Business still may be slow for many electrical contractors, with much of the construction industry remaining in the doldrums, but electrical pros specializing in major transmission work are experiencing a boom. Utilities and other transmission-line developers are scrambling to upgrade line reliability and bring mandated solar and wind energy to market before a number of state--mandated deadlines kick in, and the result is billions of dollars worth of new projects now underway or in the planning stages.

In fact, transmission investments could exceed $160 billion between 2012 and 2020 according to The C Three Group, an Atlanta-based utility-industry forecasting and consulting firm. The firm’s January 2012 quarterly focus highlighted several bullish data points, suggesting strong transmission-sector growth:

• ITC Holdings—the largest independent U.S. transmission developer—is planning more than $24.1 billion in new investments, including more than 8,686 miles of new or upgraded lines.
• Texas, alone, has more than 9,175 miles of new lines planned through 2020.
• U.S. and Canadian utilities and independent developers have nearly 4,000 substation projects planned over the next eight years. Columbus, Ohio-based American Electric Power, alone, has 268 projects planned in that timespan.
• In December 2011, C Three Group analysts added more than $2.7 billion and 1,408 miles of transmission line—and related substation projects—to its database of planned investments.

These estimates are in line with those from several other leading forecasting and consulting organizations. The Brattle Group, an international consulting firm based in Cambridge, Mass., is predicting U.S. transmission expenditures will average $12 billion to $16 billion per year for the next two decades, according to Johannes Pfeifenberger, principal and utility practice manager.

And IHS Emerging Energy Research, also based in Cambridge, anticipates approximately $100 billion in transmission spending in the next 10 years, with 40 percent of that figure devoted to high-voltage lines (i.e., those rated higher than 345 kilovolts).

“The demand for these projects is because of a number of factors,” said Jean Rollins, managing partner of The C Three Group. First, she said, a majority of states have established renewable portfolio standards (RPSs), requiring specific percentages of the total amount of electricity sold by utilities to be generated by renewable resources. Deadlines for meeting those requirements are fast approaching. For example, California utilities to must meet a 33 percent RPS by 2020.

“That’s 40 million people and a huge amount of electricity, and it’s going to suck in as much renewable energy as it can get,” Rollins said, noting that this growing demand is prompting a surge transmission construction.

“A lot of the renewable resources are located where people aren’t located. There aren’t a lot of people living where there’s a lot of wind,” she said, adding that utility-scale solar can be just as remote from population centers. “You just can’t build that in downtown Los Angeles. It’s going to need to be out in the desert.”

Adding to the needs raised by RPS legislation, Rollins said, utilities also face calls to improve overall system reliability as a result of the Energy Policy Act of 2005. The legislation outlines stringent fines in the case of reliability failure, so utilities are looking at upgrading or replacing infrastructure that could be up to 50 years old.

Pfeifenberger sees a similar need to revitalize our aging lines and substations. The last big transmission boom ran from the 1960s through to the early 1980s, he said.

“Since then, we almost stopped investing in transmission. By not investing much for 20 years, there’s a bit of catch-up that needs to be done,” Pfeifenberger said.

Getting any transmission project from planning to actual construction is a time-consuming process. Up to a decade can be spent getting siting and environmental approvals, Rollins said. And, as Pfeifenberger said, the effort to determine who will pay for such upgrades and expansions can add even more time to the project schedule.

“Traditionally, each utility has had to build its own transmission system,” he said.

However, remote renewable resources mean more transmission lines are crossing state borders, so multiple public utilities commissions can be involved in determining which customers pay. Additionally, such scenarios also mean multiple environmental reviews, which is especially complicated if only one of the states will be benefitting from the renewable resource.

“That’s always a challenge,” Pfeiffenberger said, “because nobody wants to look at a transmission line.”

However, the overwhelming need to feed our growing collection of flat-screen TVs and computer equipment with ever-cleaner electricity means the transmission boom is unlikely to be hindered by local challenges. And the electrical supply chain already is benefiting from developers’ efforts.

“I was just talking with a cable manufacturer the other day, and he’s completely booked up,” Rollins said. And, she said, the economic benefits of many such projects can continue long after the last wire has been run. “If you know how to maintain a wind turbine, you’ve got full employment for a lifetime.”


ROSS is a freelance writer located in Brewster, Mass. He can be reached at chuck@chuck-ross.com.