Navigant Research Blog

In Detroit, a Utility Comes to the Rescue

— January 14, 2015

In early December, the municipal power system in Detroit had a major power outage that was thankfully restored by DTE Energy (DTE), the investor-owned utility that stepped in to lend a helping hand.  The Detroit municipal system supplies power to city buildings such as courthouses, hospitals, city offices, and schools, as well as critical local infrastructure such as traffic lights, municipal transportation, and fire departments.  Even the Detroit Red Wings hockey practices were disrupted by the power outage.  Fortunately, with the help of DTE, the outage was restored within 9 hours and life in Detroit was back to normal.

As news of the municipal power system outage spread, it was initially speculated that this power failure was another glaring example of the lack of ongoing investment in critical infrastructure that occurs when a municipality goes into bankruptcy.   The good news is that, as part of the bankruptcy process, Detroit will no longer run the electric system; DTE will begin running the grid over a 4-year transition period.  DTE’s deeper pockets will restore the high standards of operation for the Detroit municipal system.

The Beleaguered City

Detroit’s woes have been national news over the past 3 or 4 years, as illustrated by the many pictures of abandoned neighborhoods, factories, churches, and commercial buildings.  In fact, Detroit’s mayor, Mike Duggan, said at a news conference on Tuesday, December 2, 2014 that, “Today is another reminder of how much works we still have to do to rebuild this city, and the bankruptcy order doesn’t solve the decades of neglect in our infrastructure.”  The mayor’s spokesperson, Robert Warfield, went on to say that the outages were “caused by extreme heat, cable failure, and routine maintenance – all combining causing system overload.”  Apparently, a cable feeding a critical substation failed, and the municipal utility tried to reroute the system, triggering a circuit breaker, which caused the blackout.

Spirit of Cooperation

During 2014, I wrote a number of blogs on various utility transmission and distribution issues that arise and the investment required to keep the lights on.  These issues are also discussed in detail in Navigant Research reports, including High-Voltage Transmission Systems, Flexible AC Transmission Systems, Synchrophasors and Wide Area Situational Awareness, and Smart Grid: 10 Trends to Watch in 2015.   Over the years, I have seen neighboring and even distant utilities step in to help utilities in another state or region restore power after a natural disaster, storm, or power failure.  DTE’s work to make sure the lights stay on in Detroit is another great example of the spirit of cooperation within the electric utility industry.

 

India’s Faulty Grid Presents A Transmission Opportunity

— January 12, 2015

Many of us here in the United States have little appreciation for the tremendous size and opportunity for electric transmission and distribution system technologies in the Asia Pacific region.  To use Geoffrey Moore’s analogies regarding how technology markets develop, there are the 500-pound gorillas, two or three followers, and a number of other wannabes.

Taking that metaphor to the regional market level, the Asia Pacific market has two significant gorilla countries, India and China, some followers like Japan, Australia, and Indonesia, and then the other wannabe countries.  Electric transmission technology vendors have an opportunity-rich environment across the region, but the sheer scale of the opportunities and the sophisticated plans in India and China present the biggest gorillas.  To illustrate this point, I’ll focus on India, where the national transmission planning process is most transparent.

The 1.2 Billion

India currently has a population of 1,264,360,000 people, representing 17.5% of the world’s population, or 386 people per km2, of which only an estimated 30% have electricity.  The country’s landmass is approximately 3,287,263.00 km2, which is about half the size of the United States.  India currently has over 220 gigawatts (GW) of generation capacity, a number that is expected to grow to 425 GW in 2022, with the addition of up to 66,000 kilometers of transmission lines and 90 new substations.  Most of the current electric transmission system in India is in the 135 kilovolt (kV) to 450 kV range, and it has significant reliability issues due to weather, introduction of intermittent renewables, and aging infrastructure.

The fascinating point here is that Power Grid India, the national transmission system operator, is now building out a high-voltage transmission superhighway that will serve as the backbone for India’s rapidly expanding transmission and distribution grid.  This plan is exceptional because of the use of extra-high-voltage 800 kV high-voltage direct current (HVDC) and 765 kV high-voltage alternating current (HVAC) systems – on a scale seen nowhere on the globe except in China.  The following graphic shows the overall configuration.

Planned HVTSs under Implementation, India

(Source: Power Grid Corp.  of India Ltd.)

The Way Forward

Adding to the tremendous scale, India is specifying and using the latest technologies, including state-of-the-art flexible AC transmission system (FACTS) devices such as static VAR compensators (SVCs) and static synchronous compensator (STATCOMs) that are still controversial in some regions in North America, such as PJM, as well as synchrophasor and wide area situational awareness (SWASA) technologies and solutions to better manage the transmission grid in real-time.  These technologies and markets are discussed in a series of Navigant Research reports from 2014, including Flexible AC Transmission Systems and High Voltage Transmission Systems.

India recently deployed over 1,300 phasor measurement units (PMUs), giving the country one of the largest current PMU deployments in the world, showing leadership in advancing these new and powerful technologies.

For the big three electric transmission technology companies, ABB, GE/Alstom, and Siemens, as well as the other technology companies like Schneider, S&C, Mitsubishi, Toshiba, and other new entrants, the rapid expansion of India’s transmission system represents a tremendous revenue opportunity.  For the population of India, it represents electrification on a large scale a much more reliable and resilient power grid – and a path to a much higher standard of living.

 

New Transmission Replaces Retiring Coal Plants

— December 23, 2014

In my drive across the country last summer, two unexpected features of the landscape stood out.  First, driving across Nevada and Utah, the silhouette of coal power plants frequently loomed on the horizon.  Second, the sweeping vistas almost anyplace across the western half of the United States now almost always include electric transmission towers and power lines. The recent U.S. Environmental Protection Agency (EPA) Clean Power Plan (CPP) will certainly change that landscape, as aging coal generation plants are retired and dismantled. Driving between Green River and Provo, Utah, I passed through a beautiful canyon and within a few hundred yards of the Price Canyon coal-fired plant, which is scheduled for retirement due to age, EPA compliance regulations, and a constrained location.

If the EPA plan is implemented as currently written, there will be an increase in transmission planning and spending as the transmission grid is reconfigured to address coal generation plant retirements and new transmission capacity is required to deliver wind and solar resources to utilities in other parts of the country.

Out of the West

In previous Navigant Research blogs, I have discussed the development of a north-south transmission highway between the northern Midwest wind farms and the population centers in Nebraska, Kansas, and Texas.  However, coal plant retirements across the lower Midwest, East Coast, and southeastern U.S. will have a serious impact on electric reliability across those regions, according to the North American Electric Reliability Corporation (NERC). Forward-thinking electric transmission companies are anticipating this and are now building new west-to-east transmission to deliver wind power from the High Plains to population centers in the Midwest and Southeast that will be hit hard by the retirements.

In November, the Rock Island Clean Line LLC filed petitions with the Iowa Utilities Board to obtain new electric transmission line franchises.  Rock Island plans to construct, maintain, and operate an electric transmission line across 16 Iowa counties.  The project is an approximately 500-mile overhead, high-voltage direct current (DC) transmission line that will deliver 3,500 MW of wind energy generation from northwest Iowa to cities in Illinois and other eastern states.

When you look at the distribution of existing coal-fired generation plans across the United States, it’s easy to imagine where additional new transmission lines will be needed. The map below shows the distribution of the coal generation fleet across the United States.

Coal Power Plant Locations and Size, United States: September 2014

(Source: Energy Velocity Maps)

Perhaps another transmission superhighway, using ultra-high-voltage alternating current and high-voltage DC transmission lines to move energy from the High Plains to the Midwest and Southeast, will take shape in the coming years.

 

Will Coal Plant Retirements and Fracking Threaten Electric Reliability?

— December 17, 2014

The implications of the rapid retirement of much of the U.S. coal generation fleet are just coming to light, and transmission operators and generation utilities are actively discussing and planning on contingencies that could cause a real threat to reliability and availability in many regions across the nation.  (The issues around retiring and decommissioning coal plants were discussed in Navigant Research’s research brief, Coal Plant Decommissioning.)  Compounding the threat of coal generation plant retirements is a short-term shortage of coal in many regions of the nation.

The U.S. Environmental Protection Agency (EPA) announced its proposed Clean Power Plan (CPP) rule in June 2014.  It’s expected that the final rule will be announced in June 2015.  The CPP targets CO2 emissions by existing fossil-fueled electric generation and sets targeted reductions for each state.  The plan, as currently proposed, mandates 30% reductions in carbon emissions by 2030 from 2005 levels.

The proposed plan also gives each state flexibility to develop its own approach as to how it will meet the targets, including retiring problematic coal and other fossil fuel generation, adding renewables, such as wind or solar generation, or increasing levels of demand response and energy efficiency programs, which the recent EPA mandates may accelerate.

Time to Plan

Most people do not understand the issues that will arise in the Midwest and the southeastern United States as a result of coal generation plant retirements.  The North American Electric Reliability Corporation (NERC) discusses the implications at length in a recent paper on the impact of generation plant retirements based on the CPP.  NERC concludes the paper by suggesting that states immediately start operational and planning scenario studies, addressing resource adequacy, transmission adequacy, dynamic stability, and  economic and reliability impacts.  This must be done to demonstrate reliability and to ensure that plans of action are technically achievable within the stated time requirements.  “States that largely rely on fossil-fuel resources might need to make significant changes to their power systems to meet the EPA’s target for carbon reductions while maintaining system reliability,” the NERC authors conclude.

Supplies Down

In the near term, another related reliability threat is looming: the availability of coal to fuel the generation plants operating today.  Having formed a new trade group called the Western Coal Traffic League, Midwestern utilities are frustrated because their normal coal supplies from western U.S. coal producers have kept utilities from rebuilding stockpiles burned during last year’s cold winter. Compounding the effect, record harvests, economic growth, and growing oil shipments from the country’s booming oil fracking industry in in the upper Midwest are constraining the rail system.

The effective implementation of the CPP, along with tight supplies of coal, will make for an interesting winter in many parts of the United States.

 

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