United States

United States

Michael Skelly moves into transmission lines

US: The former CEO largely responsible for building Horizon Wind Energy up into the third largest US developer and operator of wind projects is today on a new mission.

Michael Skelly
Michael Skelly

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Michael Skelly has moved on from putting up wind turbines to building new transmission lines for wind that are increasingly in need in the US.

Skelly’s new venture, Clean Line Energy Partners, hopes to string up a 1,200-kilometre transmission line that will unlock up to 7GW of high capacity factor Oklahoma wind power and deliver it to Tennessee and other points east where good wind is scarce and demand for renewables is on the rise.

The company was quietly formed over a year ago and has steadily added staff and reached benchmarks. For example, in early summer it filed with state regulators in Oklahoma and Arkansas to become a formal utility company.

This is required for Clean Line to build its proposed transmission line but it also makes the company accountable to regional state regulators and more open to public scrutiny. The company will need public support as it seeks to connect three states.

The project will begin in the western Panhandle region of Oklahoma, renowned for its high winds, cross entirely over that state of Arkansas, and stop outside Memphis, Tennessee.

A key element of the plan is to transmit the power through high voltage direct current wires (HVDC).

These require expensive $200 million conversion stations on each end to change the wind power from AC to DC in Oklahoma and back again in Tennessee.

The advantage is a more efficient long distance transfer of power and smaller lines and towers required throughout the almost 1,300km line. Because most of the line is DC, there will be no on or off ramps or other generators tying into the line between its converter points.

The minimum distance for an HVDC overhead line to be economical is usually greater than 643km, according to the company.

"Think of HVDC lines as express lines, suitable for long-haul transportation but not well-suited for short distances," says the company.

The economics of high capacity factor wind in Oklahoma will pay for the expense, says Skelly. Wind power development in the panhandle region, just north of where thousands of megawatts already spin in Texas, can be built and provide power at a cost of $25/mWh--$30/mWh.

Leasing land for wind projects in the region is also relatively affordable and local opposition is rare.
When factoring in the cost of the transmission line, Skelly says the power can be delivered to Tennessee at under $80/mWh, which is substantially less than wind would cost if built anywhere in the Southeast and much of the Eastern seaboard.

Clean Line does not intend to roll any of the projected $3.5 billion cost for the project onto public ratepayers. The cost will be paid directly and indirectly by the projected 7GW of future wind projects that will use the line to wheel power eastward. Clean Line says it will not take part in developing wind plants for the line.

"There are lots of developers out there. We feel it’s important to be agnostic with respect to ultimate project ownership," says Skelly. "We’ve avoided aligning ourselves with generators because that will help us build trust."

Some utilities located in areas of the country with poor renewables resources that aim or are required to source renewables will often buy renewable energy credits that are unbundled from the actual clean power. But Skelly says the best solution as more renewables are needed throughout the country is the physical delivery of clean electrons.

Skelly says the days when new wind farms were permitted at the intersection of good wind resources and transmission lines with spare capacity are largely over.

Ironically, he adds, one of the challenges to getting new lines built for wind is a strain of environmental Puritanism in many opponents to transmission who are concerned that new transmission lines will allow electricity from coal to also be transported on the wires.

"It won’t be possible to create transmission where a little bit of coal power doesn’t sneak through, that’s just the way the grid operates.

Even if you built a DC line from Nebraska or North Dakota straight to Chicago and you mostly interconnected wind farm, you would still have to rely on the grid for voltage support so some coal electrons may come through it and the environmental community will have to get comfortable with that," says Skelly.

One of Clean Line’s private financial backers is the Zilkha family, the original founders and backers of Horizon Wind.

Horizon first started in 1998 under the Zilkha name, was bought by Goldman Sachs in 2005 and sold to EDP Renováveis S.A. in 2007. Horizon now operates over 2.8GW of wind plants.

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