I’m just learning all this but today my husband and I were driving through West Virginia and we saw a lot of huge windmills, and also mining. And other things going on, on the land, which we weren’t even sure what they were doing.
As I said, the quote comes from their website. However, FERC regulates the power rates flowing over the lines after the lines are in op. As the quote indicates the state regulates the construction recovery $..not FERC.
"FERC does not have the authority to regulate transmission line construction. This authority rests with the individual States or State Public Utility Commissions .However, FERC can provide financial incentives to energy companies to propose and build transmission lines."
From FERC own website.
And even if state advocates may be overworked and under resourced...I'm sure a $4 trillion expenditure would recieve some oversight & questioning, don't you? And as far as them catching everything, I never said that...but they certianly can impead and obstruct frequently enough to be a hinderance. Also, its not if they are skilled or not in rate filings, its a matter of if they intervene. They can, and do intervene...they can and do ask questions, and they can and do look at the supposed benefits of capex that the utility is trying to rate base...as its been my experience. Also, the Advocates don't always work at the judicial rate setting level, they can be quite effective negotiating behind the scenes...ie how the real world works.
Yes, I understand rate making, but the reason that rates are approved of (by gov regulators), is because of the benefit...not because the utility wants to spend more capex and get more return. And as often the case, not 100% of rates are approved of...they're often disagreements by regulators vs utility on what/how the capex was spent..ie, was it needed, was it too much, was it bid fairly,etc,etc. So benefit analysis does show up...perhaps behind the scenes, but its there. Also, on any transmission expansion, the reliability of the grid is looked at very closely, so there are benefits to the trans/distribution ops of the utility..again benefits. Also, grid expansion just for load growth is a benefit....we don't want rolling blackouts, nor high demand brown outs, or less stable grid, do we??...yet another benefit. There's benefits all over this thing....some easy to quantify, most not..as they require predicting the future...always a hard thing....with interest rates, load growth and location, weather, national security, emp hardening/vulnerability, pop growth. Yes the article is just looking at the load growth & required design only using regional solar/wind gen because of the electrification of the entire CE transport, and that's a start...you gotta know the cost to contemplate if its worth it. And how do you know its worth it? You need to know the benefits.
Germany has the exact same problem. They have been trying to build high voltage (aka “High Speed” - that made me laugh) lines from the North Sea south to Bavaria and Baden-Würtemburg, but they can’t get the approvals to permit them because nobody wants gigantic masts running through their town. The southern part of Germany is a huge high value added industrial base that is basically totally screwed when the last nuke plants go offline.
Another aspect of the expansion needed, is all those solar panels on houses feeding into the grid. All those EV's backfeeding into the grid (under some proposals). These will work at what is called in the industry the distribution level (generally 69kv and lower). In fact the stuff running by your house is generally around 13kv, but I digress. My point is, the distribution level was not, is still not, designed for "back feeding" into the system. It was designed to deliver one way. It has been able to take minor back feeding ...say 3% of power (if that). That's ok, but under some of proposals...30% or more (at times of high demand) its not designed for. Nor is it easily modified for such power flows. Also, the back office accounting for such "back feeding" needs to be upgraded from current practice (ie. Net metering a'nt gonna work). Also such large #'s of relatively small power generators need to be tightly/quickly controlled by the local/regional utility so that voltage/frequency problems are kept to nominal levels. This again goes back to how the original grid design was for the economies of large centralized power plants.
The cost of all this transmission to ratepayers is way too low. If the transmission costs $1 trillion to build, then consumers would pay back $1T of principal over the project's useful life (usually 40 years). Consumers would also pay rate of return on the utility's investment, averaging 9-11% of the remaining balance annually. Consumers would also be on the hook to pay the project's operations and maintenance costs over its lifetime. Think of transmission rates like a home mortgage. You don't repay the exact amount you borrowed, you also pay interest (and taxes and insurance). If you compare what you borrowed with what you'll pay over 30 years, it's often triple the amount borrowed. Same with transmission. So, we're really talking at least $4 trillion, since utility interest rates are so much higher than home mortgage interest rates.
WSJ yesterday…experts say utilities can keep up with increased generation requirements but can’t expand the grid fast enough. One of those is true. California uses about 6500 Tbtu/year.. 2500 from the grid, 2000 from nat gas, and 2000 from liquid petroleum. Moving transportation and nat gas to the grid would require tripling current generation. CA has been connecting wind and solar as fast as they can with an unlimited budget for 15 years. The result is 30% renewables, gas and nuclear shut down and 25% imported coal and gas from other states. What is the plan for tripling generation?
Great article Robert. I really like your podcast too. There is a shuttered coal fired electric plant near me. I've been reading about plans to demolish it and thinking; what a waste. There must be some way to repurpose it. As your article points out, the steam turbine, the generators, the cooling infrastructure and the transmission grid are already there. I work in highway design and construction, so I know how difficult getting right of way and permits can be and how long it can take. I've been thinking about reaching out to the local legislators to see if there is any interest in working with a modular nuclear or deep geothermal company to see what can be done to bring this plant back online. Anyone have any suggestions for how to approach this?
Nice piece Robert. Southern California Edison “unit cost guide” for line construction lists a base cost of $1.2. Million per mile for 230 kV tower line with adders for terrain. Much more for 500kV and yet more for DC. A little quick math will tell you that you aren’t going to build 480,000 miles of new transmission on the puny inflation reduction act. SCE recently spent $4 billion undergrounding 8 miles of 500 kV line in Chino Hills. $500 million per mile. Now everybody wants all lines to be underground so let’s see. $500,000,000 x 480,000 = ???
Robert and environMENTAL... this is 2020 but I would guess things are worse now. The contract they talk about sounds similar to those of the solar companies.
Something I never see reported, but maybe somebody here can tell me -- how much loss is there on these long-distance transmission lines? For example, they are talking about putting in lines to move wind energy from here in New Mexico over to California. Wouldn't a fairly sizable percentage of that energy be lost?
It occurs to us that even if the state level eminent domain legislation and other legal actions didn’t undo many of the transmission plans you note, environmentalists would have likely done so. And will going forward.
We can’t see a scenario where, for example, Center for Biological Diversity wouldn’t oppose transmissions lines impacting Tiehm’s Buckwheat in Nevada (where they are opposing a proposed lithium mine that just received a DOE conditional loan guarantee, with USF&WS service riding shotgun!). We can give dozens of similar examples.
This gives us an interesting idea for a possible collaboration. Has to do with your Renewables Rejection Database.
I don't think any of these Analysts, "influencers". P.hd.'s etc who write these reports, have ever got out from behind their respective "desktops" and ventured into the real world!! Infrastructure need permits, and you catalog the plethora of issues out there that hold back development.
I’m just learning all this but today my husband and I were driving through West Virginia and we saw a lot of huge windmills, and also mining. And other things going on, on the land, which we weren’t even sure what they were doing.
As I said, the quote comes from their website. However, FERC regulates the power rates flowing over the lines after the lines are in op. As the quote indicates the state regulates the construction recovery $..not FERC.
"FERC does not have the authority to regulate transmission line construction. This authority rests with the individual States or State Public Utility Commissions .However, FERC can provide financial incentives to energy companies to propose and build transmission lines."
From FERC own website.
And even if state advocates may be overworked and under resourced...I'm sure a $4 trillion expenditure would recieve some oversight & questioning, don't you? And as far as them catching everything, I never said that...but they certianly can impead and obstruct frequently enough to be a hinderance. Also, its not if they are skilled or not in rate filings, its a matter of if they intervene. They can, and do intervene...they can and do ask questions, and they can and do look at the supposed benefits of capex that the utility is trying to rate base...as its been my experience. Also, the Advocates don't always work at the judicial rate setting level, they can be quite effective negotiating behind the scenes...ie how the real world works.
Yes, I understand rate making, but the reason that rates are approved of (by gov regulators), is because of the benefit...not because the utility wants to spend more capex and get more return. And as often the case, not 100% of rates are approved of...they're often disagreements by regulators vs utility on what/how the capex was spent..ie, was it needed, was it too much, was it bid fairly,etc,etc. So benefit analysis does show up...perhaps behind the scenes, but its there. Also, on any transmission expansion, the reliability of the grid is looked at very closely, so there are benefits to the trans/distribution ops of the utility..again benefits. Also, grid expansion just for load growth is a benefit....we don't want rolling blackouts, nor high demand brown outs, or less stable grid, do we??...yet another benefit. There's benefits all over this thing....some easy to quantify, most not..as they require predicting the future...always a hard thing....with interest rates, load growth and location, weather, national security, emp hardening/vulnerability, pop growth. Yes the article is just looking at the load growth & required design only using regional solar/wind gen because of the electrification of the entire CE transport, and that's a start...you gotta know the cost to contemplate if its worth it. And how do you know its worth it? You need to know the benefits.
Germany has the exact same problem. They have been trying to build high voltage (aka “High Speed” - that made me laugh) lines from the North Sea south to Bavaria and Baden-Würtemburg, but they can’t get the approvals to permit them because nobody wants gigantic masts running through their town. The southern part of Germany is a huge high value added industrial base that is basically totally screwed when the last nuke plants go offline.
Another aspect of the expansion needed, is all those solar panels on houses feeding into the grid. All those EV's backfeeding into the grid (under some proposals). These will work at what is called in the industry the distribution level (generally 69kv and lower). In fact the stuff running by your house is generally around 13kv, but I digress. My point is, the distribution level was not, is still not, designed for "back feeding" into the system. It was designed to deliver one way. It has been able to take minor back feeding ...say 3% of power (if that). That's ok, but under some of proposals...30% or more (at times of high demand) its not designed for. Nor is it easily modified for such power flows. Also, the back office accounting for such "back feeding" needs to be upgraded from current practice (ie. Net metering a'nt gonna work). Also such large #'s of relatively small power generators need to be tightly/quickly controlled by the local/regional utility so that voltage/frequency problems are kept to nominal levels. This again goes back to how the original grid design was for the economies of large centralized power plants.
The cost of all this transmission to ratepayers is way too low. If the transmission costs $1 trillion to build, then consumers would pay back $1T of principal over the project's useful life (usually 40 years). Consumers would also pay rate of return on the utility's investment, averaging 9-11% of the remaining balance annually. Consumers would also be on the hook to pay the project's operations and maintenance costs over its lifetime. Think of transmission rates like a home mortgage. You don't repay the exact amount you borrowed, you also pay interest (and taxes and insurance). If you compare what you borrowed with what you'll pay over 30 years, it's often triple the amount borrowed. Same with transmission. So, we're really talking at least $4 trillion, since utility interest rates are so much higher than home mortgage interest rates.
WSJ yesterday…experts say utilities can keep up with increased generation requirements but can’t expand the grid fast enough. One of those is true. California uses about 6500 Tbtu/year.. 2500 from the grid, 2000 from nat gas, and 2000 from liquid petroleum. Moving transportation and nat gas to the grid would require tripling current generation. CA has been connecting wind and solar as fast as they can with an unlimited budget for 15 years. The result is 30% renewables, gas and nuclear shut down and 25% imported coal and gas from other states. What is the plan for tripling generation?
Great article Robert. I really like your podcast too. There is a shuttered coal fired electric plant near me. I've been reading about plans to demolish it and thinking; what a waste. There must be some way to repurpose it. As your article points out, the steam turbine, the generators, the cooling infrastructure and the transmission grid are already there. I work in highway design and construction, so I know how difficult getting right of way and permits can be and how long it can take. I've been thinking about reaching out to the local legislators to see if there is any interest in working with a modular nuclear or deep geothermal company to see what can be done to bring this plant back online. Anyone have any suggestions for how to approach this?
Robert Bryce has been really prescient, lately.
Nice piece Robert. Southern California Edison “unit cost guide” for line construction lists a base cost of $1.2. Million per mile for 230 kV tower line with adders for terrain. Much more for 500kV and yet more for DC. A little quick math will tell you that you aren’t going to build 480,000 miles of new transmission on the puny inflation reduction act. SCE recently spent $4 billion undergrounding 8 miles of 500 kV line in Chino Hills. $500 million per mile. Now everybody wants all lines to be underground so let’s see. $500,000,000 x 480,000 = ???
Robert and environMENTAL... this is 2020 but I would guess things are worse now. The contract they talk about sounds similar to those of the solar companies.
https://andersoncountyreview.blogspot.com/2020/01/allen-county-kansas-learns-wind-farm.html?m=1
Something I never see reported, but maybe somebody here can tell me -- how much loss is there on these long-distance transmission lines? For example, they are talking about putting in lines to move wind energy from here in New Mexico over to California. Wouldn't a fairly sizable percentage of that energy be lost?
Another outstanding piece as usual, Robert.
It occurs to us that even if the state level eminent domain legislation and other legal actions didn’t undo many of the transmission plans you note, environmentalists would have likely done so. And will going forward.
We can’t see a scenario where, for example, Center for Biological Diversity wouldn’t oppose transmissions lines impacting Tiehm’s Buckwheat in Nevada (where they are opposing a proposed lithium mine that just received a DOE conditional loan guarantee, with USF&WS service riding shotgun!). We can give dozens of similar examples.
This gives us an interesting idea for a possible collaboration. Has to do with your Renewables Rejection Database.
Keep up the great work!!
Great article!
I don't think any of these Analysts, "influencers". P.hd.'s etc who write these reports, have ever got out from behind their respective "desktops" and ventured into the real world!! Infrastructure need permits, and you catalog the plethora of issues out there that hold back development.
Robert, you got a shout out from "Stop These Things" (a page I recommend and follow. I'd post it here bit I can't seem to paste a copy 🙄