Transmission Spells Opportunity
Ameren and Others Take a Fresh Look at the Lines Business
The transmission sector in the United States is poised for a revolution. The lines stitching together the world's most advanced power grid, long considered an engineering marvel, is about to move in startling new directions.
The change will open up a slow-growing, economically huge sector to new innovators and entrepreneurs, experts around the industry tell EnergyBiz.
Trans-Elect, a small group of veteran transmission folks, backed with Google's fortune, plans to build a $5 billion transmission node in the Atlantic to jumpstart offshore wind generation - big time.
Tres Amigas, the brainchild of transmission industry leader Phillip Harris, has launched a plan that will cost between $500 million to $1 billion to link eastern, western and Texas transmission grids into a national, seamless power highway.
Both Robert Mitchell, Trans-Elect chief executive, and Phillip Harris will be speaking about their transformational efforts at the EnergyBiz Leadership Forum in Washington, February 27 - March 1.
The ferment they represent is reaching well into the ranks of established utilities.
Ameren, the St. Louis based utility giant, also sees lots of potential in transmission. It recently announced it formed a subsidiary to build new transmission projects initially within Missouri and Illinois, having identified more than $3 billion of investment opportunities in the two states.
Ameren, like many other utilities, is stepping up transmission investments. Investor-owned utilities are expected to spend $9.7 billion on transmission this year, and ramp that spending up to $12.3 billion annually by 2013, according to the Edison Electric Institute.
EnergyBiz magazine recently interviewed Thomas Voss, Ameren president and chief executive, for the current November/December issue. Voss elaborated on the potential of new transmission investments in comments, some of which went beyond the scope of the magazine interview and were never-before published. They follow, edited for style and length.
EnergyBiz: Why are you focusing on transmission?
Voss: We're in a good spot here. If you take the renewable resources that are being developed in the places like Colorado, Kansas and the Dakotas, and you're trying to get them to the East, we're certainly a good spot for it to go through.
EnergyBiz: Do we need a new national transmission highway?
Voss: It certainly makes sense to do some large projects that are multi-state. That would improve the congestion that we have in the grid at certain areas. You know our transmission grid was designed to bring the generation into the load centers. Now we're talking about transferring power across regions which is a whole different matter. It's a much more complicated than people really understand.
EnergyBiz: Do you think it's going to be a growth business in coming years?
Voss: Yes, I do. People are going to be building it and charging our customers for it, so we might as well be in that mix, too. We can be sensitive to what the right routes will be for our areas in Missouri and Illinois versus someone who's outside of our area. We should be a player when it goes through our states.
Comments
transmission load factor & storage
The comment on renewables and load factor points out an important value for bulk energy storage on the grid. At least one firm, Gridflex Energy, is proposing bulk energy storage projects - both pumped storage hydro and compressed air energy storage (CAES) -- across the country in areas of intensive renewable energy development. One of the intentions for these projects is to make more efficient use of some of the major transmission projects being developed. By shaving the peak off of wind output and returning that energy when wind drops, the transmission load factor would be increased significantly. That is in addition to the benefit of being able to turn variable and intermittent resource into a firm capacity product.
Transmission Building
Mr. Voss's comments were right on the money. "People are going to be .. charging our customers.." This is what makes transmission such an opportunity. The ability to get FERC consent for transmission owners to charge all electric customers a fixed rate with generous incentives in perpetuity is a wonderful draw. Note that Google is not funding any facilities, only the front end speculation on the success of Trans-Elect to get FERC approval for charging all customers in a fairly large part of the U.S. for significant returns on any future investment that may be made.
Delighted to read an article
Delighted to read an article that speaks of progress, opportunity, and investment without one word about federal government funding to make it happen. Right-of-way is a little federal but only in the allowing and assisting mode. The realities of permitting may prove to be another matter. Hats off to Google for offering their money to take the risk for offshore wind development. If my view proves to be a mirage I will not regret the vision, only wish it was true.
The Bigger They Are the Harder They Fall
The subject line is something we better remember. The driver for this transmission planning seems to be to transmit larger amounts of wind and solar power from remote locations to power centers. Only thing is those energy sources are low capacity factor, unreliable due to the vagaries of weather, and intermittent; so, we will be building a transmission network to accomodate the full output of a wind or solar source but will run most of the time at fractional capacity and about 40% of the time with no power flow at all. The argument that we could then transfer power from nukes and fossil facilities across the country as well loses some effectiveness when one considers the losses in long distance transmission.
There has to be some very careful planning and design as linking a nationwide grid makes possible a nationwide upset.