Climate hawks pursuing a “Green New Deal” based on wind and solar power face a significant obstacle: building more interstate transmission lines.
To succeed in marshaling an overhaul of the nation’s power lines, Democrats would have to go further down the path forged by Houston-based entrepreneur Michael Skelly. According to Wall Street Journal reporter Russell Gold, Skelly was “tantalizingly” close to building what would have been an “electricity expressway” delivering renewable energy across the country.
Gold profiled Skelly and his company’s nearly decadelong effort to fix the nation’s Balkanized power grid in a book this year titled, Superpower: One’s Man’s Quest to Transform American Energy.
The book, and Skelly’s story, function as both a warning of and a guide to the challenges of building transmission lines, endeavors that often meet political opposition at the local rather than the federal level.
Skelly folded his company, Clean Line Energy Partners, in 2017, after local organizing, political agitating, federal government delay, and utility disinterest killed his plan.
“Skelly will play a role in getting this across the finish line,” Gold told the Washington Examiner in a recent interview. “He may not get the glory of being there for the ribbon-cutting, but he is certainly one of the fathers of the idea.”
Transmission lines are critical to transporting electricity from places, typically rural areas, that have an abundance of wind or solar to consumers in population centers that don’t generate significant renewable electricity.
Democratic presidential candidates have proposed ramping up federal funding for wind and solar so the nation can reach net-zero carbon emissions by 2050 and get halfway there by 2030, but that can’t happen without improving transmission lines.
Elizabeth Warren promises to “provide incentives” to expedite the planning and siting of interstate transmission lines. Bernie Sanders aims to spend $526 billion on a “modern, high-volt electric transmission and distribution grid” to “ensure our transition to 100% sustainable energy is safe and smooth.” He promises to build lines underground, an untested method that is more expensive than above-ground lines, but that could avoid the backlash that visible power lines would elicit.
“If a Democrat gets elected to the White House and wants to build renewables, they need to get behind transmission,” Gold said. “It is the only way to get from 10% to 20% to 50% renewables with any speed.”
Skelly, 58, caught on early to the importance of transmission, founding Clean Line in 2009 to build a 720-mile line through the middle of the country, with the capacity to carry 4,000 megawatts of wind and solar, enough to power 1.5 million homes. The project, called Plains & Eastern, would move power from Oklahoma, where the wind blows consistently and powerfully, to Memphis, Tennessee.
He later sought to build multiple transmission projects, increasing his odds of success.
Skelly, the son of an electrical engineer, began work on wind energy in 2000, when many considered the industry a “joke,” Gold recalls.
Eight years later, he created the second-largest wind power company in the United States, which he then sold for $2 billion.
As the wind became more abundant, dropping in cost due to improved turbine technology and government subsidies, Skelly realized a lack of transmission would stunt its growth.
Described by colleagues as animated, imaginative, and relentlessly upbeat, Skelly won over critical financial backers for his new transmission company, Gold writes in the book.
Skelly, a tall and gangly Harvard University graduate who bikes to work, described building transmission as “hard as shit” but worthwhile because we are tackling one of the biggest challenges of the day.”
But Skelly’s ambition eventually ran into political, legal, and bureaucratic obstacles.
The fundamental problem is that major long-distance transmission projects must undergo a diffuse permitting process that is subject to delay because of local opposition from people living near the planned power lines – a problem known as not-in-my-backyard-ism, or NIMBYism.
And the places where power lines would need to get built don’t necessarily benefit from using or generating the power, making it harder to get their approval to build.
Skelly encountered this problem with Plains & Eastern as he faced opposition from politicians and landowners in Arkansas, a state in between Oklahoma and Tennessee that would not directly see value from the power line.
Arkansas was caught in the middle of the producing and receiving end of the line and refused to give Clean Line authority to build it. Counties issued resolutions against it, warning it would be an “eyesore” with “little positive effect” to Arkansas. Arkansas’ Republican senators and House members proposed legislation to impede it.
To overcome local opposition, Clean Line sought to take advantage of a provision of the Energy Policy Act of 2005 that allows for the federal government to partner with private companies to build interstate transmission. The private company provided money, while the government brought the power of eminent domain.
Gold, however, says the Obama administration’s Energy Department was slow granting approvals for Clean Line.
President Barack Obama entertained the idea of including transmission in the 2009 stimulus spending package after the recession. Still, his advisers talked him out of it because constructing a new grid would take too long and money needed to get out fast.
“The Obama administration was on paper in favor of these projects,” Gold said in the interview. “But they were not willing to go to the mat for them.”
The Obama administration eventually approved eminent domain for the line to cross into Arkansas but required Clean Line to grant concessions.
Skelly still needed a big customer in Tennessee to make his investment worthwhile.
He turned to the Tennessee Valley Authority, the largest government-owned utility in the country, providing power to 7.5 million people in Tennessee and parts of six other southeastern states.
The Tennessee Valley Authority was long dependent on coal and has been slow to transition to renewables. Still, then-CEO Bill Johnson deliberated over Skelly’s proposal to obtain power from Plains & Eastern starting at $18.50 per megawatt-hour, cheaper than the cost of operating a nuclear or gas plant, Gold says.
However, facing aggressive political lobbying from the likes of Sen. Lamar Alexander of Tennessee, who Gold describes as having an “inalterable aversion to wind,” the Tennessee Valley Authority declined to do business with Clean Line, effectively killing the project.
“It could not have happened without TVA,” Gold said. “They needed to be that anchor customer. That was a purely political decision, not a market decision.”
Skelly and his Clean Line team made a last-ditch effort to appeal to the Trump administration to pressure TVA.
Gold reports the Trump administration included Plains & Eastern on a list of 50 top-priority infrastructure projects, with the White House describing it as a “national security project that can add resiliency to our electric grid.” But the Trump administration never fully backed it.
Still, Skelly has not “given up the dream” of transmission, Gold said. Skelly currently advises the investment banking firm, Lazard, on renewable energy projects.
After Clean Line spent more than $200 million to design and permit Plains & Eastern, the company sold the Oklahoma portion of the line to NextEra Energy, a Florida utility and the largest wind and solar developer in the world. NextEra has not committed to finishing Plains & Eastern.
Another one of Clean Line’s projects, the Grain Belt Express Line, is closer to becoming a reality after being sold to Invenergy. It could be operational in five years, Gold said. The 780-mile line would transport about four gigawatts of wind from western Kansas through Missouri, Illinois, Indiana, and the eastern grid run by PJM.
“He is still out here trying to raise the profile of transmission,” Gold said of Skelly. “This may be a big complex effort that takes 10 years of people talking about it to come together.”
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