Joseph Krist
Publisher
RECONDUCTORING
It is a word which you are likely to hear more about. Transmission access and capacity are increasingly viewed as obstacles to the adoption of renewable energy generation. The development of new transmission infrastructure faces extended regulatory processes. This motivates electrification advocates to seek answers which can provide some relief from existing infrastructure. One technological advance which is receiving a lot of media attention is reconductoring.
Reconductoring is the process of replacing conventional aluminum conductor steel reinforced cables with advanced conductors. It does not expand the footprint of the wiring infrastructure. This reduces the relative cost versus the construction of new transmission lines. The suggestion comes as the already lowering costs of clean energy.
GridLab is a Berkeley, CA based clean energy technology advisory entity. It does research and provides access to individuals with expertise in the many issues associated with clean energy. A new report from GridLab highlights the potential of reconductoring to provide a significant capacity addition to the nation’s transmission system within the existing corridors.
The report found that the declining costs of clean energy and growing power demand from electrification, manufacturing, and data processing have made grid capacity one of the primary constraints in the energy transition. Transmission capacity across the U.S. has grown only 1%/year over the past decade. Over 2 terrawatts (TW) of available generation and storage resources today remain untapped, awaiting grid access in interconnection queues. When advanced conductors are used, reconductoring in existing rights-of-way (ROW) can substantially increase transmission capacity in the current grid.
Among the conclusions the report reflects: not only can advanced conductors increase power density by up to 100% along existing ROW, but also that these technologies are being widely and successfully deployed in many nations around the globe. considering the challenges of building new lines, reconductoring can increase interzonal transmission capacity by nearly four times (+280%) by 2035 versus greenfield expansion only, with only 20% higher transmission expenditures over the same period. Second, reconductoring projects typically cost less than half the price of new lines for similar capacity increases.
The discussion coincides with estimates from providers of power of their transmission needs. ISO New England the regional grid provider, released its 2050 Transmission Study. It is the first the regional grid operator has undertaken examining the region’s transmission system in detail beyond the traditional 10-year planning horizon. The study estimates the region will need to invest between $16 billion and $26 billion on transmission infrastructure over the next 26 years to ensure a reliable clean energy transition.
MICHIGAN EV PLANT
The electric vehicle industry is going through a period of retrenchment as profitability has so far eluded the manufacturers. Rivian is delaying the development of a manufacturing facility in Georgia and consolidating production in Illinois. Ford and GM have experienced disappointing sales growth and profitability. Tesla sales are slowing. This has raised fears that massive support provided by states to EV manufacturers is not generating the expected returns on investment.
Ford had originally announced the development of an electric vehicle battery production facility in Michigan. The state offered some $2 billion in tax and other incentives including a local tax break worth about $772 million, $330 million for road upgrades, and a $210,000 job-creation grant that would go directly to Ford once it hires at the facility. When announced in February, 2023 the projection was for the creation of 2,500 permanent jobs. That was reduced to 1,700 in the Fall.
Ford originally expected to build a 2.3 million-square-foot production facility for lithium iron phosphate (LFP) batteries. The automaker’s footprint in Marshall is just over 500 acres, the site plan shows, compared to the 730 acres originally planned. Today’s construction reflects a 1.2 million-square-foot production building, a reduction of nearly one-half. Ford added a 600,000-square-foot packing plant to the west of the production building.
Given the lower amount of Ford’s investment, the pressure is on to recalculate the proper level of incentives from state and local government. If the expected economic impact from the tax incentives declines by 25%, many believe that the state’s subsidies should be reduced by a similar amount.
SMALL COLLEGE CLOSURE
The Goddard College Board of Trustees announced on April 9 that the institution will close at the end of the current semester. The Board came up with several attempts by Goddard to become financially viable which all proved unsuccessful. It had sought out educational partners and laid off staff. In January, it shifted its course offerings to on line only in what was described at the time as a temporary move. But, in the end, that strategy was not sufficient to save the college. the number of Goddard students plummeting from more than 1,900 in the 1970s to only 220 currently.
The Plainfield, VT institution joins Poultney’s Green Mountain College, Bennington’s Southern Vermont College, The College of St. Joseph in Rutland, and Marlboro College in Marlboro in ending operations over recent years. Goddard was one of the quirkier colleges whose reputation and demand were based on its unique structure. The decline in demand for that sort of curriculum and approach decimated its ability to fund from tuition.
Combine the looming demographic trends which are projected to lower demand across the board for higher education and the outlook for Goddard was bleak. The Trustees have now decided to close and the campus is reported to be up for sale.
DETROIT
Detroit has made the long trek back to an investment grade rating from the major rating agencies with S&P following Moody’s last month in moving the credit to investment grade. It culminates a decade long process which began with the City’s bankruptcy. S&P noted Detroit’s flexibility from operating reserves, the Retiree Protection Fund and stimulus funds and its “commitment to maintaining balanced operations.”
“The city has shown continuous operational and financial improvements that have allowed it to make significant strides to solidify its financial and economic position to a point that supports a BBB rating,” The rating agency also nodded to Detroit’s “achievable” pensions strategy, strong pipeline of economic development and the “disciplined planning and budget oversight” of the city’s management team.
A change in Detroit’s pension funding policy this year was reflected as the city changed its funding to a level principal amortization instead of a level dollar policy thereby leading to higher pension contributions. These were funded with increased draws on the Retiree Protection Fund rather than the operating budget. S&P notes that that the city has met all the requirements of its post-bankruptcy Plan of Adjustment, and has often “exceeded expectations.” The rating is limited despite these improvements as the City faces significant budget pressures not unlike those of many other older northern cities.
CRYPTO AND POWER
The U.S. Energy Information Administration estimates that mining for bitcoin and other digital currencies accounts for 0.6 to 2.3 percent of the nation’s electricity use. It is admittedly an educated guess at best. Recent growth is largely due to cryptocurrency mining operations relocating to the United States from China after that country cracked down on digital currency mining in 2021. The demand being generated by crypto currency activities is in the center of the issue of supply adequacy.
Assuming the share of global activity in the United States remains approximately 38%, USEIA estimates electricity usage from Bitcoin mining based in the United States to range from 25 TWh to 91 TWh. That estimate represents 0.6% to 2.3% of all United States electricity demand in 2023, which was 3,900 TWh. This estimate of U.S. electricity demand supporting cryptocurrency mining would equal annual demand ranging from more than three million to more than six million homes. USEIA identified a total of 137 facilities to date; there are only 52 facilities of those for which there is location and capacity data. Those sites are located in 21 states, with most in Texas, Georgia, and New York.
In Arkansas, the Legislature is revisiting legislation passed last year to support the growth of crypto mining in the state. The Arkansas Data Centers Act of 2023, or Act 851, which prevents local governments from passing noise and zoning ordinances specifically aimed at crypto mines. The Senate sponsor of the bill cites the increasing number of “bad actors” in the industry and increasing complaints from residents of host locations.
Several other proposed bills are being considered. They deal with who should regulate the industry, the establishment of new fees associated with crypto mining operations, siting issues, notice requirements before the start of operations at sites, and limits on foreign ownership.
NUCLEAR AND CLIMATE CHANGE THREATS
The GAO just released a study commissioned by Congress to review the climate resilience of energy infrastructure. The report examines (1) how climate change is expected to affect nuclear power plants and (2) NRC actions to address risks to nuclear power plants from climate change. The study notes that all operating and shutdown nuclear power plants are located in areas where climate change is projected to increase measures of heat, including daily and average maximum temperature.
The effects of climate change on maximum temperatures are projected to be most severe in the South, where one-third of the plants are located. The plants in the South are projected to experience an annual average of from 21 to 31 days with higher maximum temperatures than historical high temperatures. About 20 percent of nuclear power plants (16 of 75) are located in areas with a high or very high potential for wildfire. More specifically, more than one-third of nuclear power plants in the South (nine of 25) and West (three of eight) are located in areas with a high or very high potential for wildfire.
About 63 percent of nuclear power plants (47 of 75) are located in areas with exposure to either Category 4 or 5 hurricane storm surge or high flood hazard, and nine are located on a coastline, where NOAA projects a range of sea level increases. In addition, 20 percent of nuclear power plants (15 of 75) are located in areas with exposure to both Category 4 or Category 5 hurricane storm surge and high flood hazard.
Some 60 of the 75 nuclear power plants in the United States are located in areas with high flood hazard and two are in areas with moderate flood hazard. Just over one-third of the plants (21 of 60) located in areas with high flood hazard are in the South. About 23 percent of nuclear power plants (17 of 75) are located in areas that may be inundated by storm surge from Category 4 or Category 5 hurricanes. All 17 of these plants are in the East and South, and the six plants with exposure to Category 5 hurricanes are located in the South
About 23 percent of nuclear power plants (17 of 75) are located in areas that may be inundated by storm surge from Category 4 or Category 5 hurricanes. All 17 of these plants are in the East and South, and the six plants with exposure to Category 5 hurricanes are located in the South.
JEA MANAGEMENT UPHEAVAL
The attempt to privatize the City of Jacksonville, FL electric system four years ago led to federal criminal investigations and charges against members of management including the CEO and CFO. The potential for individuals to profit from the proposed sale led to increased scrutiny from the public and city government. Now, the former CEO of JEA has been found guilty of conspiracy and wire fraud in connection with a scheme that would have resulted in the CEO and other JEA executives making millions in bonuses if the utility was sold to a private buyer.
Now, the CEO appointed to replace the now convicted CEO is under pressure to resign. It turns out that the utility owned by the City is being run by managers operating remotely as they don’t live in Jacksonville. Questions have been raised over spending by JEA on a variety of events usually associated with private entities which focused attention on management. Many of the actions under question are not unusual in a private sector setting but the expectation for a municipally owned entity is to operate in a more cost conscious way. The point of a public utility is to provide a service on a cost of service basis, not to enrich management.
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