Steven Zhang’s Post

$389 per kW. That's the median grid upgrade cost Southwest Power Pool just assigned to 251 projects in the DISIS 2024 cluster. For context, the median in the previous years' 2022/2023 clusters was around $150/kW. That's a 2.6x increase in a single cycle. SPP posted Phase 1 study results on March 13 for the largest cluster in its history - 66.5 GW of proposed generation across 251 active projects. Total allocated upgrade costs: $30.2 billion. Some observations: - 37 projects got hit with costs above $1,000/kW. At those levels, the grid upgrade bill alone can rival the cost of building the project itself (solar construction costs are roughly $800-$1,200/kW) - Gas projects face a median of ~$100/kW. Solar and wind? $400 to $750/kW ☀️💨. The cost disparity by resource type is stark. - The six most expensive upgrades account for $6.5 billion - 22% of the entire cluster's costs. A handful of transmission bottlenecks are driving a huge share of the total bill. - Over 30% of the original cluster withdrew before Phase 1 results were even posted. Expect more withdrawals now that developers have seen the numbers. Developers have 15 business days to decide whether to proceed or drop out. We built a full interactive report at Interconnection.fyi breaking down every project, upgrade, and cost in this cluster. 👉 Check it out here: https://lnkd.in/eJJ7N7ai --- ℹ️ For those new to the energy space: SPP (Southwest Power Pool) is one of several regional grid operators in the U.S. It manages the electric transmission system across 14 states in the central U.S. When a developer wants to connect a new power plant to the grid, they submit a request to the grid operator. That request enters an interconnection queue/ waiting line. The grid operator then has to study whether the grid can handle the new plant, and what upgrades (new transmission lines, transformers, substation expansions) are needed to make it work. SPP doesn't study these requests one at a time. It batches them into "clusters" and studies the whole group together. This process is called DISIS (Definitive Interconnection System Impact Study). The DISIS 2024 cluster is the latest batch. "Phase 1" is the first round of results - projects get their initial cost assignments and then decide whether to continue or withdraw. "Allocated costs" means the share of grid upgrade costs assigned to each project. If connecting your 200 MW solar farm requires a new transmission line that also benefits other projects, the cost of that line gets split among the projects that triggered it. For scale: building a new solar farm itself costs roughly $800-$1,200/kW. So a $389/kW grid upgrade allocation adds 30-50% on top of construction costs. At $1,000+/kW, the upgrade bill rivals the project itself. #interconnectionfyi #interconnectionqueue #spp #energy #grid #powergeneration