Clean Line Energy: Power players

To deliver cleaner and cheaper power to America, we need to move energy around. Coal is transported by the national rail network. Natural gas flows through 305,000 miles of intrastate and interstate pipelines. But electricity? While there are three regional interconnected grids, there is no national power grid in the US, so it’s hard to connect the supply of wind and solar generation to the demand centers where it’s needed.

Clean Line Energy Partners aims to fix that. A privately held company based in Houston, Clean Line is developing high-capacity, high-voltage transmission lines to deliver wind and solar power from the Great Plains and southwest to the cities that want clean energy. It’s a big and ambitious series of projects that will take years to complete, require the approval of hundreds of state and county regulators and cost at least $8 billion.

“If you look at the whole picture, it’s daunting,” says Mike Skelly, the president of Clean Line. “But if you break it down into each little task, it looks doable.”

“We have the potential to generate as much electricity annually from domestic renewable resources as the US consumes as a whole–several times over,” Skelly has written. “There is not lack of generation potential. The trick is getting power to market.”

America used to build big infrastructure projects–railroads, the Interstate Highway System, airports. Not so much anymore, unless you include the Internet, which didn’t have to pass through anyone’s backyard and spoil the viewshed.

Clean Line has designed four massive projects — the $1.7 billion Rock Island and $2 billion Grain Belt Express, which will deliver wind power from Iowa and Kansas to homes and businesses in and around Chicago, St. Louis and Indianapolis; the $2-billion Plains & Eastern, which will span Oklahoma, Arkansas and Tennessee, providing energy to the southeast; and $2.5 billion Centennial West, which will transport power from wind and solar resources in New Mexico and Arizona to southern California. They won’t be built and ready to go for at least five years.

I met recently with Clean Line co-founders Mike Skelly and Jimmy Glotfelty in Washington where, predictably, they’d come to meet with regulators. The two men knew what they were getting into when they started the company in 2009. Skelly, 50, had led Horizon Wind Energy, a successful wind power developer, and he ran for Congress in Texas as a Democrat. “I got the silver medal,” he quips. Glotfelty, 46, who directed the office of energy delivery and energy reliability at the Department of Energy during the George W. Bush administration, calls himself a Teddy Roosevelt Republican. “We should be good stewards of the land and protect what we can,” he says, while doing battle with critics of wind power at the National Review Online. You can think of Skell and Glotfelty as a bipartisan power couple (pun intended).

They’ll need all their political and diplomatic skills to get these transmission lines built. Siting and building power lines takes time, and each project requires approval from every state it touches. Just to win support for one project — the Plains & Eastern — the company has held 1,800 meetings in 30 counties in Oklahoma, Arkansas and Tennessee.

“We spend most of our time on regulatory processes,” Skelly (above)  says. “The way to get this done is to show folks at the national level, the state level and the local level why this is a good idea.”

Sometimes that means touting the benefits of jobs so, where possible, Clean Line is turning to local suppliers. It has promised to buy about 25 million feet of wire for the Plains & Eastern  line from General Cable, which has a plant in Malvern, AR, and it has an agreement to buy steel structures from Pelco Structural, a manufacturer in Claremore, OK.

If all the regulatory hurdles are cleared, Clean Line will negotiate transmission agreements with potential customers — either the utilities that deliver power or wind-farm developers who make it. For the economics of the project to work, wind power will have to be competitive with competing sources of power generation, particularly natural gas. Some advocates of renewable energy believe that cheap, abundant natural gas threatens the growth of wind and solar power.

“We actually like the gas-wind combination,” Glotfelty says.”You get a lot of flexibility with a gas turbine. And wind turbines need flexibility.” That’s because turbines need backup generation for times when the wind isn’t blowing. He says wind turbine costs continue to drop, “making it competitive with almost every other resource out there.” Typically, wind-power developers make long-term deals with utilities to sell power at a fixed cost, so wind is a good hedge against volatile fuel costs.

Clean Line’s investors include the Houston-based Zilkha family and ZBI Ventures, which is a unit of  Ziff Brothers Investments, the principal investment vehicle of the New York-based Ziff family. These are the definition of patient investors. But if they do enjoy a good payback someday, they will also have the satisfaction of knowing that their investment made the US electricity grid cleaner, more competitive and more reliable.

 

 

Comments

  1. Marc,

    Once you build enough transmission capacity over enough routes to move all of the wind-generated electricity to enough markets to consume all of the electricity when it is available, you are still faced with the problem that wind-generated electricity is not available all of the time and tends to be most available when it is needed least. It all comes back to storage and/or supplemental generation.

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