The composition of America’s power plant pipeline is undergoing a structural shift. New data from Interconnection.fyi tracking the U.S. grid connection queue shows geothermal project capacity has jumped 171% year-over-year, while nuclear has expanded 81% and natural gas 48%. In the same period, solar has contracted by nearly 20% and offshore wind has plummeted 63%. This reversal-firm, dispatchable power gaining ground at the expense of intermittent renewables-signals a fundamental repricing of grid reliability and a strategic pivot among developers who are responding to data center demand and tightening interconnection rules.
The Interconnection Queue as a Leading Indicator
The interconnection queue is the administrative gateway every generator must clear to connect to the transmission network. It represents the sum total of developer intent, and while not every queued project reaches commercial operation, the directional shifts in the queue are a reliable proxy for where capital is flowing. The current total of 1.8 terawatts across more than 8,000 projects is itself a record, but the composition matters more than the headline number.
Geothermal’s 171% jump is the standout. This is not the conventional hydrothermal resource of the past-flash steam plants in California and Nevada-but rather next-generation technologies including enhanced geothermal systems (EGS) and closed-loop designs that can be deployed in more geographies. The surge suggests that improvements in drilling technology, borrowed from the oil and gas sector, are translating into commercial credibility. Fervo Energy’s Utah project, which came online in late 2023, demonstrated that horizontal drilling and hydraulic stimulation can produce baseload geothermal power at competitive prices. The queue data indicates that developers are now scaling this approach.
The nuclear expansion is similarly notable. The 81% increase reflects both large-scale reactor proposals and the growing interest in small modular reactors (SMRs). Utilities and tech companies are driving this trend-major hyperscalers have signed power purchase agreements with nuclear operators to secure carbon-free, 24/7 electricity for their data centers. The queue numbers suggest this is not just corporate posturing but actual project development moving through the pipeline.
Natural gas, up 48%, is the third leg of this firm-power stool. While some of this is traditional combined-cycle gas turbines, a significant portion is likely gas peakers designed to backstop intermittent renewables. The dual pressures of retiring coal plants and surging electricity demand from AI data centers are creating a near-term need for dispatchable capacity that gas can fill faster than any other technology.
What the Decline of Solar and Wind Signifies
The nearly 20% drop in queued solar capacity and the 63% collapse in offshore wind are counterintuitive at first glance. Solar and wind remain the cheapest new-build electricity sources in most of the country. But the queue data reflects a rational response to market conditions, not a loss of technological competitiveness.
Solar developers are facing a triple squeeze. First, interconnection costs have risen sharply as transmission upgrades are allocated to new projects. Second, the Inflation Reduction Act’s tax credit provisions are being fully arbitraged, meaning the marginal project is less profitable than the early movers. Third, and most critically, the market value of solar is declining as penetration increases. The “duck curve” phenomenon-where midday solar generation depresses wholesale prices-is now well-established across most of the country. A developer looking at a solar project in California or Texas sees a plant that will generate power during hours when prices are lowest.
Offshore wind’s 63% contraction is more dramatic and reflects project-specific headwinds. Supply chain disruptions, vessel shortages, and rising turbine costs have pushed several large projects to the brink. The cancellation of two major projects off the New Jersey coast and renegotiations in Massachusetts have sent a chill through the sector. The queue data suggests that while the long-term potential remains, the near-term pipeline is thinning as developers reassess project economics.
The Data Center Demand Shift and Grid Reliability Calculus
This rebalancing of the queue cannot be understood without examining the demand side. U.S. electricity demand is projected to grow at rates not seen in two decades, driven primarily by data center construction. The largest technology companies have announced massive capital expenditures for AI infrastructure, and these facilities require power that is available around the clock, not just when the sun shines or the wind blows.
The hyperscalers have been explicit about their preferences. Several have signed agreements with nuclear operators, including the high-profile restart of the Three Mile Island plant under a Microsoft contract. Others have invested directly in geothermal startups. This corporate demand signal is reshaping the project pipeline because developers follow creditworthy buyers. A solar developer can secure a power purchase agreement, but a geothermal or nuclear developer can secure a long-term contract at a premium price with a hyperscaler willing to pay for reliability.
The grid reliability calculus has also shifted at the regulatory level. FERC Order 2023, which took effect in 2024, reformed the interconnection process to penalize speculative projects and prioritize those with financial backing. This has weeded out the “land banking” that previously clogged the queue-developers who reserved interconnection capacity without a realistic path to construction. The result is a leaner, more serious queue. The projects remaining are those with real financing, real offtake agreements, and real engineering plans.
This regulatory tightening disproportionately affects intermittent resources because they are more likely to be developed on a speculative basis. A solar project can be proposed with minimal site control and no offtake agreement, but the new rules require readiness deposits and impose penalties for delays. Firm power projects, which typically involve larger balance sheets and more sophisticated developers, are better positioned to navigate these requirements.
Implications for Power Markets and Transmission Planning
The shift toward firm power in the queue has significant implications for wholesale electricity markets and transmission planning. Regional transmission organizations (RTOs) that operate capacity markets-including PJM, MISO, and ISO-NE-will see a different mix of resources clearing their auctions over the coming years. This could firm up capacity prices as the marginal resource shifts from low-cost solar to higher-cost gas or geothermal.
Transmission planning will also need to adapt. The existing grid was built around large, centralized power plants connected to load centers. The renewable buildout of the past decade required massive new transmission lines to move wind power from the Great Plains and solar from the Southwest. A pivot toward geothermal and nuclear, which can be sited closer to load centers, could reduce the need for new long-distance transmission. Geothermal projects in the western U.S. and nuclear plants near existing industrial corridors can connect to the existing grid with less new infrastructure.
For the energy storage sector, this shift cuts both ways. Battery storage was originally conceived as the perfect complement to solar and wind-charging when renewable generation is cheap and discharging when it is not. If the queue is shifting toward firm power, the arbitrage opportunity for storage narrows. However, storage still plays a critical role in providing peaking capacity and grid services, and the demand for these services will grow as the grid becomes more complex. The storage developers who will thrive are those who can provide long-duration solutions that compete with gas peakers rather than short-duration batteries that merely shift solar output.
Who This Affects
- Utility resource planners: The queue data validates a shift in procurement strategy. Utilities that have been mandated to meet clean energy standards should evaluate geothermal and advanced nuclear as portfolio options, not just as research projects. The declining cost curves for these technologies, combined with their firm power characteristics, make them increasingly competitive with gas-plus-storage configurations.
- Renewable developers: The contraction in solar and offshore wind queue positions is a warning sign. Developers in these sectors need to differentiate their projects-either by adding storage capacity, securing corporate offtake agreements, or focusing on regions with less interconnection congestion. Pure-play solar developers without a firm power strategy will face increasing difficulty securing interconnection and financing.
- Data center and industrial energy buyers: The shift toward firm power in the queue is good news for buyers who need 24/7 reliability. The growing availability of geothermal and nuclear capacity, coupled with new gas plants, provides more options for long-term contracts. Buyers should be evaluating these technologies now to lock in favorable rates before the competition intensifies.
- Transmission planners and grid operators: The changing resource mix will alter grid flow patterns. Planners should model scenarios with higher penetration of firm, dispatchable resources located near load centers, which will reduce the need for long-distance transmission but increase the importance of local distribution upgrades. Interconnection studies should be updated to reflect the new reality that the next wave of projects will look different from the last.
What to Watch Next
- FERC Order 2023 implementation data: The first full year of the new interconnection rules will show whether the queue continues to lean toward firm power. If the trend accelerates, it will confirm that the regulatory changes are having their intended effect of prioritizing serious projects.
- Geothermal cost and deployment milestones: Watch for announcements of new EGS projects reaching final investment decision. The 171% queue growth needs to translate into actual construction starts. Key indicators include drilling rig counts in geothermal basins and any supply chain investments in specialized drilling equipment.
- State-level nuclear support mechanisms: Several states are considering legislation to support advanced nuclear development, including cost-sharing mechanisms and ratepayer-backed financing. The passage of such legislation in states like Texas, Virginia, or the Carolinas would accelerate the nuclear pipeline.
- Offshore wind project rescoping: The 63% decline in offshore wind queue capacity may not be permanent. Watch for developers re-filing projects with revised turbine configurations or new supply chain partnerships. A stabilization in offshore wind costs would likely reverse the queue contraction.
- Data center power procurement announcements: The next wave of hyperscaler power purchase agreements will signal which technologies the market believes are ready for prime time. If the major tech companies sign additional nuclear or geothermal deals, expect the queue trends to continue.
Bottom Line
The interconnection queue is no longer dominated by intermittent renewables. The 1.8 TW pipeline now reflects a strategic pivot toward firm, dispatchable power-geothermal, nuclear, and natural gas-driven by data center demand, regulatory reform, and the growing recognition that reliability has a price. For market participants, the message is clear: the future grid will be built on a more diverse foundation than the solar-and-wind buildout of the past decade, and those who adapt their strategies accordingly will be best positioned to capture value.
Read the full report at EnergyCentral
Note: facts and figures attributed above to reflect that outlet's original reporting. Broader context, cross-sector connections, and forward-looking scenarios reflect independent analysis by our editorial team.
About this article: Drafted by Energy Ai with AI-assisted research and writing based on public reporting, then reviewed under our editorial process before publication.
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