Dive Brief:
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Private equity firm Starwood Energy Group Global and startup TS Conductor Corp. launched a $100 million joint venture to build highly efficient transmission lines at no upfront cost, the companies said Thursday.
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The JV – Gridline Finance InvestCo – would be paid to replace old power lines or build new ones through the cost savings from using TS Conductor’s advanced wire technology, which can cut line losses by 50% and increase transmission capacity three times compared with standard transmission lines, Jason Huang, TS Conductor CEO, said in an interview Thursday.
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Rewiring existing transmission infrastructure with advanced wire technology could quickly increase capacity on the U.S. transmission system, according to Liza Reed, research manager for low carbon technology policy at the Niskanen Center. “You can bypass a ton of regulatory processes because you're not really having any impact on the things that [utility] commissioners want to have oversight over and you can get up to two times the capacity in that same right of way,” Reed said Friday.
Dive Insight:
The Gridline Finance announcement comes as federal, state and local governments, as well as corporations, are pushing to add more emissions-free capacity across the United States.
One of the major barriers to that effort is a lack of regional transmission lines to bring electricity from remote wind and solar farms to where the power would be used. There are also transmission bottlenecks across the country that prevent electricity from flowing to where it is needed.
The Federal Energy Regulatory Commission has proposed reforming its regional transmission planning rules and its grid interconnection requirements. But, with major transmission lines often taking five to 10 years to plan and build, it is unlikely FERC’s efforts will lead to new power lines soon.
TS Conductor aims to step into that void with power lines that have carbon composite cores wrapped in aluminum. They are stronger, lighter and more efficient than the standard aluminum conductor steel reinforced, or ACSR, lines that have been used since the early 1900s, according to Huang.
Those attributes mean transmission lines using TS Conductor’s technology require fewer and lower transmission towers, reducing a project’s overall capital costs, despite the company’s conductors costing more than ACSR lines, Huang said. TS Conductor’s lines can be installed using the same equipment and practices linemen use for ACSR lines, he noted.
Gridline Finance is adopting a business model commonly used by energy service companies that install energy efficiency measures in buildings. The company would be paid through the savings its projects produce, avoiding upfront payments from utilities.
About 5% of the electricity that was produced in the U.S. was lost as it traveled through the transmission and distribution system from 2016 to 2020, according to the Energy Information Administration.
Cutting those losses in half means utilities wouldn’t need to buy or produce as much electricity, savings that could pay for Gridline Finance projects in roughly 10 to 15 years, according to Huang.
“They got their resiliency, reliability and ability to accommodate renewable generation all in one place,” Huang said. “And they have savings to be enjoyed for the life of the project.”
TS Conductor has a manufacturing plant in California that can make 5,000 miles of wire a year and has a contract with a facility in China for 3,000 miles annually, according to Huang. The company is considering opening a larger plant on the East Coast, he said.
TS Conductor has been involved in two utility projects. In one, Montana-Dakota Utilities replaced a 60-mile transmission line. The 230-kV project was 40% less expensive than an ACSR line would have been and was built a year ahead of schedule, according to Huang.
Basin Electric Power Cooperative is using TS Conductor’s wire in a 26.5-mile, $57.4 million project being built in response to load growth in northwestern North Dakota. The project is set to be operating by the end of the year.
One of the challenges TS Conductor faces is that investor-owned utilities make their profits on their investments in their systems, according to Huang. Regulators should grant utilities a profit on a portion of the efficiency savings they realize through projects like ones using TS Conductor’s technology, he said.
The Inflation Reduction Act expanded the Energy Department Loan Program Office’s lending capacity by $250 billion, which could benefit TS Conductor, according to Huang. Some of the law’s domestic manufacturing incentives could also help the company, he said.
Replacing a quarter of the transmission lines that are hitting the end of their lives in the next decade with advanced conductors would save at least $140 billion and could support the addition of at least 27 GW of renewable generation annually, according to a March report prepared by Grid Strategies.
