$500K NSF Grant Funds Economists’ Project to Smooth Nation’s Transition to Renewable Energy

A $500,000 award from the National Science Foundation is funding a study by the University of Maryland and University of Wisconsin to solve challenges that renewable energy generator companies face when they try to connect their wind-, water- or solar-powered energy source to the U.S. power grid.

Companies must undergo the often-multiyear process before they can sell that electricity option to consumers, and those pursuing a renewable generator connection take longer and have a lower completion rate than those of fossil fuel generators, said economics Assistant Professor Chengyu Yang.

“With this project, we’re asking why it’s taking so long for renewable generators to connect, and then once we identify those reasons, offering policy suggestions on how best to improve the interconnection process,” he said.

Yang and Wisconsin Assistant Professor Sarah Johnston have already identified two major contributing factors: a shortage of engineers who can determine whether a renewable energy applicant will dangerously overload the grid, and the consequence of triggering an overload on the grid.

Currently, if a generator triggers an overload, it pays the whole cost of installing or upgrading the damaged line—benefitting other generator companies as well, Yang said. “There is a sense in which the first generator that causes an overload might have overpaid, and that those costs should be reallocated across other generators using the line over time.”

ISO-New England, which manages electricity transmission in that region, addresses this by requiring a generator using an upgraded line to pay a share of funds to the generator that paid for it. Whether that scheme would increase renewable generators’ likelihood of connecting elsewhere in the U.S, is a question Yang and Johnston hope to answer.