Federal regulators and regional grid operators are accelerating efforts to overhaul the U.S. generator interconnection process as a record surge in utility-scale battery storage projects deepens backlogs and strains existing permitting frameworks. The reforms, anchored by the Federal Energy Regulatory Commission's Order 2023, are reshaping how storage developers secure grid access - but analysts say significant structural obstacles remain.
Background
The interconnection bottleneck has grown alongside the storage buildout. As of the end of 2024, approximately 10,300 projects were actively seeking grid interconnection, representing around 890 GW of storage capacity alone, according to Lawrence Berkeley National Laboratory's annual "Queued Up" report. The median time from interconnection request to commercial operation has more than doubled - from under two years for projects built in 2000-2007 to over four years for those built in 2018-2024, Berkeley Lab data showed.
The storage deployment driving this queue growth has been substantial. The U.S. energy storage industry installed a record 57.6 GWh of new capacity in 2025, the largest single year of additions on record, according to the Solar Energy Industries Association. Developers plan to add a further 24 GW of utility-scale battery storage to the grid in 2026, compared with a record 15 GW added in 2025, according to the U.S. Energy Information Administration. Storage capacity now outnumbers gas power in interconnection queues by a factor of 6.5, according to data compiled by Lawrence Berkeley National Laboratory.
Details
FERC's Order 2023, issued in July 2023, represents what acting Chairman Willie Phillips described as "the largest and most significant set of interconnection reforms" since standardized procedures were first established two decades ago. The rule replaced the previous first-come, first-served serial study process with a cluster-based, first-ready, first-served model, intended to reduce speculative queue entries and accelerate viable projects. It also imposed firm deadlines on transmission providers to complete interconnection studies and introduced penalties for non-compliance. Specific to storage, the rule requires transmission providers to use operating assumptions in interconnection studies that reflect the proposed charging behavior of electric storage resources.
Implementation, however, is uneven across regions. PJM Interconnection - North America's largest grid operator - says it will process its remaining legacy queue capacity in 2025 and 2026 before transitioning to the first cycle of its reformed interconnection process, which took effect in July 2023. PJM expects the new process will take one to two years to evaluate projects, faster than recent U.S. averages for interconnection studies. FERC approved PJM reforms - including updates to the surplus interconnection service process - in February 2025.
ERCOT in Texas offers a contrasting model. The ERCOT interconnection process takes approximately 3.5 years to complete, compared with an approximate wait time of six years in other U.S. jurisdictions, according to an analysis by Resources for the Future. Texas is set to overtake California in 2026 as the largest energy storage market in the country, according to SEIA.
The American Clean Power Association, in an August 2025 report by Aurora Energy Research, warned that batteries can be built and brought online quickly, but lengthy bureaucratic processes can force shovel-ready projects to wait years just to connect to the grid. The report found that deploying 4 GW of battery storage across the Central U.S. - served by the Southwest Power Pool - could generate $7 billion in energy cost savings for consumers.
Despite the reform push, Berkeley Lab noted that only 13% of capacity that submitted interconnection requests from 2000 to 2019 had reached commercial operations by the end of 2024, with 77% of that capacity having been withdrawn. Analysts at the lab cautioned that while Order 2023 and related measures are important, "it is too early to measure and assess their full impact."
Outlook
The Department of Energy issued an Advanced Notice of Proposed Rulemaking in October 2025 directing FERC to expand its jurisdiction to accelerate interconnection of large loads, including data centers and industrial facilities - a proceeding that PJM has cautioned could raise jurisdictional complications. The Brattle Group, commissioned by the U.S. Energy Storage Coalition, projected that PJM alone will need 16 GW of energy storage by 2032 and 43 GW by 2045 to meet resource adequacy needs. As regional operators enter the first cluster cycles under Order 2023, the practical impact on storage project timelines is expected to come into sharper focus over the next 12 to 18 months.
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