading provider of interconnection automation software, with SUGAR™ and Interconnect® platforms deployed across major transmission providers.
Lawrence Berkeley National Lab: The lab's Energy Markets & Policy group publishes the definitive annual "Queued Up" reports tracking interconnection queue status nationwide, providing essential data for policymakers and market participants.
Emerging Startups
Paces: A Y Combinator S22 company, Paces offers a green infrastructure data platform aggregating interconnection queue data, zoning, permitting, and site selection information. The platform uses AI-powered workflows to compress due diligence processes from months to days, with $1.9M in pre-seed funding from Resolute Ventures.
interconnection.fyi: A free real-time tool tracking interconnection queue requests across ISOs and utilities with daily data updates, enabling developers to monitor queue dynamics and identify opportunities.
Enexor BioEnergy: Developing modular biogas-to-electricity systems targeting sites with interconnection constraints, the company offers an alternative pathway to grid access through behind-the-meter deployment and demand response participation.
Key Investors & Funders
U.S. Department of Energy i2X Program: DOE's Innovative Queue Management Solutions (iQMS) program has allocated $11.2 million to fund distribution utilities piloting interconnection queue management software, with Phase 1 awarding $2.1 million to 12 projects in January 2025.
Powerhouse Ventures: The Oakland-based climate tech VC has been active in interconnection software investments, backing Pearl Street Technologies and publishing detailed analysis of startup opportunities in solving interconnection.
VoLo Earth Ventures: A climate tech investor backing Pearl Street Technologies and other grid modernization companies, VoLo focuses on software solutions that can scale without physical infrastructure constraints.
Examples
1. PJM Transition Cycle Success
PJM's implementation of FERC Order 2023 reforms provides a replicable model for other regions. By requiring higher financial deposits and introducing readiness criteria, PJM filtered 246 speculative projects from its queue within 18 months—representing one-third of total entries. The Fast Lane process moved 284 projects (approximately 26,000 MW) through expedited review. For developers, PJM now offers predictable 1-2 year study timelines, enabling financing decisions based on realistic commissioning dates.
2. CAISO Cluster 15 Prioritization
CAISO's Track 2 reforms demonstrate how zonal prioritization can dramatically reduce queue congestion. By establishing a 150% transmission capacity cap for study advancement and scoring projects on commercial viability, CAISO achieved 73% project reduction for Cluster 15. Projects scoring below threshold could resubmit with enhanced readiness documentation or pursue merchant interconnection paths with self-funded network upgrades. The approach forced developers to demonstrate commitment before consuming administrative resources.
3. MISO Partnership with Pearl Street Technologies
The Midcontinent Independent System Operator partnered with Pearl Street Technologies (now Enverus) to deploy SUGAR™ modeling for queue analysis in 2024. The collaboration enabled MISO to process interconnection studies significantly faster than legacy tools, with Carnegie Mellon University research showing the platform's power flow simulations running 200x faster than industry alternatives (CMU, 2024). This technology deployment illustrates how software automation can alleviate study bottlenecks without physical infrastructure investment.
Sector-Specific KPIs
| KPI | Baseline | 90-Day Target | 12-Month Target | Owner |
|---|---|---|---|---|
| Queue Position Secured | 0 | Application filed | Study phase | Development Lead |
| Interconnection Study Costs Estimated | ±50% accuracy | ±25% accuracy | ±10% accuracy | Engineering |
| Permitting Timeline Mapped | Unknown | Pathway identified | Key permits in-hand | Permitting Manager |
| Financial Readiness Deposits | Unfunded | Reserved | Deposited | Finance |
| PPA Negotiations | Not started | LOI signed | Term sheet agreed | Commercial Lead |
| Transmission Upgrade Cost Allocation | Unknown | Indicative estimate | Study-based quote | Development Lead |
| Community Engagement Plan | None | Stakeholder mapping | Engagement initiated | External Affairs |
Action Checklist
- Week 1-2: Conduct site screening using interconnection capacity maps and Paces or similar data platforms to identify locations with available transmission headroom
- Week 2-4: Engage ISO/RTO interconnection services to understand current queue status, cluster study timing, and financial readiness requirements for target region
- Week 4-6: Prepare Interconnection Request package including preliminary engineering, site control documentation, and required financial deposits
- Week 6-8: Submit Interconnection Request during designated cluster window and enter customer engagement process to evaluate preliminary cost estimates
- Week 8-10: Initiate parallel permitting workstreams including NEPA categorical exclusion evaluation, state environmental review, and local land use applications
- Week 10-12: Develop community engagement strategy addressing visual impact, economic benefits, and environmental considerations with local stakeholders
- Week 12+: Monitor study process milestones, prepare withdrawal/proceed decision based on cost allocation outcomes, and advance financing discussions contingent on IA execution timeline
FAQ
Q: How much capital should we reserve for interconnection study costs and deposits?
A: Financial readiness requirements vary by ISO/RTO and project size. Under FERC Order 2023 frameworks, expect study deposits of $10,000-$50,000 for preliminary studies plus 10-15% of estimated network upgrade costs for subsequent phases. PJM data shows average interconnection costs of $240/kW for successfully completed projects, so a 100 MW project should budget $20-30 million for potential network upgrade allocations. Reserve study deposits in accessible accounts and structure project financing to accommodate cost allocation outcomes from cluster studies.
Q: What strategies can reduce interconnection timeline risk?
A: Four approaches demonstrate effectiveness: (1) Target locations with documented transmission capacity through ISO-published hosting capacity analyses; (2) Consider behind-the-meter or distribution-level interconnection for projects under 5 MW, which may avoid transmission queue entirely; (3) Participate in "shovel-ready" or expedited pathways that prioritize projects demonstrating site control, permitting progress, and financial commitment; (4) Explore co-location with retiring generation assets that may transfer existing interconnection rights.
Q: How does FERC Order 2023 change our queue strategy?
A: Order 2023's shift to cluster-based studies means projects are evaluated together rather than serially. This requires timing application submissions to designated cluster windows rather than filing immediately. The "first-ready, first-served" approach rewards demonstrated project maturity—site control, permitting progress, and financial readiness—over simply entering the queue early. Expect higher upfront deposits and stricter withdrawal penalties designed to deter speculative entries.
Q: What permitting pathways offer the fastest timelines?
A: Categorical exclusions under NEPA offer the fastest federal review path, potentially completing in weeks rather than years for projects meeting established criteria. State-level programmatic approaches, such as California's Solar Energy Zones or New York's Unified Solar Permit, can reduce local permitting to 25-30 days for qualifying projects. Brownfield sites with prior industrial use often have expedited environmental review. For projects requiring full EIS, early coordination with lead agencies and parallel (not sequential) state and federal reviews can compress timelines.
Q: How do we evaluate whether to proceed or withdraw after study results?
A: Establish decision criteria before entering the queue: maximum acceptable network upgrade cost per MW, maximum allocation as percentage of total project cost, and required timeline for IA execution to maintain financing and offtake commitments. Order 2023's customer engagement window provides 60 days to evaluate study results and withdraw penalty-free. Use automated tools like Pearl Street/Enverus Interconnect® for shadow studies validating ISO cost estimates before committing.
Sources
- Lawrence Berkeley National Lab. "Queued Up: 2025 Edition, Characteristics of Power Plants Seeking Transmission Interconnection As of the End of 2024." 2025. https://emp.lbl.gov/queues
- Federal Energy Regulatory Commission. "Explainer on the Interconnection Final Rule (Order 2023)." 2024. https://www.ferc.gov/explainer-interconnection-final-rule
- Resources for the Future. "How Long Does It Take? National Environmental Policy Act Timelines and Outcomes for Clean Energy Projects." 2024. https://www.rff.org/publications/reports/how-long-does-it-take-national-environmental-policy-act-timelines-and-outcomes-for-clean-energy-projects/
- PJM Inside Lines. "PJM Generation Interconnection Reforms Continue to Produce Results." 2024. https://insidelines.pjm.com/pjm-generation-interconnection-reforms-continue-to-produce-results/
- California ISO. "FERC Approves ISO Interconnection Reforms." October 2024. https://www.caiso.com/about/news/news-releases/ferc-approves-iso-interconnection-reforms
- Carnegie Mellon University. "CMU Startup Tapped to Help Plan the Electric Grid of the Future." September 2024. https://www.ece.cmu.edu/news-and-events/story/2024/09/pearl-street-miso-partnership.html
- U.S. Department of Energy. "i2X Innovative Queue Management Solutions (iQMS) for Clean Energy Interconnection." 2025. https://www.energy.gov/eere/i2x/
- Wood Mackenzie. "5 Key Questions About US Grid Interconnection Answered." 2025. https://www.woodmac.com/news/opinion/5-key-questions-about-us-grid-interconnection-answered/
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