Grid connection auctions proposed to speed US power projects
7 reported
A recent article in Works in Progress highlights a proposal to use auctions for grid connection rights to address delays in connecting electricity generation to the US power grid. The article, written by Chris Gillett, notes that the US has sufficient generation capacity but faces a bottleneck in connecting it to the grid. The current first-come, first-served queue system is described as a flaw, as it can delay high-priority projects behind less important ones. Gillett compares the situation to airport congestion where small aircraft can delay larger ones. The article also explains how market prices signal supply and demand, using data from ERCOT to show how solar output growth led to a decline in the value of midday power and spurred battery storage development.
What’s reported
The US has plenty of electricity generation capacity, but the problem is connecting it to the grid.
The interconnection process uses a first-come, first-served queue, which can delay high-priority requests.
Auctions for connection rights are proposed as a solution, similar to airport slot auctions.
Some loads should be allowed to connect on a flexible basis, such as data centers that can disconnect during peak hours.
From December 2020 to September 2025, maximum solar output in ERCOT increased from 4 to 29.8 gigawatts.
From 2020 to 2025, the value of power at 1pm relative to the highest-priced hour decreased from 92.9 percent to 38.7 percent.
From 2020 to October 2025, ERCOT went from almost no battery storage to a combined battery discharge of 8.6 gigawatts.
Key figures
Chris Gillett (author of the Works in Progress article)
Vickrey (referenced for airport auction concept)
Rassenti, Smith and Bulfin (referenced for classic paper on airport auctions)
Sources: marginalrevolution.com
