The study, released in November by global consultancy IHS Emerging Energy Research (EER), says that the top 20 US owners of transmission control more than 60% of all installed lines greater than 345kV. But it also identifies significant opportunities for new players in the sector, especially as many states scramble to meet RPS requirements towards the end of the decade.
"We're seeing a lot of new entrants getting into the transmission development market and the overwhelming reason is to unlock renewables, which will primarily be in the form of wind energy," said EER research director Alex Klein.
Although there are few DC lines in the US to date, the future could bode well for the technology. While impractical for short distances, DC transmission is significantly more efficient overall and leaves a smaller footprint than typical alternating-current (AC) lines - making them ideal for long-distance routes.
The study's conservative scenario assumes constraints on the expansion of renewable generation and shows little in the way of new DC lines. But its best-case growth model is defined primarily by the addition of DC transmission. "We're talking in the 2015-25 range," Klein says. "That's largely because it's when a lot of these RPS shortfalls are expected to mount."
Meanwhile, challenges facing transmission developers include cost allocation and the willingness of state regulators to enforce RPS policies. But complications related to siting are likely to remain the biggest roadblock, according to Klein. "That's always going to be a big issue for transmission," he said.
Much of the study's optimism, however, comes from Order 1,000, a recent cost-allocation proposal from the Federal Energy Regulatory Commission intended to provide a regional ratepayer framework for absorbing the cost of new transmission. The study also points to the stable return on investment provided by transmission that allows it to buck broader economic trends.
Such logic makes sense to Robert Kahn, executive director of trade association Northwest InterMountain Power Producers Coalition. "There's a lot of capital out there but not a lot of places to put it," Kahn said. Necessary infrastructure is always a good place to invest money, he added.
The study was compiled with input from companies active in transmission development and investment, along with detailed examination of proposed transmission projects.
The results were filtered through factors like GDP growth, expected power demand, natural-gas prices and a look at the logistics of wind power and other generation development.
"Our core business is tracking wind energy along with other renewables industries," Klein said. "So we were able to look at transmission development alongside where project development activity is taking place."