Traditional Transmission Line Siting
Power Lines Heavily Impact Landowners
Above-ground power lines are more difficult for landowners than pipelines, water lines, or fiber optic lines. They are visible, unlike buried utilities. Their physical presence requires extra time and care when planting, spraying, plowing, or harvesting. They also present safety concerns. Tall farm equipment can get close enough to lines to cause electricity to arc. Anything near the powerlines, like fences or center pivot irrigation, must be well grounded, or they can pick up a charge and cause shock.
You get paid once upfront, then live with a thorn in your side every time you farm for the rest of your days.
Wind farms, which developers site through private agreements without eminent domain, offer an excellent counter-example. Farmers are more than willing to accept wind turbines hundreds of feet tall because they pay well and take up little land. But the price they demand for above-ground power line easements is higher than what it costs the bury the relatively low voltage wires. That is why when you see wind turbines, there are rarely power lines leading up to them. Developers bury them all until they reach a central collection point.
Transmission projects have gotten more challenging to site over time. A combination of better rural education, increasing plot sizes, and better land owner protections made holdouts better adversaries. Even if utilities eventually win, more sophisticated land owners can drag them through lengthy and expensive eminent domain hearings. Many owners still don't know their rights or how to exercise them.
Incremental Network Additions
Historically, transmission upgrades have been local. Some combination of load growth or new power plants requires new connections. These projects are usually <100 miles long, impact relatively few landowners at one time, and often avoid federal regulations like NEPA.
The local economic benefits are clear. New users gain reliable electricity, and new power plants increase economic growth. The political balance favors the many beneficiaries over a small group of landowners.
These incremental upgrades eventually stitched our major North American grids together.
Improvements in Transmission Towers
Traditional high voltage transmission towers have a lattice design. Workers build them like giant erector sets. Lattice towers have advantages in material cost but disadvantages in labor cost and land usage. They were the perfect solution for the good ole days with cheap labor costs and farmers with eighth-grade educations.
A Lattice-Style Tower; Source
New monopole designs are rapidly displacing lattice towers. Their physical surface footprint is 1/15 of a lattice design, their visual impact is lower, and they modestly reduce right-of-way requirements. Installation time is a fraction of lattice transmission towers given monopole's modularity.
A Monopole Tower; Source
New transmission lines utilizing monopole towers go up faster, can increase throughput on existing right-of-ways, and unlock siting locations like highways.
New wind farms quickly increase the need for new transmission lines. Most new transmission projects in windy Great Plains states take advantage of these benefits. They focus heavily on improving existing capacity and utilizing highway right-of-ways where possible.
Struggling with Long Distance Approvals
Interstate transmission lines see ferocious political opposition.
Differences Between HVAC and HVDC
Our existing electricity grid uses Alternating Current (AC). A new series of interstate transmission lines want to use High-Voltage Direct Current (HVDC) technology to carry electricity long distances.
HVDC has fewer line losses, making it ideal for longer distances. Its power density means one line can replace several ultra-high voltage AC lines, reducing right-of-way and construction costs. DC's advantages come from not having a skin effect or a corona discharge.
AC suffers from something called skin effect. As alternating current switches polarity, disturbances push the current to the outer parts of the conductor. Effective resistance increases since the cores of the wires are underutilized. The center of most conductors is made of steel to add strength, and only the outer skin is better-conducting metals like aluminum. It doesn't matter that steel has more resistance because less current flows in the middle.
Overhead power lines rarely have insulation. Air both insulates and cools the wires. Corona discharge is where electric fields from the wire start ionizing the air around it, causing line losses. AC's frequencies exacerbate the effect. Corona discharge is also the cause of the sounds transmission lines can make. Utilities try to reduce discharge by "bundling" wires near each other and reducing sharp points.
The downside is that AC to DC converter stations and other equipment are expensive. New HVDC is only competitive over long distances, and the economics do not support many off-ramps.
Politics is Stacked Against Greenfield, Overhead HVDC Projects
The political math for new, overhead HVDC projects is simple. They must cross thousands of landowners, usually involve multiple states, and use relatively large right-of-ways. The towers and lines bother landowners more than buried utilities. Only residents at the origin and the terminus see any benefits.
Is it any wonder that the politicians in many states kill these projects?
Analyzing the Grain Belt Project in Missouri
Flatland wrote a great article detailing the conflict over a proposed HVDC transmission project that runs from Southwest Kansas to Indiana through Missouri and Illinois. Let's get some facts:
- Cleanline proposed this project almost a decade ago and estimated the cost at $2 billion. Another utility bought it within the last few years with plans to finish it. There is no update to the cost estimate.
- The line capacity will be 3.5-4 GW, with 500 MW offloaded in Missouri.
- The original proposal had zero offtake in Missouri but changed plans to try to salvage some politics and gain public utility status, which gives more power to seize private property.
- The estimated savings for Missouri utility customers will be $12.8 million per year.
- The proposal calls for using lattice-style towers.
Marks and Holdouts
Grain Belt claims (as of this spring) they have signed agreements with 1200 of the 1700 landowners they cross. Those 1200 are mostly the easy marks. They got their letter from Grainbelt and didn't realize they could negotiate or lacked the knowledge on how to work through the process. They might not have enough land to justify the extra work or the money to hire a lawyer to signal seriousness about going through eminent domain. The company's initial offer is 110% of the land value they cross plus a fee for each tower. That payment almost certainly doesn't account for the devaluation of the rest of the property.
The other 500 are a mix of characters. Some mostly care about reducing the impact and want to negotiate tower placement, route, etc. The money is fine as long as they minimize daily pain.
Others are more sophisticated. If you hold out, the rewards can be immense. Speed matters to developers, and there is a budget for handling right-of-way acquisition. If there are a lot of marks, then holdouts that delay and threaten to drag the company through hearings might get up to ten times the money as the initial offer.
The final category is angry people. These owners are often sophisticated, too. They won't negotiate and make the company go through the eminent domain process. For a little extra work, they get paid more and exact the maximum amount of pain on the developer. These owners commonly deny workers access to their property. The developer must call the sheriff to talk with the landowner. It both delays work and makes clear that the only reason this work is happening is because of the threat of violence.
The entire seizure process is expensive for the developer and emotional for both sides. When developers say they prefer to work a deal outside of court, that is for their benefit, not the landowners. If more landowners asserted their 5th amendment rights, these projects would be less attractive. Right-of-way commonly accounts for 10% of project cost, and going through the eminent domain process can double or triple acquisition costs, besides causing delays.
Reasons for Opposition
The article has a series of great quotes.
“No one who owns land can’t feel a special place for that land … That’s why you want to maintain it. This line is not going to do that. It’s going to create a big, obvious scar completely across the state. And it’ll be the single biggest, ugliest thing in northern Missouri and with it set a precedent for more to be built just like it.”
Sprouse is waiting to hear back on his submitted counter offer, and while more compensation would be great, what he really wants is to not have to see the line.
He hopes it could be buried like the 350-mile SOO Green HDVC Link in Iowa that is following existing railroad easements. As an alternative, he would proffer the Grain Belt Express follow highway right of ways in Missouri.
He’s not against easements. He already has three pipelines and several rural water lines. But he’s against easements that, he feels, don’t benefit Missourians.
“For someone who’s a private individual who’s just doing it to reap the benefits of that, and in using the cheapest cost plan to do it, that doesn’t justify the power of eminent domain,” he said.
"I can’t describe what it’s like to wake up every morning and have this on your mind and go to bed with that being the last thing on your mind for eight years."
If the line goes in, O’Bannon said her parents plan to move. Her grandfather and father were born in the house that could soon have Grain Belt towers in the backyard. She has neighbors who she knows will move too. It’s more than just a 150-foot wide easement that will be affected. “It is not that we are against progress or renewables, we’re against the way this business has conducted itself and the plan that they have to go through the middle of our farms,” O’Bannon said. “It’s just unbelievable how that feels, when you know in the end, they’ve got the eminent domain as their card to play.”
“The thing that I first looked at with them was, ‘Were they honest?’ Would they accept comments from us? Would they work at making changes? And they did.”
The property owners who support the Grain Belt Express by allowing the transmission line on their land are “kind of heroes.” Rather than think narrowly about the consequences of the towers on their land, Davies urges opponents to think of the consequences for a nation that doesn’t make big moves toward a sustainable future.
On choosing a different route:
Following the highway closest to the current route, U.S. 36, would face the constraint of nearby state conservation sites, as noted in Clean Line’s original route selection study. So, the route was proposed by the original developer of the Grain Belt Express. It mostly follows existing easements for pipelines or other power lines since the physical path is mostly cleared.
Summarizing Grain Belt
Some ambitious developers saw an opportunity to arbitrage electricity prices across the country. They did not account for politics, focusing on minimizing construction costs. The resulting anger delayed the project for years. The development of the Marcellus Shale and falling prices for solar and offshore wind decreased the arbitrage opportunity.
SOO Green HVDC Link
In contrast, SOO Green thought about politics. They plan a 350-mile, 2.1 GW line that follows railroad right-of-ways from Iowa to PJM Interconnect further east. They plan to bury the powerline to reduce visual impacts. It only needs a five-foot easement and can fit in existing right-of-ways. SOO Green spends more per mile upfront, but the shorter distance means the total cost to move electricity is not quite double Grain Belt.
Their justification for the project is simple:
"SOO Green will connect two of the largest electricity markets in the U.S.: the Midwestern MISO market where renewable energy is abundant and inexpensive, and the eastern PJM market, where clean energy demand is strong but more difficult and costly to develop."
What they failed to consider is that market conditions might change. PJM now has 200 GW of projects in its interconnection queue (PJM currently has ~187 GW of total capacity), of which 95% are wind, solar, or batteries. SOO Green wants to jump the multi-year queue because they are a transmission project, while PJM says they have to wait in line like everyone else.
DC's Advantage in Buried Power Lines
Cost estimates for burying transmission lines often come in at 10x-20x overhead lines. The cost between SOO Green and Grain Belt is more like 4x. The physics of DC transmission lines make burial easier. SOO Green is only burying two power lines in conduit using a "cut and cover" manner over most of their route.
Burying AC lines means burying three wires for each circuit. High voltage lines usually have multiple circuits because the skin effect places economic limitations on how much each one can carry.
High-voltage AC lines are often "buried" in complex duct banks made of concrete and PVC tubes. They are extremely labor intensive and expensive to make onsite. There have been some improvements with building the banks offsite and installing modular pieces. Concrete duct banks aren't a hard requirement, but they make construction and maintenance simpler for complex AC assemblies while also adding protection.
A Duct Bank; Source: XCEL Energy
Electricity losses from resistance become heat. Underground AC powerlines used either oil or nitrogen to shed heat. XLPE cables are an innovation that allows lower-capacity AC lines to ditch cooling fluid and the accompanying cost and complexity. Because DC experiences less resistance, resulting in less heating, DC lines can carry more electricity using XLPE cables.
DC projects that bury fewer, larger diameter wires that don't require concrete duct banks or heat shedding infrastructure result in a lower burial premium.
A Different Future
We can learn to live with the 5th amendment.
Adapting Technology to Existing Right-Of-Way
Upgrading existing transmission lines and running new ones along highways and railroads are great ways to minimize the need for eminent domain.
The Badger-Coulee transmission line in Wisconsin runs for around 100 miles next to an interstate highway. It is an overhead monopole style design. The utility planners worked closely with Wisconsin DOT to site the project to reduce the impact on current or future road use. Some states ban co-siting like Badger-Coulee or refuse to address conflicts between utilities and state DOTs.
Replacing end-of-life towers with monopoles or upgrading conductors can allow capacity upgrades while staying within the same right-of-way.
Burying lines can open up new flexibility, similar to SOO Green fitting on a rail right-of-way.
AC to DC Conversion
There are limits to upgrading existing AC corridors. More than 50% increases become cost-prohibitive for many potential projects. An alternative is converting HVAC lines to HVDC. The capacity of the lines can double or triple. The UltraNet project in Germany is one of the first examples of AC to DC conversion.
The throughput increase determines how much of the equipment a utility can reuse. Items like insulators on the towers commonly need upgrades. Technically up to 4x-5x increases are possible, but they may not be economically feasible.
The converter stations are still expensive, but reusing existing assets shortens the breakeven distance when comparing AC vs. DC. Cheaper conversion stations would increase the number of viable conversion projects. At the limit, it might make sense to convert a large portion of our HVAC transmission backbone to DC, expanding electricity markets and improving reliability.
Conversion stations are expensive because they are massive. Dealing with high voltage presents a lot of challenges. One way to think about voltage is potential energy. High voltage is like a tightly compressed spring that requires a lot of force to keep in place. Any mistakes can wreak havoc. Usually, we make electrical devices cheaper by making them solid-state. But our solid-state technologies use very low voltages because the potential associated with high voltage can break them. The lowest-cost high-voltage AC-DC converters are stacks of hundreds or thousands of small solid state devices in series with copious insulation between them.
Notice the Man; Source: Marshelec
There has been a lot of progress in adding new features to these conversion stations and less improvement in cost. The central tradeoff for long-distance transmission is that it requires high voltage to reduce amps and lines losses, but high voltage equipment is expensive and complex. Physics makes cost reduction challenging, but lower prices would create incredible leverage in converting existing AC lines.
The dominant technological need besides cheaper AC/DC conversion is to reduce the cost of underground power lines.
The costs of burial come from trenching and encasing the power cable. Cut and cover trenching is relatively cheap in soft soil but expensive in hard rock. Overhead wires have little or no insulation. Underground projects need full insulation and protection from water ingress.
Example of an XLPE cable with no cooling fluid. Air is a great insulator; Source: XCEL Energy
Transmission towers are expensive. AEP estimates they spend $800,000 per mile on materials for lattice towers for 765 kV transmission projects. The total is $1.6 million per mile, assuming the structures have a similar share of labor costs. Buried lines need a fraction of the vegetation management, have protection from the weather, and do not start fires.
Buried projects with small right-of-ways also see benefits in environmental regulation and approval. They are very similar to fiber optic lines which see expedited programmatic approvals.
Several startups are hoping to address burial costs:
Petra is working on a machine that bores through hard rock. It uses hot gas to fracture and spall the rock. Boring would be a complement to cut and cover methods in soft soil.
Earthgrid has a more ambitious goal to bore one-meter diameter utility tunnels everywhere. Their machine uses hot plasma to clear rock and dirt. Details are thin on challenges like preventing cave-ins or handling steam. Many similar drilling ideas envision glassing the walls with the plasma to create a casing. The goal is $300/meter, comfortably under AEP's estimated tower cost with room for higher wire CAPEX. The wires can use less protection since they are in a tunnel, and repair costs drop significantly. Moving electricity underground would be cheaper than overhead lines, possibly as low as $5/MWh for a 700-mile line like Grain Belt. Automating boring is easier than automating lattice tower construction and tree trimming.
Other companies like The Boring Company have goals that could put low costs in reach if their tunnels were smaller.
Putting New Power Lines in Context
As we saw with SOO Green, market conditions change. The original business case for Grain Belt assumed $50/MWh utility-scale solar and that it was competing against new natural gas and coal plants rather than their marginal cost.
These large transmission projects are expensive, but the numbers worked out. I estimate that moving electricity on Grain Belt costs ~$10/MWh using a simple Levelized Cost of Electricity (LCOE) model with an extremely generous 80% capacity factor and the decade-old cost estimate. The wind production tax credit means Southwest Kansas wind can be as low as $15/MWh ($30/MWh without subsidies). The total cost of $25/MWh made sense.
While Grain Belt was suffering political setbacks, the competitors were at work. Offshore wind prices have been falling at a good clip. Onshore wind turbine manufacturers released new designs that perform better at moderate wind speeds. New solar is often under $30/MWh before subsidies. Battery prices and availability improved significantly. New pipelines from the Marcellus Shale brought cheap gas throughout the PJM footprint. There is an avalanche of new solar and wind projects. That leaves excess natural gas power plant capacity that sells near marginal cost. Grain Belt's sales will also correlate with PJM's lowest electricity prices. Great Plains wind production reaches its nadir during the summer in the daytime and its peak at night in shoulder seasons like spring and fall.
Suddenly, the economics of Grain Belt look less compelling. Other transmission projects are in the same boat. The costs of local generation and storage are falling much faster than the cost of transmission. It wouldn't be surprising to see further competitor price declines lead to scaling back projects, similar to Plains and Eastern in Oklahoma. Grain Belt could still add value by bringing Western Kansas wind to Kansas City.
I'm far from the first to point out the rapidly deteriorating economics of long-distance transmission projects. But it matters when considering how much political capital to expend on different policies. Increasing federal powers of eminent domain over states to increase transmission has diminishing benefits. Efforts to remove barriers for co-siting, upgrades, and AC to DC conversion would go further.
Private property owners have much tougher constitutional protection from seizure than NIMBYs trying to prevent an offshore windfarm or a new apartment complex. If anything, they show developers grace by not exercising their full rights more often.
As our country gets richer, opposition to seizure will only increase. People want fancier things as they get richer, like buried utilities. More and more will have the knowledge and resources to put up a real fight.
Luckily for these property owners, the economics for long-distance transmission have eroded so quickly that new projects will struggle without drastic technological improvements. If prices of low voltage technology like batteries and solar panels keep falling, even those improvements may not be adequate.
The projects that make the most sense in the interim are local upgrades that align economics and politics and increase the ability of a region to build local generation.
The distance of the powerline's electromagnetic impact determines the right-of-way width. Taller, skinnier monopoles need less room than wider lattice towers.
Individual wind farms have <50% capacity factors. For Grain Belt to reach 80%, it would have to assume excess capacity and curtailment of its feeder wind farms and generation from gas, coal, or solar.
PJM electricity prices averaged <$30/MWh from 2019-2021, with even lower prices for times of high wind production. That doesn't leave much margin for new, long-distance transmission projects! The 2022 energy crunch has caused spot prices to rise, but futures show prices falling again after 2023. With so much capacity coming online and the government restricting new natural gas pipeline construction, prices could easily break previous lows. The renewables boom plus nuclear will knock out natural gas and coal as the marginal price setters in more hours, and in-basin gas prices could diverge significantly from Gulf Coast export hubs.
Appendix A: LCOE Calculations
#variables capacity_mw = 3500 length_miles = 700 capacity_factor = 0.8 yearly_mwh_moved = capacity_mw * 365 * 24 * capacity_factor year_cost_per_mile = 10000 economic_life = 25 CAPEX_total = 2000000000 discount_rate = 0.08 #starting values cumulative_discounted_cashflow = -CAPEX_total electricity_price_MWh = 0 #calculate discounted cash flow while cumulative_discounted_cashflow < 0: i = 0 yearly_revenue = yearly_mwh_moved * electricity_price_MWh yearly_fixed_costs = year_cost_per_mile * length_miles yearly_cashflow = yearly_revenue - yearly_fixed_costs while i < economic_life: discounted_yearly_cashflow = yearly_cashflow * (1-discount_rate)**i cumulative_discounted_cashflow = cumulative_discounted_cashflow + discounted_yearly_cashflow i += 1 if cumulative_discounted_cashflow < 0: cumulative_discounted_cashflow = -CAPEX_total electricity_price_MWh += 1 print("breakeven electricity price: $",electricity_price_MWh,"/MWh") print("OPEX per MWh: $", yearly_fixed_costs/yearly_mwh_moved)