According to a Dec. 17 presentation, $24bn in transmission investment is forecast for 2015, with $14.2bn of that under construction
While there were fewer electric transmission projects completed in 2014 than were expected at the beginning of the year, 2014 is “still going to be one of the highest years for transmission capital expenditures,” considering the high number of large projects under construction at this time, Kent Knutson, director of Hub Services for PennWell, said on Dec. 17.
Speaking during TransmissionHub’s Quarterly Market Update, sponsored by AZZ, Knutson noted that $12.5bn of transmission projects were energized in 2013, adding, “$10.8bn is what we’re looking at in 2014, so it’s kind of a set back from the growth that we had, but it’s really just a reflection of projects that are being pushed in to next year, and it’s not reflective of the investments that occurred in 2014, which is pretty substantial.”
TransmissionHub is tracking $166.1bn in electric transmission investment from, involving almost 48,000 miles of lines – and of that, $106bn is planned for the four-year period of 2015-2018 alone, he said.
Of the overall total, $54.4bn involves HVDC projects, and $23.5bn involves underground and underwater projects, he said.
According to his presentation, $24bn in transmission investment is forecast for 2015, with $14.2bn of that under construction; $19.2bn is forecast for 2016, with $0.4bn under construction; $27.6bn is forecast for 2017, with $2.6bn under construction; and $36.6bn is forecast for 2018, with none of that under construction at this time.
Also, single circuit aboveground projects account for 53.5% of future investment, or 30,682 miles; HVDC single circuit projects account for 19.6%, or 8,278 miles; double circuit aboveground projects account for 11.2%, or 6,936 miles; underground/underwater HVDC projects account for 9.1%, or 1,976 miles; underground/underwater AC cable projects account for 4.1%, or 1,210 miles; and HVDC double circuit projects account for 2.5%, or 1,028 miles.
In 2015, “we expect 189 projects to be energized and 53 [of those] are greater than $100m,” Knutson said.
The drivers behind that investment include aging infrastructure, state renewable portfolio standards (RPSs), and coal plant retirements, with between 60 GW and 110 GW of coal being replaced mostly with gas by 2025, according to his presentation.
Knutson also discussed challenges to transmission development, including “the flat to at times even declining load growth;” diminishing incentives like lower return on equity; FERC Order 1000 challenges including non-incumbent versus incumbent rights; and issues related to the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan.
Of the Clean Power Plan, he noted that already there have been 1.5 million comments submitted to the EPA, with nearly 600 additional comments submitted as of Dec. 16 during the supplemental comment period.
Discussing electric load growth, Knutson noted that year-to-date through last September, “load is at 1.4%, so it’s still very anemic, but not like the .7% or 1% that is forecast and that little bit of growth makes a big difference.”
As noted in his presentation, PJM Interconnection’s peak demand and energy forecasts have been revised down four years in a row, but the polar vortex earlier this year resulted in an all-time winter peak.
Knutson also discussed various transmission projects that were completed this year, including:
- BC Hydro and Power Authority’s 214-mile, 287-kV, $736m Northwest Transmission Line in British Columbia
- NV Energy’s 235-mile, 500-kV, $552m ON Line Transmission Project in Nevada
- Public Service Electric and Gas’ (PSE&G) 55-mile, 230-kV, $390m underground and aboveground North Central Reliability Project in New Jersey
- Minnkota Power Coop.’s 250-mile, 345-kV, $353m Center to Grand Forks project in North Dakota
- Salt River Project’s 100-mile, 500-kV, $300m Pinal West to Pinal Central to Browning project in Arizona
- Southwestern Public Service’s (SPS) 202-mile, 345-kV, $205m Tuco to Texas/Oklahoma Interconnect project in Texas and Oklahoma
- Commonwealth Edison’s (ComEd) six-mile, 345-kV, $121m Burnham–Taylor project in Illinois
Furthermore, he noted that various projects are scheduled online next year and are under construction as of this month, including:
- Southern California Edison’s (SCE) 250-mile, 500-kV, $1.7bn Tehachapi Segments 4-11 in California
- AltaLink Management Ltd.’s 215-mile, 500-kV HVDC, nearly $1.7bn Western Alberta Transmission Line in Alberta
- Central Maine Power’s (CMP) 440-mile, 345-kV, nearly $1.5bn Maine Power Reliability Program in Maine
- PSE&G’s 145-mile, 500-kV, $1.4bn Susquehanna–Roseland project, which travels through Pennsylvania and New Jersey
- Xcel Energy’s (NYSE:XEL) 213-mile, 345-kV, $750m Fargo–St. Cloud project in North Dakota and Minnesota
- Great River Energy’s 250-mile, 345-kV, $735m Brookings County to Hampton project in South Dakota and Minnesota
- BC Hydro and Power Authority’s 153-mile, 500-kV, $725m Interior to Lower Mainland (ILM) Project in British Columbia
Knutson also highlighted several New England connector projects, such as the 300-mile, 320-kV, $2bn Maine Green Line proposed by National Grid USA and Anbaric; the 333-mile, 320-kV, $2.2bn Champlain Hudson Power Express by Transmission Developers Inc.; the 68-mile, 200-kV, $770m SeaLink project by New Hampshire Transmission; the 240-mile, 320-kV, $2bn Northeast Energy Link by National Grid USA and Emera; and the 321-mile, 200-kV, $1.6bn Maritime Transmission Link by Nalcor Energy.
Knutson noted that the Northeast, with its high electricity costs, has shifted from what once was more oil-based and coal-based into natural gas power, which can be volatile during high demand periods. Since 2000, gas has increased from 15% to more than 46% of the fuel mix. The region is looking to transport more hydropower from Canada, as well as to get more wind energy projects built in such states as Maine, he said.
He also noted Duke-American Transmission Company’s (DATC) efforts on what has been called “the 21st Century’s Hoover Dam,” which involves a 525-mile, 500-kV HVDC, $2.6bn line from Wyoming to Utah that will link the 2,100 MW, $4bn Pathfinder wind project with the $1.5bn Magnum Energy and Dresser-Rand compressed air storage project.
The driver behind this effort is the market in the Los Angeles area, Knutson said.
Among projects on the move, Knutson noted, for instance, that the draft EIS was recently released for Clean Line Energy Partners’ Plains & Eastern Clean Line project and that TDI New England filed an application with Vermont state regulators for the New England Clean Power Link.
PSE&G is a subsidiary of Public Service Enterprise Group (NYSE:PEG). SPS is a subsidiary of Xcel Energy. ComEd is a unit of Exelon(NYSE:EXC). SCE’s parent company is Edison International (NYSE:EIX). CMP is a subsidiary of Iberdrola USA, which is a subsidiary of Iberdrola S.A. National Grid is a subsidiary of National Grid plc. New Hampshire Transmission is a NextEra Energy (NYSE:NEE) company. DATC is equally owned by Duke Energy (NYSE:DUK) and American Transmission Co.