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Researched by Industrial Info Resources (Sugar Land, Texas)--In the past decade, old power transmission facilities in the U.S. have been replaced or upgraded at an unprecedented pace of about $15 billion to $20 billion per year. But replacing more aging transmission systems will cost nearly $60 billion in the next five years, the head of an industry group told a Senate Committee on Thursday.
Industrial Info is tracking nearly $64 billion in active U.S. transmission and distribution projects, including about $28 billion worth that have a medium or high probability of moving forward as planned.
Click on the image at right for a graph showing U.S. transmission and distribution projects by market region.
Speaking to the Senate Committee on Energy and Natural Resources, James Hoecker, executive director of the transmission trade association WIRES, outlined some of the challenges and opportunities that confront the industry.
"The level of transmission investment in recent years essentially made up for a quarter century of underinvestment, replaced aging facilities (some nearly a century old), and addressed short-term reliability issues," according to Hoecker's testimony. "Industry and policy makers should not rest easy, however. Continued investment is not optional if we are to meet challenges of an electrifying economy, install modern digital technologies, deploy and serve more distributed resources, enhance regional and interregional energy markets, lower electricity prices for consumers (now a declining share of the cost of living virtually everywhere), and strengthen the grid against physical, cyber, and natural disruptions."
Hoecker said many systems still operate with old and inefficient technologies "that invite reliability problems and poor transfer capabilities. Consequently, consumers still pay $4 billion in congestion costs each year in organized markets alone, even though congestion costs on the grid have been halved."
Many transmission systems were designed and built from the late 1940s to the 1970s, and have reached or exceeded their useful lives, he continued.
U.S. transmission and distribution projects being tracked by Industrial Info that have a medium or high probability of moving forward as planned range in value from $1 million to $1.9 billion. The Rocky Mountains region, which includes Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming, contains nearly $9.2 billion in high- and medium-probability projects.
One of the medium-probability projects is the planned $918 million, 500-kilovolt Gateway South Transmission Line, which would run more than 400 miles from south central Wyoming near Medicine Bow to a substation near Mona, Utah. The joint venture project by Rocky Mountain Power (Salt Lake City, Utah) (part of PacifiCorp -- a Berkshire Hathaway company) and Idaho Power Company (Boise, Idaho) would kick off construction in mid-2020, with completion in early 2026. For more information on the Aeolus Substation-to-Clover Substation segment, see Industrial Info's project report.
Hoecker added that while the electric power industry faces the prospect of flat demand as a result of photovoltaic solar growth and energy efficiency, a much brighter scenario involving "a more electrified economy" has emerged. He pointed to a 2017 paper by the economic consultancy The Brattle Group (Cambridge, Massachusetts), which projects a doubling of electricity demand by 2050 if transportation and heating were to become largely electric in an effort to cut greenhouse gas emissions.
"Growing demand for electric vehicles, the declining cost of renewable generation, a potential imperative to reduce carbon in the atmosphere, improvements in battery technology, and other developments already call into question current supply and demand assumptions," Hoecker said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Industrial Info is tracking nearly $64 billion in active U.S. transmission and distribution projects, including about $28 billion worth that have a medium or high probability of moving forward as planned.
Speaking to the Senate Committee on Energy and Natural Resources, James Hoecker, executive director of the transmission trade association WIRES, outlined some of the challenges and opportunities that confront the industry.
"The level of transmission investment in recent years essentially made up for a quarter century of underinvestment, replaced aging facilities (some nearly a century old), and addressed short-term reliability issues," according to Hoecker's testimony. "Industry and policy makers should not rest easy, however. Continued investment is not optional if we are to meet challenges of an electrifying economy, install modern digital technologies, deploy and serve more distributed resources, enhance regional and interregional energy markets, lower electricity prices for consumers (now a declining share of the cost of living virtually everywhere), and strengthen the grid against physical, cyber, and natural disruptions."
Hoecker said many systems still operate with old and inefficient technologies "that invite reliability problems and poor transfer capabilities. Consequently, consumers still pay $4 billion in congestion costs each year in organized markets alone, even though congestion costs on the grid have been halved."
Many transmission systems were designed and built from the late 1940s to the 1970s, and have reached or exceeded their useful lives, he continued.
U.S. transmission and distribution projects being tracked by Industrial Info that have a medium or high probability of moving forward as planned range in value from $1 million to $1.9 billion. The Rocky Mountains region, which includes Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming, contains nearly $9.2 billion in high- and medium-probability projects.
One of the medium-probability projects is the planned $918 million, 500-kilovolt Gateway South Transmission Line, which would run more than 400 miles from south central Wyoming near Medicine Bow to a substation near Mona, Utah. The joint venture project by Rocky Mountain Power (Salt Lake City, Utah) (part of PacifiCorp -- a Berkshire Hathaway company) and Idaho Power Company (Boise, Idaho) would kick off construction in mid-2020, with completion in early 2026. For more information on the Aeolus Substation-to-Clover Substation segment, see Industrial Info's project report.
Hoecker added that while the electric power industry faces the prospect of flat demand as a result of photovoltaic solar growth and energy efficiency, a much brighter scenario involving "a more electrified economy" has emerged. He pointed to a 2017 paper by the economic consultancy The Brattle Group (Cambridge, Massachusetts), which projects a doubling of electricity demand by 2050 if transportation and heating were to become largely electric in an effort to cut greenhouse gas emissions.
"Growing demand for electric vehicles, the declining cost of renewable generation, a potential imperative to reduce carbon in the atmosphere, improvements in battery technology, and other developments already call into question current supply and demand assumptions," Hoecker said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
