The U.S. transmission-line construction business is in the early stages of what may well turn out to be a 10- or even 20-year boom, according to transmission designers, contractors, electric utilities and independent transmission companies.
“We're looking at a decade or more of double-digit annual growth in power delivery services,” which includes work not only transmission lines but also on substations and lower-voltage distribution lines, says Don Mundy, senior vice president in Overland Park, Kan.-based Black & Veatch's management consulting business. “There are a lot of major projects being planned right now, and I think several thousand miles of new transmission lines will be built” by the early 2020s, says Mundy.
A new report from Cambridge, Mass.-based Brattle Group, prepared for Washington, D.C.-based Working Group for Investment in Reliable and Economic Electric Systems (WIRES), indicates that U.S.-wide transmission investment will likely range from $12 billion to $16 billion annually through 2030, stimulating $30 billion to $40 billion in annual economic activity.
“We're coming into an unprecedented build-out period for transmission in this country,” says WIRES President Jolly Hayden. He notes that, in Texas, more than 2,000 miles of new 345-kV line is expected to be built over the next three years—at a cost of more than $5 billion— to help deliver the output of thousands of planned wind turbines and new solar facilities to population centers such as Dallas/Fort Worth.
“[The transmission build-out] in many ways parallels that of the interstate highway system,” which for the first time provided efficient, inter-regional links for cars and trucks, says Hayden, adding that, similar the building of the U.S. highway network, the expanded transmission grid will take years to plan, design and build.
The two real drivers behind the boom in transmission work are the need to deliver large amounts of power from wind, solar and other renewable sources to population centers and the need to increase the reliability of the grid in general, says Michael Stoecker, vice president of power at Kenny Construction, Northbrook, Ill.
Stoecker says that 2011 will be “a very solid year” for Kenny and its competitors in the transmission-line construction business. In June, the company completed its work as construction manager and general contractor on the $1-billion Trans-Allegheny Interstate Line, a 160-mile, 500-kV project that runs through parts of Pennsylvania, West Virginia and Virginia. Among Kenny's ongoing projects, Stoecker notes the 150-mile, 500-kV Devers-Palo Verde project, planned by Southern California Edison, which is designed to help deliver large amounts of solar power from eastern Riverside County as well as help the utility comply with California's aggressive 33%-by-2020 renewable-portfolio standard. Kenny serves as the transmission project's CM.
Other major transmission-line builders with big projects on tap include Pike Electric, Mount Airy, N,C., which in March was awarded a $275-million engineering, procurement and construction contract for about 250 miles of a new 230-kV line that South Carolina Electric & Gas is planning as part of a larger effort to build two new nuclear units at the V.C. Summer station near Jenkinsville, S.C. Pike's work on the lines will continue into 2019, when the second of the planned units is scheduled to come on line.
Further, Black & Veatch is serving as owner's engineer on about 300 miles of a 345-kV line, planned by Sharyland Utilities, Dallas, in the Texas Panhandle. Black & Veatch is also the systems study engineer on the planned TransWest Express project, a proposed 725-mile, 600-kV direct-current line from southern Wyoming to southern Nevada.
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