Navigant Research Blog

National High-Voltage Transmission Interconnect Project Continues to Face Support and Financing Hurdles

— August 7, 2015

The proposed Tres Amigas interconnection has been viewed as a critical development for establishing solid superconducting high-voltage direct current (HVDC) linkages between the three primary transmission networks in the United States. These networks include the Western Electric Coordinating Council (WECC), ERCOT, and the Eastern systems.  The project is thought to be critical to maintaining reliability and connecting the tremendous wind and solar renewable energy resources in the upper Midwest and the Southwest, with the urban population centers in the Central Midwest and the East.  The project has been in planning and early development stages since 2008, and it has struggled to get approximately $1.6 billion in funding for a highly technical project that involves large scale high-voltage alternating current transmission lines (HVAC) to HVDC lines necessary for synchronization of the three systems. It also incorporates re-conversion to HVAC at the interconnect points with the other networks.

In late July, the Federal Energy Regulatory Commission (FERC) announced that it had approved a request from the Southwest Power Pool (SPP) to void an interconnection agreement between Tres Amigas and Southwestern Public Service (SPS), primarily based on Tres Amigas missing multiple payments and a number of performance milestones. While the missed payments are a small portion of the total $1.6 billion dollar project, partnerships with adjacent transmission operators are critical to the completion of the project.

In previous Navigant Research blogs, I have discussed the development of a north-south transmission highway between the northern Midwest wind farms, the utility scale solar in the Southwest, and the population centers in Nebraska, Kansas, and Texas. Interestingly, the SPP transmission plans I saw show that this conceptual idea is beginning to come to fruition as new 345 kV transmissions systems are being built and older systems are upgraded.  Many of these projects have been completed by the transmission owner/entities in the region to address congestion issues in corridors like the Omaha/Kansas City to the Texas Panhandle route.

Anticipating Coal Plant Retirements

However, coal plant retirements across the lower Midwest, East Coast, and southeastern United States 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.  The Tres Amigas interconnection may be a critical part of the puzzle that is the modernization of the national versus regional transmission grids.  While Navigant Research expects that it will ultimately be funded by numerous transmission utilities, the full funding for the multi-billion dollar project has yet to fall into place.

You can read more about the Tres Amigas project and HVDC transmission systems in my syndicated reports, including High-Voltage Transmission Systems  and High-Voltage Direct Current Transmission Systems.


EIA’s Assessment of Coal-Fired Generation Plant Retirements Keeps Going Up

— July 16, 2015

The U.S. Energy Information Administration (EIA) continues to track the ongoing saga of coal-fired generation plant retirements within the electric power industry.  In March, the organization forecasted that up to 13 GW of coal-fired generation would be retired this year, due to both aging infrastructure and environmental mandates.  The total of scheduled coal-fired generating capacity retirements is split between 10.2 GW of bituminous coal and 2.8 GW of subbituminous coal. Most of this retiring coal capacity is found in the Appalachian region: slightly more than 8 GW combined in Ohio, West Virginia, Kentucky, Virginia, and Indiana. There are also plants in Alabama and in Midwestern states expected to be retired.

In June, the EIA released its analysis of the Environmental Protection Agency’s (EPA’S) proposed Clean Power Plan (CPP). The report looks at both capacity additions and plant retirements over the 2010-2040 timeframe. It illustrates how renewables play a critical role with different market conditions and policy assumptions. Key differences in scenarios analyzed involve the timing and the extent that wind and solar electric generating capacity additions occur, as well as retirements of some generation capacity, mainly coal-fired units and relatively inefficient power plants that use natural gas or oil-fired boilers to run steam turbines.

Electric Capacity Additions and Retirements, United States: 2014-2040

EIA Chart

(Source: U.S. Energy Information Administration)

Interestingly enough, even without the proposed CPP, 40 GW of existing coal-fired capacity and 46 GW of existing natural gas/oil-fired capacity are expected to be retired by 2040 in the forecast reference case. Cases that implement the proposed CPP more than double these retirements, particularly for coal. In the base policy case, 90 GW of coal-fired capacity and 62 GW of natural gas/oil-fired capacity is expected to be retired by 2040. In the policy extension case, as emission rates continue declining after 2030, over 100 GW of coal-fired generating capacity and 74 GW of natural gas/oil-fired generating capacity is expected to be retired by 2040.

All About Timing

When coal retirements happen is influenced by implementation of these environmental rules that may require power plant operators to either retrofit power plants or receive less revenue because of lower levels of operation. As a result, many coal retirements are expected to occur during the implementation of the EPA’s Mercury and Air Toxics rule (in both the reference case and base policy case).

Whether one takes a conservative reference case view or an aggressive growth position, in our lifetimes, we will enjoy cleaner power provided by natural gas, wind, and solar generation, as well as blue skies. Though the U.S. Supreme Court has recently ruled against the CPP, which may throw some of the retirement schedule to the wind,  with the coal generation fleet rapidly aging, the future still looks very bright.


Google Expands Data Center Fleet at Retiring TVA Coal-Fired Generation Site

— July 7, 2015

In late June, Google announced plans to site its 14th massive data center at the Widows Creek Tennessee Valley Authority (TVA)  coal-fired generation site in Alabama.  The $600 million facility will also re-purpose the 60-year-old coal-fired site, which will soon be retired, leveraging existing electric transmission and distribution infrastructure. This infrastructure might have otherwise become another stranded utility asset, ultimately abandoned.  While the data center is planned to be powered by 100 percent renewable energy, access to existing electric transmission infrastructure provides access to renewable power not generated at the data center site, as well as additional backup capabilities sometimes necessary to operate 24/7.

The size of and the electrical power requirements for Google data centers are huge. Google has a history of building creative large-scale data centers, which are some of the largest electric power consumers on the transmission grid.  The company’s data center designs are typically state of the art, utilizing the latest cooling technologies to keep aisle after aisle of servers running at optimal temperatures on a 24/7 basis.  Google’s designs are also known for their creative use of renewable energy where possible.

TVA’s Widows Creek Facility


(Source: Tennessee Valley Authority)

Model  Behavior

Gary Demasi, Google’s director of data center energy and location strategy, reported that, “The idea of re-purposing a former coal generating site and powering our new facility with renewable energy — especially reliable, affordable energy that we can count on 24/7 with the existing infrastructure in place — was attractive.”

Patrick Gammons, Google’s senior manager for data center energy and location strategy added, “Thanks to an arrangement with Tennessee Valley Authority, our electric utility, we’ll be able to scout new renewable energy projects and work with TVA to bring the power onto their electrical grid. Ultimately, this contributes to our goal of being powered by 100% renewable energy.”

With the seemingly insatiable need for power, infrastructure, and real estate that large data centers have, this 100% renewable data center plan provides a model for other utilities nationwide to use when determining how to redevelop coal plant sites. With the Energy Information Administration’s (EIA’s) recent announcement that the coal plant retirement timetable is accelerating, in part due to the U.S. Environmental Protection Agency’s Clean Power Plan mandate, Google’s clean energy leadership is certainly an inspiration.


Massive Hydro, HVDC Project Brings Latest Submarine Cable Technologies to Eastern Canada

— June 17, 2015

During the past 2 months, I’ve written a number of blogs that illustrate the truly epic nature of high-voltage direct current (HVDC) submarine electric transmission projects in Europe and North America. What has become apparent is that these projects almost always have significant underground and overhead components that are part of the larger HVDC market.

Nalcor Energy’s Lower Churchill Project has a fascinating twist, as it includes the construction of two new hydroelectric generation stations near Muskrat Falls in Labrador, Canada. This large-scale HVDC electric transmission interconnection project will ultimately be more than 1,100 km long, linking Muskrat Falls near Happy Valley-Goose Bay, Labrador, to Soldiers Pond, Newfoundland, and transmitting hydropower between the two points.

Nalcor Energy awarded Alstom a 350 kV HVDC turnkey contract to design, supply, and install a point-to-point HVDC solution for the Labrador-Island Transmission Link, including multiple high-voltage alternating current (HVAC) to HVDC converter stations at Muskrat Falls, and in Soldiers Pond in Newfoundland. Alstom is also building two cable compounds on both shores of the Strait of Belle Isle to connect submarine cables crossing the strait to the onshore overhead transmission lines. Nalcor Energy indicates that this project will establish itself as a valuable power-producing asset for decades. It is also expected to generate significant employment and economic benefits, including billions of dollars in income for Newfoundland and Labrador businesses, according to the company.

On the Rocks

The project was initiated in Forteau and Shoal Cove in 2013. Given the rocky terrain, significant horizontal drilling was necessary, with drill rigs and other equipment operating on both sides of the strait to create boreholes for the submarine cables. Drilling activities were completed in August 2014.  The following figure illustrates the scope of the project that includes multiple deep-channel HVDC submarine cable installations.  It shows the configuration of the submarine cable system across the channel between Labrador and Newfoundland.  Interestingly, the cable had to be submerged using a drilled conduit to ensure that the span was deep enough to avoid major icebergs, shipping anchors, and other hazards.  Subsequently, the cable was buried under a 12-meter wide by 1.5-meter high rock berm.

Drilling Activities

Jim Diagram

(Source: Nalcore Energy)

In 2016, a cable installation vessel will begin installing the three transmission cables on the sea floor. Rock berms will then be placed over each cable by a rock-laying vessel to protect the cables from marine vessel traffic and fishing activity. Transmission compounds and connectors will also be constructed in Forteau and Shoal Cove.  You can learn more about this project in Navigant Research’s forthcoming Submarine Electric Transmission report.


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