Wind project could bring cheaper power to TVA

Wind project could bring cheaper power to TVA

Politics may get in the way of possible deal with Clean Line Energy

April 26th, 2017 by Dave Flessner in Business Around the Region

File Photo Wind turbines are getting bigger and more efficient, lowering the cost of wind generation, especially in windy areas such as Oklahoma and Texas. (Clean Line Energy Partners)

Photo by Contributed Photo /Times Free Press.

The developers of a proposed transmission line to carry wind-generated power from the Oklahoma plains to the Tenneseee Valley claim their $2.5 billion project could help TVA get cheaper and cleaner power.

But the political winds appear to be blowing against TVA buying the wind-generated power, even though it is cheaper than even the fuel prices for coal or natural gas, according to one of the executives who has worked on the project for the past eight years.

POLL: Should TVA support wind energy generation?

Mario Hurtado, executive vice president, development, Clean Line Energy Partners, speaks Tuesday, April 25, 2017, to writers and editors at the Chattanooga Times Free Press.

Mario Hurtado, executive vice president, development, Clean Line...

Photo by Angela Lewis Foster /Times Free Press.

Clean Line Energy wants to build a 720-mile direct-current transmission line from Oklahoma to a Memphis suburb to carry 4,000 megawatts of wind-generated electricity from where the wind blows the strongest to where the power demand is most needed.

Clean Line Energy wants to build a 720-mile...

Illustration by Contributed Photo /Times Free Press.

"We can get the power delivered to TVA for less than 2 cents per kilowatthour, which is less than just the fuel costs for coal or natural gas generation," said Mario Hurtado, the executive vice president of development for the Houston-based Clean Line Energy Partners. "It is a very, very compelling economic prospect for the region to get a long-term supply of power that is clean, that reduces air pollution, that is renewable to help economic development and is lower priced than just burning more fossil fuel."

TVA signed a memorandum of understanding with Clean Line Energy in 2011 to study the proposal, but the utility has yet to commit to buying any of the 3,500 megawatts of wind-generated power Clean Line Energy will bring to the western edge of TVA's territory along its 720-mile transmission line from near Diamond, Okla.

TVA says it doesn't need additional power generation due to the stagnant demand for electricity in its seven-state region. But Hurtado said Clean Line could substitute for more expensive existing generation and provide the type of renewable power that businesses like Google, Apple, Wal-Mart and Facebook want from power utilities where they locate.

"I think politics is getting in the way of rational economic decisions," Hurtado said. "Big infrastructure projects are always political."

U.S. Sen. Lamar Alexander, R-Tenn., one of the biggest defenders of the nuclear power industry, and Senate Majority Leader Mitch McConnell, R-Ky., one of the biggest backers of the coal industry, are among Tennessee Valley lawmakers who are skeptical of the Clean Line project.

In a speech on the Senate floor last month, Alexander said TVA abandoned its Bellefone nuclear power plant because it doesn't need any additional power so it shouldn't contract with a Houston company for future wind power that he said may prove inconsistent and more expensive in the future.

"Why would TVA announce that it doesn't need new power for the next 15 years, sell a nuclear power plant capable of producing reliable baseload power for the next 60 years, and then turn right around and buy unreliable wind power that might only be available for 20 or 30 years assuming the turbines don't break down?" he asked.

Alexander urged TVA to wait on the appointment of new board members by President Trump, who will be able to appoint a majority of the nine-member board this year, before deciding on the Clean Line proposal.

But Hurtado said waiting will only raise the costs of wind power since federal production tax credits for builders of wind turbines are being phased out over the next three years and that will add about 2 cents per kilowatthour to the price of wind generation.

"We will still be competitive in the future, but not as competitive as we are right now so we believe it is important to act this year," he said.

Backers of infrastructure spending proposed by Donald Trump during his campaign last year also are backing the Clean Line Energy project since the $2.5 billion transmission line is expected to spur another $7 billion of wind turbines in Oklahoma and Texas. Construction of the project is projected to add more than 5,000 jobs.

The Clean Line Energy project was one of 50 major projects compiled by an advisory task force for the Trump administration last year as part of the president's goal of creating 4 million infrastructure jobs and injecting $1 trillion into the American economy.

CG/LA Infrastructure, a global infrastructure strategy firm in Washington, D.C., is sponsoring a conference today to tout its Blueprint 2025 to double U.S. infrastructure investment. The plan includes the Clean Line project.

"The U.S. electricity system, with 450,000 miles of high-tension transmission lines, represents our greatest achievement and our greatest vulnerability," said Norm Anderson, president of CG/LA Infrastructure. "Four new electricity transmission lines alone would usher $30 billion in new capital and create 51,000 direct and indirect jobs."

TVA continues to study the Clean Line Energy proposal as the company tries to finalize purchases of land easements and complete other final environmental approvals for its transmission line. TVA could both buy the power from Çlean Line and use its transmission lines to wheel the wind power to other Southern utilities wanting more renewable energy, including Duke, Southern and Entergy.

"We continue to evaluate the costs for Clean Line to connect to the TVA system and the potential impact that would have on reliability for our customers," TVA spokeswoman Gail Rymer said Tuesday. "Of course, any upgrades that would be necessary to our system for the interconnection to our grid would be the responsibility of Clean Line."

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.


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