Building Merchant Transmission
- January 7, 2014
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By Mark Lawlor
The United States possesses some of the best renewable energy resources in the world, but it also faces a serious challenge: There is a lack of transmission capacity to deliver that energy to market. Clean Line Energy Partners, an independent developer of long-haul transmission lines, will deliver thousands of megawatts of renewable power from the windiest areas of the United States to communities and cities with a high demand for clean, reliable energy and that lack access to low-cost, clean energy resources. Insufficient transmission in the United States continues to limit consumers’ access to cost-effective wind energy and the economic benefits that accompany new wind farms. The existing transmission system was created primarily as a result of local utility planning to connect population centers with nearby fossil fuel power plants. It is insufficient to meet the demands of our new energy economy. We need long-haul transmission lines to move America’s vast renewable energy resources to market. At Clean Line, we are developing several long-distance transmission lines to deliver power from renewable energy resources to load centers.
One of our projects, the Grain Belt Express Clean Line high-voltage direct-current transmission line, begins in western Kansas and extends to the border of Illinois and Indiana with an intermediate interconnection in Missouri. This 750-mile line will deliver up to 3,500 megawatts of cost-competitive wind power to states within the service regions of the Midcontinent Independent System Operator and the PJM Interconnection regional transmission organization and that have a high demand for clean, reliable energy. The transmission line will deliver the clean energy via direct current, which provides the most efficient and cost-effective way to move large amounts of power over long distances because HVDC has lower electricity losses and a smaller footprint than comparable alternating-current lines.
The benefits of a project like the Grain Belt Express are not limited to consumers with access to low-cost clean energy delivered by the project. Construction of the $2 billion transmission line and $7 billion of investments in new wind farms will deliver significant economic benefits. It is estimated that the project will create more than 5,000 construction jobs to build the transmission line and wind farms and more than 500 permanent jobs to maintain them. The HVDC transmission line will create employment opportunities in many sectors, including construction, hospitality, and the manufacturing of wind turbine and transmission components.
Clean Line is making the extra effort to source materials and labor from qualified local businesses. For example, we are contracting with local manufacturers that make the components involved in building transmission lines. Clean Line has agreements with companies like Southwire, General Cable, ABB and Pelco Structural to supply components for projects in the states where our lines will be constructed. Additionally, we are identifying and coordinating with local companies that can supply concrete and aggregate or that provide services such as road and right of way maintenance, surveying and engineering.
As with any major infrastructure project, the economic activity associated with construction brings welcome increases in income and spending to rural communities. As construction workers spend time in local areas, they spend money at hotels, restaurants and gas stations.
Other benefits are more direct. In many of our project states, property taxes collected on transmission lines go to local taxing districts such as hospitals, schools, emergency services and county governments. Because transmission lines remain in operation for several decades, these taxes provide long-term local benefits. In Kansas, where state law provides a 10-year property tax abatement on new transmission lines, Grain Belt Express has offered each county that will host the line a construction mitigation payment of $7,500 per mile to cover expenses the county might incur during construction.
Clean Line will also ensure that roads will be maintained or upgraded during construction. Roads will be left in either the same condition or better after construction.
Clean Line has also developed compensation terms for transmission easements based on landowner input. In addition to the payment for the easement area equal to 100 percent of the fair market value of the acreage, Grain Belt Express is offering landowners the choice of annual payments for each structure on their properties or a larger one-time structure payment up front. This approach has been well received by landowners in Kansas.
Communication and collaboration at the local level is essential, and Clean Line continues to spend a great deal of time and resources to build relationships and maintain an open dialogue. We look forward to working with communities for many years to come as we advance our projects and help to build the infrastructure necessary to support the wind-rich energy mix of the future.
Mark Lawlor is Clean Line Energy Partners director of development.