An estimated $163bn worth of transmission investment is underway in the United States and Canada, with $13.5bn in 2013 alone, according to TransmissionHub data.
For 2014, there are “$25.6bn on the books,” Kent Knutson director of Hub Services for PennWell, added during the Dec. 3 TransmissionHub Quarterly Market Update webcast.
Some of those projects remain in permitting and planning stages, he said, adding that most of the construction involves 345-kV and 500-kV DC and AC lines. Most of the construction is set to occur in the West, including in the WECC region, and in Canada’s Alberta and British Columbia, as well as in the Northeast.
Despite low electric load growth forecast for the next several years, transmission development is being driven by the need to upgrade aging infrastructure, reliability concerns, plant retirements and the need to meet renewable portfolio standards in several states across the U.S., Knutson said.
He noted that FirstEnergy (NYSE:FE), for instance, recently announced that it plans to invest an additional $2.8bn over four years to expand its “Energizing the Future” transmission initiative.
The main focus of the initial construction effort will be the 69-kV transmission power lines and substations in the Ohio Edison, Cleveland Electric Illuminating, Toledo Edison and Penn Power areas, the company said on Nov. 12.
As part of the program, about 7,200 circuit miles of 69-kV and higher transmission lines will be evaluated and rebuilt, as needed, FirstEnergy added. Also, more than 170 substations will be inspected and upgraded, along with 70,000 transmission structures that will be evaluated and rebuilt, as needed.
Natural gas growth is also affecting transmission development, Knutson said, noting that while natural gas had been a volatile fuel for decades, it has come down to prices seen between 1990 and 2000, or in the $3 to $4 range. He added that natural gas “is forecast to only reach about $4 by 2020,” and the reason the forecast is becoming more predictable and less volatile has to do with the shale gas boom.
Another driver for transmission development involves renewable energy and state renewable portfolio standards, Knutson said.
Noting the extension of the production tax credit last year, he said that “a lot of wind energy projects that were on hold came back into play,” but the amount of completed wind energy projects is still going to be significantly lower than in the past.
On solar, Knutson said there are a lot of large-scale solar projects that are either under construction or in planning stages. In 2012, 1,502 MW of solar power came online and about 5,000 MW are expected this year.
Coal and nuclear plant retirements are also driving transmission efforts, he said, noting that just in 2012 and 2013, more than 10,000 MW per year have retired. “That’s going to have a significant effect on the market and transmission will be an important part of that,” he said.
The 2012 output from the coal plants that are scheduled to be taken offline represented about 245 million megawatt-hours, or 16% of all coal generation in the country, he said.
U.S./Canada projects completed and operating in 2013, include the:
- 111-mile, 500-kV, estimated $860m Devers to Colorado River project by Southern California Edison (SCE)
- 8-mile, 345-kV undersea, estimated $850m Hudson Transmission Project by Hudson Transmission Partners
- 39-mile, 345-kV, estimated $675m Greater Springfield Reliability Project by Northeast Utilities (NYSE:NU)
- 192-mile, 345-kV, estimated $411m West Shackelford to Navarro-Sam Switch project by Lone Star Transmission
During the webcast, Carl Dombek, senior editor for TransmissionHub, highlighted several projects, including San Diego Gas & Electric’s (SDG&E) Sunrise Powerlink, which according to TransmissionHub data, is a 117-mile, 500-kV line designed to carry renewable energy from El Centro to San Diego, Calif. The project includes a 6.2-mile, 230-kV segment and a new 500-kV substation.
Dombek noted that the project was completed slightly ahead of schedule and slightly under its $1.9bn budget, despite a number of issues, including having to “be very mindful of [the] proximity to the nesting zones [of bald and golden eagles], which caused [the company] to have to adjust [its] construction schedule.”
Additionally, incidents involving equipment falling from a helicopter and rotor strikes during construction caused grounding of the helicopters for a period of time.
He also referenced California’s Tehachapi Renewable Transmission Project, which according to TransmissionHub, involves 250 miles of a combination of 500-kV and 220-kV lines and upgrades. It involves the development of three new substations and lines running from Pardee in the west, to Highwind in the north, and on to Mira Loma in the southwest.
Dombek noted that the project is intended to bring renewable energy from the Tehachapi mountains into the load pocket of the Los Angeles area.
California state regulators approved the project in 2009, including a stretch of 3.5 miles of line that went through an existing SCE-owned right-of-way through the city of Chino Hills, Calif.
Chino Hills citizens and the city itself, which has the sixth highest per capita income in the U.S., mounted “a fairly extensive legal fight once [SCE] put the first towers up along that right of way,” Dombek noted, adding that ultimately, the California Public Utilities Commission (CPUC) ordered that that portion of the project be placed underground.
SCE and CPUC remain in discussions over the kind of equipment that will be necessary to underground that portion, he said, adding, “[U]ntil that can get ironed out, [SCE] can only proceed in a limited fashion with things like property acquisition, ordering long lead time components and such.”
SCE has warned several times that undergrounding that portion of the project will probably delay the project past its projected in-service date, Dombek said, noting that those segments of the project will enter service in a staggered fashion so it will not delay the entire portion.
Another project highlighted during the webcast is the Gateway West project, which according to TransmissionHub, is being proposed jointly by Rocky Mountain Power and Idaho Power.
The project will stretch nearly 1,000 miles from the Windstar substation near Glenrock, Wyo., to the Hemingway substation near Melba, Idaho. The project will involve about 200 miles of 230-kV lines in Wyoming and another 800 miles of 500-kV lines in Wyoming and Idaho.
Dombek noted that a record of decision was recently issued for the project and it was unique in that it approved eight of the 10 segments of the line with the direction that the developers look at the alignment of two of the segments that basically parallel a river and goes through a culturally important site.
“It’s unique in that it was approved in segments, but the line itself is unique in that the segments that were approved can be constructed and can be energized – and will bring value – even without those two segments [if] in the worst case scenario they were not approved at all,” he said.
The developers are confident that the remaining segments will get approval in a way that will satisfy most of the concerned stakeholders, he said.
He also referenced the Cascade Crossing project, which was, according to TransmissionHub, a proposed 120-mile, 500-kV line that would have originated at Boardman and ended at Salem in Oregon, but the project was canceled last June.
The 2008 economic recession played a role in the project’s cancellation, Dombek said, noting that it caused the developers, including Portland General Electric (NYSE:POR), to revise the project. While demand for power eventually grew, it did not do so as quickly as expected. Also, the Bonneville Power Administration was able to identify additional capacity in its system, further reducing the need for the project.
Lone Star Transmission’s parent company is NextEra Energy (NYSE:NEE). SDG&E is a subsidiary of Sempra Energy (NYSE:SRE). SCE is a subsidiary of Edison International (NYSE:EIX). Rocky Mountain Power is a division of PacifiCorp, which is owned by MidAmerican Energy Holdings. Idaho Power is a subsidiary of IDACORP (NYSE:IDA). Hudson Transmission Partners is an affiliate of PowerBridge.