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Released January 18, 2016 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The North American transmission buildout remains alive and well, with more than 400 projects valued at over $54 billion scheduled to kick off construction in the next five years. Within North America, the U.S. is the leading national market, and within the U.S., no region expects to see more project activity than the Rocky Mountains market, with over $18 billion of active projects under development.
Other areas with significant transmission capital projects under development include the Great Lakes, Midwest, Northeast and Southwest.
Click on the icons at right to see bar charts of top-line planned transmission project spending and a breakdown of how much spending is scheduled to take place in which markets.
Industrial Info's power experts will participate in the 2016 Industrial Market Outlook & Networking Event in Houston, January 19, where they will discuss current trends in project spending and development activity. The event, which runs from 4-8 p.m., is complimentary but advance registration is required. Register today here.
There are 14 active transmission projects valued at $1 billion or more that are under development across North America. The state of Wyoming and the province of Quebec each are home to two, billion-dollar-plus projects, while other large projects are scheduled to be built in New Mexico, Maine, Newfoundland, Idaho, Maryland, New Jersey, Virginia, Manitoba, Missouri and Texas.
The next three years are expected to be very active: more than $14 billion of projects are scheduled to begin construction annually in 2016, 2017 and 2018. Industrial Info does not expect all of these projects to begin turning dirt according to their current schedules. Transmission projects are particularly vulnerable to delay and cancellation because they cross the boundaries of so many property owners, any of whom could decide to oppose a particular project. Multi-state projects require the support of each state through which the line passes as well as up to several federal agencies.
One example of the quagmire that multi-state jurisdiction can be is Clean Line Energy Partners' (Houston, Texas) Grain Belt Express interstate transmission project, a 775-mile, high-voltage, direct-current (HVDC) transmission project that would bring up to 4,000 megawatts (MW) of wind-derived energy from western Kansas to Missouri, Illinois, Indiana and beyond. The $2 billion project was supported by regulators in Kansas and Indiana, but Missouri utility regulators nixed it last summer. Clean Line Energy Partners said it remains committed to the project. For more on the Grain Belt Express project, see July 13, 2015, article - Grain Belt Express Transmission Project Blocked by Missouri Regulators. Industrial Info is tracking 28 North American transmission projects valued at $10.9 billion that have been cancelled or placed on hold. These projects were scheduled to begin construction between 2013 and 2015.
"Siting issues make transmission projects especially difficult and risky," said Britt Burt, Industrial Info's vice president of research for the global Power Industry. "First, there are a lot of different reviews a project must pass through. Then, there is the people part: People may love wind turbines and solar projects, but many have no love for the transmission lines necessary to being the renewable power from remote areas, where it is generated, to the cities and towns where it will be used."
That makes stakeholder outreach particularly critical. It can be time-consuming and expensive, but the alternative is stalled or cancelled projects. The comment of one utility-company official to Industrial Info shows the challenge of building transmission today: "It took us 16 years to get a particular transmission line built--14 years of stakeholder outreach and litigation, and two years for the actual construction. Our biggest challenge wasn't construction." For more on the importance of stakeholder outreach, see August 2, 2012, article - Huge Western Transmission Build-out Turns on Winning Friends and Influencing People Locally.
Not all planned transmission projects are tied to renewable generation, though those that are also face the permitting and financing hurdles of getting the large and often expensive projects getting built. Many of the transmission projects under development are to increase reliability or replace lines that are approaching the end of their useful lives. Environmental regulations are causing many older, less-efficient generators to close, and building replacement generation may require extending some lines or building new ones. Reliability organizations like PJM and MISO have approved dozens of transmission projects for the purpose of enhanced grid reliability.
And while transmission project developers have a big book of business now, some states are looking into whether changes at the distribution level could reduce the need for transmission lines. California, for one, is moving aggressively to investigate a welter of changes at the distribution level that could reduce the need for future transmission lines. The state and its shareholder-owned electric utilities are investigating the degree to which distributed generation like community solar gardens and rooftop solar, as well as electric storage, smart grid technology, new pricing options and expanded efficiency programs could shrink the need for new transmission lines. For more on that, see November 20, 2015, article - SCE Aims to Turn Electric Grid from One-Way Street to Two-Way Electricity Freeway.
Still, despite the challenges of building transmission lines, there are plenty of developers with plenty of proposed projects. A few years ago, the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) issued Order 1000 to expedite and standardize interstate transmission planning. And the nation's transmission policy is being shaped by the potential for incentive compensation above traditional rate-of-return earnings, making some transmission projects even more attractive.
"For too long, transmission has been the quiet issue that drew little attention," Industrial Info's Burt said. "The lines were built decades ago and they have done a remarkable job keeping the lights on as the industry has gone through waves of changes at the generation and distribution levels. But now the chickens are coming home to roost. Energy policy and environmental policy are imposing new demands on an aging network. Significant new investment in transmission is needed. Our project database shows there are many firms willing to step up. The question is, will they be supported, or thwarted, by regulators and intervenors?"
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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/.
Other areas with significant transmission capital projects under development include the Great Lakes, Midwest, Northeast and Southwest.
Click on the icons at right to see bar charts of top-line planned transmission project spending and a breakdown of how much spending is scheduled to take place in which markets.Industrial Info's power experts will participate in the 2016 Industrial Market Outlook & Networking Event in Houston, January 19, where they will discuss current trends in project spending and development activity. The event, which runs from 4-8 p.m., is complimentary but advance registration is required. Register today here.
There are 14 active transmission projects valued at $1 billion or more that are under development across North America. The state of Wyoming and the province of Quebec each are home to two, billion-dollar-plus projects, while other large projects are scheduled to be built in New Mexico, Maine, Newfoundland, Idaho, Maryland, New Jersey, Virginia, Manitoba, Missouri and Texas.
The next three years are expected to be very active: more than $14 billion of projects are scheduled to begin construction annually in 2016, 2017 and 2018. Industrial Info does not expect all of these projects to begin turning dirt according to their current schedules. Transmission projects are particularly vulnerable to delay and cancellation because they cross the boundaries of so many property owners, any of whom could decide to oppose a particular project. Multi-state projects require the support of each state through which the line passes as well as up to several federal agencies.One example of the quagmire that multi-state jurisdiction can be is Clean Line Energy Partners' (Houston, Texas) Grain Belt Express interstate transmission project, a 775-mile, high-voltage, direct-current (HVDC) transmission project that would bring up to 4,000 megawatts (MW) of wind-derived energy from western Kansas to Missouri, Illinois, Indiana and beyond. The $2 billion project was supported by regulators in Kansas and Indiana, but Missouri utility regulators nixed it last summer. Clean Line Energy Partners said it remains committed to the project. For more on the Grain Belt Express project, see July 13, 2015, article - Grain Belt Express Transmission Project Blocked by Missouri Regulators. Industrial Info is tracking 28 North American transmission projects valued at $10.9 billion that have been cancelled or placed on hold. These projects were scheduled to begin construction between 2013 and 2015.
"Siting issues make transmission projects especially difficult and risky," said Britt Burt, Industrial Info's vice president of research for the global Power Industry. "First, there are a lot of different reviews a project must pass through. Then, there is the people part: People may love wind turbines and solar projects, but many have no love for the transmission lines necessary to being the renewable power from remote areas, where it is generated, to the cities and towns where it will be used."
That makes stakeholder outreach particularly critical. It can be time-consuming and expensive, but the alternative is stalled or cancelled projects. The comment of one utility-company official to Industrial Info shows the challenge of building transmission today: "It took us 16 years to get a particular transmission line built--14 years of stakeholder outreach and litigation, and two years for the actual construction. Our biggest challenge wasn't construction." For more on the importance of stakeholder outreach, see August 2, 2012, article - Huge Western Transmission Build-out Turns on Winning Friends and Influencing People Locally.
Not all planned transmission projects are tied to renewable generation, though those that are also face the permitting and financing hurdles of getting the large and often expensive projects getting built. Many of the transmission projects under development are to increase reliability or replace lines that are approaching the end of their useful lives. Environmental regulations are causing many older, less-efficient generators to close, and building replacement generation may require extending some lines or building new ones. Reliability organizations like PJM and MISO have approved dozens of transmission projects for the purpose of enhanced grid reliability.
And while transmission project developers have a big book of business now, some states are looking into whether changes at the distribution level could reduce the need for transmission lines. California, for one, is moving aggressively to investigate a welter of changes at the distribution level that could reduce the need for future transmission lines. The state and its shareholder-owned electric utilities are investigating the degree to which distributed generation like community solar gardens and rooftop solar, as well as electric storage, smart grid technology, new pricing options and expanded efficiency programs could shrink the need for new transmission lines. For more on that, see November 20, 2015, article - SCE Aims to Turn Electric Grid from One-Way Street to Two-Way Electricity Freeway.
Still, despite the challenges of building transmission lines, there are plenty of developers with plenty of proposed projects. A few years ago, the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) issued Order 1000 to expedite and standardize interstate transmission planning. And the nation's transmission policy is being shaped by the potential for incentive compensation above traditional rate-of-return earnings, making some transmission projects even more attractive.
"For too long, transmission has been the quiet issue that drew little attention," Industrial Info's Burt said. "The lines were built decades ago and they have done a remarkable job keeping the lights on as the industry has gone through waves of changes at the generation and distribution levels. But now the chickens are coming home to roost. Energy policy and environmental policy are imposing new demands on an aging network. Significant new investment in transmission is needed. Our project database shows there are many firms willing to step up. The question is, will they be supported, or thwarted, by regulators and intervenors?"
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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/.
