CEO of Grid United
Michael Skelly [00:00:03] Often we’ve seen this in electric power that like it’s the independents. They’re the first to do gas turbines. They’re the first to do when they were the first to do solar. Then utilities come along and start doing the same thing. I think we’ll start to see the same thing in that in the long distance transmission arena as well. So it’s kind of an exciting time as you think about that sort of success that we’re starting to see in this in this space.
Bill Loveless [00:00:30] The U.S. power grid needs more transmission states Net zero and clean energy goals are requiring the electricity sector to reduce emissions. And while building new renewable energy projects is the first step, connecting them to load centers or cities is the second. But the grid is congested and needs more capacity not only for solar and wind energy, but also for secure power supplies. New transmission lines can solve that problem. Private transmission developers looking to build high voltage direct current lines across multiple states. More cross-country connections would boost reliability and help get more renewable energy online. But different regulatory environments, stakeholder interests and landowners make interstate transmission hard to build. That said, these projects have been making headway. So why is it important to build transmission across the country? Why are private developers taking on the task? And what’s causing these projects to gain momentum in recent months? This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Bill Loveless. Today on the show, Michael Skelly. Michael is the founder and CEO of the transmission Development company Grid. United Grid United is currently involved in the North Plains Corridor project, which would be the first transmission connection between three regional U.S. electric energy markets in the Mid-Continent, the West and the Southwest. In 2009, Michael founded his first transmission development company Clean Line Energy, which also aimed to build multistate lines. Although Clean Line ultimately divested its projects and closed its doors, it helped pioneer the vision of building more transmission to connect renewable energy projects to the U.S. power grid. I talked with Michael about how the development landscape has changed over the past decade. We discussed the current obstacles to Grid United’s projects and how they are working to overcome them. I hope you enjoy our conversation. Michael Skelly, welcome to Columbia Energy Exchange.
Michael Skelly [00:02:50] Thank you very much. Great to be here and great to be back talking with you. Bill Yeah.
Bill Loveless [00:02:55] Yeah. I enjoyed some years back covering work you were doing back in your clean line days and and look forward to our conversation today. You know, Michael, you’re no stranger to people in the electricity sector. Having been a developer of wind energy farms in Latin America, in the United States, starting some 20 years ago, as well as an entrepreneur 30 actually.
Michael Skelly [00:03:17] But thank you.
Bill Loveless [00:03:18] Okay. Time goes by quickly and as well as an entrepreneur whose aim is to build long distance transmission lines across the country. But for those who may not be so familiar with you, tell us a little bit a little bit about the arc of your career and how it has brought you to where you are today.
Michael Skelly [00:03:37] Right. Well, thanks again, Bill. I’ve been working in electric Power for actually almost 30 years now, started working on hydroelectric and wind projects in Latin America, then moved to Texas in the late nineties, which it turned out was a very interesting time to get involved and in wind energy, because that’s when we started seeing the first state renewable portfolio standards and working with family here in Houston, the Zucker family, we built a pretty interesting company with projects in a dozen states and that company went through a couple of ownership transitions and is now the what is EDP renewables platform here in the U.S. And you know, with barrel 16,000 megawatts are coming up on 20,000 megawatts and, you know, more than a thousand employees. And I was kind of in the right place at the right time in the late nineties. And and we wrote a kind of an interesting wave and built what’s now a pretty, pretty interesting company. And from then I took a sabbatical and spent a year running for Congress here in Houston, where I got myself a silver medal 2008 and then spent trends a number of years on a company called Clean Energy, which we started in 2009 with some of my old Horizon led colleagues and then in and that what we learned a heck of a lot along the way are a few of the projects that we put together are now one of them is up and running Western spirit. And although it is now equipment’s order, it looks like it’s going to happen called Green Belt from Kansas to Indiana. And some of the projects didn’t work out, some did. But ultimately that company we after almost a decade, we sold off the projects and other folks are advancing those projects today. And now I’m running a company called Grid United, which is as and I might suggest, working to connect grids. So we have a number of projects to connect the Eastern grid with the Western grid, a project to connect ERCOT to the west. And we have you know, we’re we’re back at it and 25 people with a great backer, kind of John Arnold, who is based here in Houston and has pretty broad experience in the energy space. And we’re we’re, you know, optimistic that we’re going to get some interesting projects on the boards here.
Bill Loveless [00:06:40] Well, I look forward to talking about this new project. You know as well as what you learned back in your days with with Clean line. But, you know, we’ve. When we get into that, let’s make sure everybody understands sort of the nature of transmission capacity in the United States these days. I think it’s important to recognize the lay of the land. That is how the U.S. grid is organized. It’s fragmented, Michael, isn’t it? And like any infrastructure, it needs upgrades from time to time, especially now. What’s what’s driving those needs?
Michael Skelly [00:07:15] Yeah. So if you think about how the grid evolved, we started off connecting resources with cities. One of the first lines was from Niagara Falls to Buffalo with that Nikola Tesla help put together. And then over time, we built we started connecting cities to other cities because the network effect gives you more resilience and allows for more efficient dispatch of energy. And that we sort of evolved to a state regulatory paradigm. The nineties, we moved to, you know, these things called Artas or regional transmission organizations that now plan the grid on a, you know, multi-state basis. We still have three grids. We have the eastern grid, the western grid. And then in Houston, where we have ERCOT, which is, you know, we Texans have do our thing here. So we have a grid all of our own. And if you think about sort of the progression of how the grid has evolved over time, the one thing that hasn’t happened and is more necessary than ever for reasons I’ll talk about a second, is we haven’t really connected those three grids to one another. And that is one of the areas where we’re focusing. We’ve got a number of other projects underway as well. But one of the areas we’re focusing is is connecting these grids. And you do that through high voltage, direct current lines. And we we believe that that’s one of the sort of biggest opportunities in terms of improving reliability, resilience, integration into resources and so on.
Bill Loveless [00:09:14] And when when you talk about transmission, I mean, the ownership of transmission lines varies, right? Sometimes it’s an independent company like your own, but most often it’s local power providers who are doing that.
Michael Skelly [00:09:28] That’s correct. I mean, I don’t have the exact percentages, but, you know, 90 some facade of transmission lines in this country are built by the belt owned and operated by the incumbent utility. And they’re paid for through basically rate of return on those assets as approved by either state commissions or the FERC.
Bill Loveless [00:09:57] Right. Right. And one other thing, while we’re doing sort of some one on one type issues here, let’s make sure everyone understands what our high voltage direct current lines, because that’s what that’s what you’re working with. How do they compare to alternating current lines and how prevalent are their use for transmission in the United States and other countries, for that matter?
Michael Skelly [00:10:19] Yeah. So alternating current lines, as the name suggests, you have the current switches, direct, positive or negative every 60 times a second or 60 hertz. And for direct current lines, you don’t the current doesn’t alternate. You have to basically two wires. Once a positive poll at what we call them polls are the wires, a positive poll and a negative poll. And then you convert to from the you know, when you connect to the AC system on one side and the AC system on the other side, you convert, you have these big converted stations that convert from AC DC. And then at the other end it’s DC back to AC. Now the advantage of of high voltage direct current is it’s more efficient over long distances. That’s one big advantage. And the other big advantage is that you can connect to asynchronous grids so that east and West and ERCOT and other grids are not on the same. They’re all at 60 hertz, but they’re not linked up together. And if you want to stick them up together, you actually have to go through this conversion process to DC from AC, DC and DC back to AC. So the advantages are the main advantages are more efficient, connect asynchronous grids. But the other big advantage particularly is the new new types of DC converters, is they give a lot of stability to the grid and you can provide reactive power, you can provide instantaneous response to move power back and forth. You can, as you know, built for AC power kind of flows wherever it wants, but with DC power you can effectively direct it and push it in one direction or the other direction. And that’s a very, very valuable thing for the grid, particularly as we as a generation mix evolve.
Bill Loveless [00:12:27] Yeah, and while these lines aren’t these high voltage direct current lines are not prevalent in the in the United States, they’re not it’s not something that’s new either, right. I mean, I’m thinking of there’s been a line out in the Pacific right on the West Coast that’s brings hydropower from the Pacific Northwest down to California to Los Angeles.
Michael Skelly [00:12:48] Yeah, that’s that’s exactly right. So there’s the Pacific end or tie was built originally thought of in the in the early sixties. JFK actually announced it and that it was ultimately finished in the early seventies. And it at its early purpose was to move hydro down to L.A., as you suggest, over time, that line has evolved. And today what that line does is, you know, what is it probably doing right now here at, you know, on a Friday morning at 11 Eastern, it’s as the sun comes up in California, it’s probably starting to send power north. Okay. Because there’s an excess of solar power in Southern California or there will be in a couple of hours and that power will show up in the northwest. And then this evening you’ll probably see some hydro and wind flow south as they are as people in Los Angeles, you know, come home on a Friday night and turn on the television or whatever else they’re doing is load kind of peaks. And as the solar drops off in Southern California. So nobody thought that would happen when one of the Pacific Towers built, but that’s what it does today. And that, I think, is it’s a sort of an interesting case study in the evolution of use cases of a of a transmission line. Like we don’t really know what the generation makes is going to happen or what’s going to look like in 40 or 50 years. But we do know that if we have this sort of infrastructure in place, we’ll have a lot more choices.
Bill Loveless [00:14:32] Yeah, And so that’s a good example of the potential for these sorts of long distance lines. And there are some others in the works right now in different parts of the country. But still there’s a long way to go when it comes to tying together these different grids that we have in the United States. And it and it comes at a time when there’s been a succession of laws, laws now the Inflation Reduction Act, the infrastructure. Bill. Even the energy policy bill that was passed back in 2020 that provide a lot of incentives for things like transmission that recognize the need for new transmission in this country. And yet the implementation of these laws remains to be decided for the most part, and is lost, may drive new and significant changes in the electricity sector, much as you described what happened out in the Pacific Northwest. So with that uncertainty, amid the incentives that are also there, how difficult is it now to plan new transmission projects?
Michael Skelly [00:15:37] Well, let me let me come back to that question and just a second, Bill. In terms of the difficulty of of doing transmission, the the most to the incentives that we saw and the Inflation Reduction Act and the infrastructure bill were focused around incentivizing new types of generation because of some particular the infrastructure bill or some incentives around build that building of transmission. But it’s actually work, I think, I would argue were kind of an interesting moment on transmission, where a lot of big projects are about to happen. Sandia, which is a 3000 megawatt line from New Mexico to southwest Arizona that’s in construction site prep is underway, the equipment is ordered and they’re off to the races. Champlin, Hudson And that project started 15 years ago. Champlin Hudson, backed by Blackstone and originally developed by a company called TDI from basically from that from Canada, Canadian Hydro down to New York City that’s now you know equipment order and financial close achieved they’re off to the races are both Trans West Express which is Wyoming to Vegas and Green Belt Express which is Kansas to Indiana. Both of those projects have ordered equipment and they also look like a go. So there’s a lot happening. I mean, if you add up those projects and the associated generation, I mean, you’re talking just off the top of my head, you know, like $40 billion of new stuff. And part of the reason that’s happening is, well, they’ve been at it for a long time and, you know, ten years plus, I think, in just about every case. But also the incentives and the Inflation Reduction Act around, you know, with what tax credits and so on, basically in place for the next decade or so that can give the transmission developers some certainty. Like, okay, we know if when we come online in five or six years, the incentives will be there. And so that’s that’s been pretty important. So it’s kind of an exciting time, too, as you think about that sort of success that we’re starting to see in this in this space.
Bill Loveless [00:18:15] And Mike, and just to be clear, these are all these projects you’re talking about high voltage, direct current lines which are crossing states.
Michael Skelly [00:18:24] Yes, correct. These are all high voltage direct current lines. They’re all two states, sometimes three or four states which, you know, even like five years ago, somebody said, well, we’re going to have this boom in 2023 and all these projects are going to come out if and once and multi-state, etc.. I think a lot of people were a bit skeptical that that would happen. But now we’re we’re actually seeing this unfold. And I think that but yeah, there’s a few reasons. One is this sort of certainty around long term incentives on the production side and a keen interest of, you know, consumers of electricity, utilities and so on to to get new types of of energy on the system. So one kind of noteworthy thing about that is that these are all independently owned transmission. So we talked about it ago about like who owns the grid and who builds the grid. It’s typically utilities. But now we’re seeing this wave of independence. I think that, you know, if utilities. Start and off. And we’ve seen this in electric power that like it’s the independents that they’re the first to do gas turbines they’re the first to do when they were the first to do solar. Then utilities come along and start doing the same thing. I think we’ll start to see the same thing in that in the long distance transmission arena as well. I mean, we just signed up our our elite just announced that participation with us and one of our connections between the Eastern and Western Grid, a project called North Points Connector between Montana and North Dakota, and elites going to participate in that. So I think we’ll see more of that where the utilities get figuring out ways to get involved in this and this sort of big, big trend of things.
Bill Loveless [00:20:28] Yeah, tell us about that North Plains Connector. It’s it’s a recently announced project, as I understand it, and it is unique in some aspects.
Michael Skelly [00:20:38] Yeah. So this is a project between Montana and North Dakota. So the Montana point is a place called Colstrip, which is at the eastern terminus of two 500 KV lines that come out of the Pacific Northwest connecting to central North Dakota, both of which are, by the way, energy rich areas. Okay. And what’s also happening is Bonneville has long term plans to upgrade Bonneville Power Administration to upgrade the path going west, and that by So as BP and others have plans to upgrade the grid going east from North Dakota. So when you connect these two grids, what happens is when you have an extreme event in one place, for example, in North Dakota, then power can come in from the West. Okay, so like winter storm Uri, it would have been a very powerful thing to have power from the northwest because winter storm URI, while its effects extended over many hundreds of miles, it did affect the northwest. So they had power available. Similarly, when I when Seattle and Portland were under a heat dome and had a huge need for power, our line would have been able to export power to the West because myself and SVP had had plenty of power at that time. So there’s big reliability benefits in projects like these. And I guess to tell you a little bit more about the project, it’s about 400 miles. There’s probably 600 different landowners that that were working with lots and lots of different government agencies. Two states, you know, eight or nine different counties that we work with, etc.. So it’s a you know, it’s obviously a complex undertaking.
Bill Loveless [00:22:38] Right. And what I think stands out for my reading about this proposal is it would be the nation’s first transmission connection between three regional U.S. electricity markets, the MIT, the so-called midcontinent independent system operator, the Western Interconnection and the Southwest Power Pool.
Michael Skelly [00:22:57] That’s correct. That would have would have one connection to the West, if you will, to Colstrip. And then when we come east, we have one connection to the to myself and another to SVP. And that that also helps with the reliability story.
Bill Loveless [00:23:15] Does it make a big difference to be partnering with a lead to a company that is engaged in in competitive and regulated power markets in the upper Midwest?
Michael Skelly [00:23:32] Yeah, we think it well, Allete operates a DC facilities themselves today they have a line that goes from roughly our eastern terminus and myself all the way to Duluth, another roughly 500 miles. So they’ve been operating that DC line since the seventies. They have filed with the Minnesota PUC to upgrade that line to around 900 megawatts and bring in new state of the art equipment because the old stuff is, you know, 50 years old now with vacuum tubes and so forth. So they have a lot of experience in that. And they also have, you know, they’re involved in all types of energy. And North Dakota, they have a mine. They have well, they’ve got hydro, they’ve got all types of energy sources, lots of experience with transmission. So having involved in the project, somebody has been on the scene for, you know, 120 years. We we do think that’ll be helpful.
Bill Loveless [00:24:39] Well, you know, of course this transmission. Project isn’t your first rodeo and this business right to you. As we discussed before you, you’ve been behind big transmission projects in the past, including with the your previous company, Clean Line Energy. And and you and you ran into a lot of difficulties there. In fact, as we know, there’s a book about this experience called Super Super Power. I have a copy of it sitting next to me here by the journalist Russell Gold. Tell us about that experience and why it’s relevant to the work you’re doing today.
Michael Skelly [00:25:15] Yeah, well, you know, what’s the old adage? Experience is what you get when you don’t get what you want it off. So I think I think we were probably a little bit early, to be totally honest, Bill. I mean, back then we knew transmission was necessarily new. It needed to happen, but not everybody held that view. And I think you now see I mean, you know, I talked about some of the other projects that are getting into construction over the next year or two, that sort of evidence like how the bubble came. But we were we were a little early.
Bill Loveless [00:25:54] I just want to I just want to look back in that. I mean, as I recall and I did a little bit of reporting on this back when I was with Platts, and that was a project that seemed timely. There was, you know, suddenly this understanding, I think, that there was this massive amount of wind power down in the in Oklahoma and other parts of the country that could serve markets in the east, including the Tennessee Valley Authority and throughout the southeast. And one of your projects would have brought, I think it was called Plains and Eastern would have brought power from Oklahoma to to Memphis and and distributed it or allowed its distribution from there. You had laws that had been passed at the time, including one that gave the federal government the authority to step in and designate corridors and and in effect, overrule states if they objected unreasonably in the eyes of the federal government and others to a project. And you had that support from the Department of Energy. But even with all of that, you ran into trouble.
Michael Skelly [00:27:05] Yeah. Yeah. So the biggest issue that we had so we did reach an agreement with the Department of Energy. And then when the DOE administration came in and they said they weren’t going to, you know, they weren’t going to abide by that agreement anymore. So that was obviously a big I think that was a bad day at the office, needless to say.
Bill Loveless [00:27:28] You got the approval from the Obama administration and then you’re referring to the transition to Trump administration.
Michael Skelly [00:27:34] And when Secretary Perry, what came out is like, now we’re not going to do this anymore. So, yeah, that was a bad day. And, you know, like, that’s a risk in this business, Bill, is that if you if you have a change of administration, you know, you can find yourself in a tough spot. And so you you really have to be prepared to sort of weather that. And we think that the things that we’re working on today are, well, what you know, we’re like we don’t know what’s going to happen in 2024, but we think that’s a put it this way, Bill. I think the consensus around transmission is now broad enough. Okay. Because we’ve seen what happens when you don’t have a good grid. Okay. In terms of resilience and reliability, I mean, like winter storm Uri and even just in December, Winter Storm Elliot, that had a huge financial cost. And I think there’s a kind of a more mature understanding of like, okay, if you build transmission, it’s got lots of different uses and we really need it and we really need to modernize the grid. So, you know, call me overly optimistic, but I think we could even in a different administration, we’d be okay.
Bill Loveless [00:29:07] But the my impression is that they’re they’re still lacking the sort of regulatory structure you need in the United States to facilitate long distance lines across many states, because within these markets, they they they they manage grids, the operators manage grids differently based on what they consider to be their important local needs. There’s still the sort of not my backyard approach to the. These projects where, for example, in New England, efforts to bring in hydropower from Quebec have been stymied by opposition within New Hampshire and within Maine, two lines that would cross their states to deliver the power to, say, Massachusetts. And while the federal government had that authority to sort of step in some years ago, I’m not sure where that authority lies now, if it’s still relevant, it seems to me it ran into legal problems as well, didn’t it, from some states objections. It just seems to be sort of a very uncertain landscape right now for proposing and developing these long distance lines.
Michael Skelly [00:30:19] Well, as I mentioned, there’s a number of projects that are in construction or are about to go into construction that that, you know, encompass multiple states. So you can get through it. It’s not easy. It’s not for the faint of heart or light of wallet. Okay. Nor short of patience. But it is happening. We can certainly improve upon that. You know, some of the examples that you cited of projects that, you know, like the project from Hydro-québec into the Maine that branded, you know, NextEra Energy. Ironically enough, they fought it tooth and nail and they fund that a big opposition campaign, as did some of the other generators. So that was a pretty unfortunate thing to have happened and not something, you know, those internecine battles are not good for anybody. But other projects, I mean, they’re they’re happening. And yeah, I think you point out an important dynamic. Well, this is not easy. There are a lot of discussions happening right now in Congress about the overall difficulty in building infrastructure in the United States. And, you know, we may see action in the on the House side very soon here on an energy slash permitting bill. On that, you know, we’ll see how much state that bill does or the House version does to address some of these issues on the transmission side. I do think on the Senate side, with there’s a stronger interest in transmission, but not that that that the House is unaware of it. But I think they’re kind of looking to the Senate to sort of take the lead on that part of it. So, you know, we may see some bipartisan consensus around getting getting infrastructure built. We’ll see.
Bill Loveless [00:32:21] Yeah. I mean, what is it that I agree the permitting does seem to be getting continues to get attention in Washington. So Secretary Jennifer Granholm said down at Ceraweek that, you know, discussions on this topic are active, I think was her description of it. What is it that you look for in terms of federal policy to make this whole process easier?
Michael Skelly [00:32:53] Yeah. So let me just start with what we look for in general. Okay. So what we look for is high value opportunities, projects that are some. So these grid degree connections are immensely valuable to the grid. They make they provide resiliency benefits, they provide market efficiency benefits. You’re familiar that from production cost savings vital like a line that might cost $2 billion but have production cost savings in the many billions of dollars. So that’s sort of the first thing that we look for, is is this valuable to the system? And the other thing we look for is like, is somebody else going to do this? Okay. So we’re more keen on, you know, some would call it additionality, things that like the incumbents maybe are they would like to participate in, but for various reasons, because they take too long or too much development capital, whatever, they’re not doing that. So we look for those types of opportunities as well. And that’s reflected in the projects that, you know, that we’ve chosen to work on. We think the incumbents will ultimately get involved like we saw we’ve seen with Allete. But, you know, it just takes a little while. So that’s what we look for, first of all. And then then you think so back to your question, which is like, what is the role of the federal government in all this? We think that we need more. And FERC has done a little bit in this direction that, you know, we got to think about the grid in more national terms. And today, coming back to some of the previous discussion, we plan the grid on a regional basis through these regional transmission organizations. They don’t plan the grid. They don’t plan very much between each other. So south west. Paul and PJ, they don’t really plan very much together, nor myself and PJ. However, where you are seeing some interesting developments. So there’s a set of projects called the GTA. Q Joint transmission Interconnection. Q I think it’s called Between my Store and SVP, and there’s about $2 billion of projects that they have proposed and are working on and trying to figure out how to find the way to enhance connections between stuff with powerful and big content. So that would be immensely helpful in terms of efficiency, reliability, etc.. And so that sort of inter-regional cooperation, we’re starting to see a little bit of it, but we need a lot more. And FERC can play a role there. And I think if, as the Department of Energy sort of figures out which sorts of projects it might want to back it, there’s you know, hopefully they’ll they will, you know, see fit to to to help support projects that are that that that encourage this sort of inter-regional cooperation, if you will.
Bill Loveless [00:35:54] Right. And, of course, you know, the Federal Energy Regulatory Commission has ongoing proceedings looking at this issue from what I see in various news accounts. There’s still a lot of differences of different opinions about how FERC should proceed, what it should focus on and what sort of new regulatory steps it might take. You know, the independent operators raised a number of questions about what that should be, and their positions are often different than what companies like yours or others are voicing. You know, as these proceedings go on, it seems there’s still a ways to go into the sort of regulatory direction is straightened out.
Michael Skelly [00:36:37] Yeah, that’s fair. We’ve got a lot of work to do.
Bill Loveless [00:36:40] Yeah. What about the this question of where the federal government should be able to step in? I mean, is it still considered a legitimate consideration that the federal government should be able to come in and identify corridors and and try to set certain parameters to get projects going within those corridors, even though there may be some questions raised by states and others?
Michael Skelly [00:37:05] Yeah, You know, I got to tell you, but we’re not spending a lot of time on that. Were our our projects were. We have a very, very heavy focus on, you know, try to get to right away in place first and then work through state authorities. I’d say, you know, we’re not in an eye mode nationally to to, you know. Either ask or provide the federal government with more power. So we’re trying to work through, you know, first instance with landowners and then the counties and states and so on. What we do need is a little bit more federal leadership on permitting. Okay. So even if we do all those things, inevitably we run across some BLM land or some other federal land that creates a federal permitting nexus. And so it would be very helpful to see a little bit more leadership on that front in terms of moving processes along. But in terms of the national government, you know, or the federal government using siting authority to sort of acquire rights of way, we’re not we’re not really focused on that right now.
Bill Loveless [00:38:18] Okay. Well, you know, you mentioned leadership. And I recall a conversation that Russell Gould, who again, wrote Super Power had with Jason Bordoff on this program a couple of years ago. And Russell was recalling that when it came to that Pacific entity that we talked about earlier, President Kennedy and then President Johnson really took stepped out and advocated strongly for those projects. He cited it as an example of where the federal government can play a strong role in this case right at the very, very top. How important is that sort of leadership in Washington to these projects now?
Michael Skelly [00:38:54] I think initiatives like Fast, Fast 41, which is like a federal permitting initiative to, you know, prioritize projects and accelerate projects through the process. Those are super helpful. Are we going to see another? Franklin Roosevelt. Bob met with Bonneville Power Administration and TVA and so on. Yeah, I don’t know. I don’t know if that’s if we’re ready for something quite that bold. But a, you know, sort of concerted federal effort to move projects along. No guaranteed outcomes, but move things along through the process. That would be helpful. I mean, not just in transmission, but, you know, other types of projects as well.
Bill Loveless [00:39:43] Yeah, I guess it raises the question you often hear raised these days of, you know, can we build big things anymore?
Michael Skelly [00:39:51] That’s a big question. Absolutely. You know, you.
Bill Loveless [00:39:54] Take a pretty broad view. And I before we go, I’d be interested and your observations, when you look across other countries and what they’re doing in terms of transmission needs and long distance transmission, are there lessons we can learn from from Europe, from China, from other countries?
Michael Skelly [00:40:14] Yeah. So in the case of Europe, they’re they’re leaning in quite hard on transmission. I mean, they say that the importance of energy security really is like I’d say you obviously it’s a huge deal right now. And so they’re leaning it very hard on trying to create a better grid to support, you know, but taking better advantage of the of the resources that they have as opposed to Russian oil. They also said an interesting example that the Germans built an LNG receiving terminal in like less than 12 months. Okay. That is a phenomenal thing. And it sort of shows what you can do when you put your mind to it. Like we could do that as well or we’re not do it. We’re not building an import terminal building export terminals. But still, like that sort of sense of purpose is, you know, maybe something that we could learn a thing or two from. And on on the grid side, I think the other thing that they do a better job of in Europe is they take a better advantage of the existing grid. So in terms of, you know, dynamic line ratings and other, you know, grid optimization, topology and so on, they do a better job of that now, in some cases have a different regulatory paradigm where there’s like performance or instead of rate making and things like that where people’s incentives are better aligned. But yeah, there’s, there’s, there’s plenty to learn there.
Bill Loveless [00:41:48] Yeah. I mean, could that those technologies that enable the optimization of the grid of the power lines reduce to some extent the need for more long distance transmission? Or what about, you know, distributed energy solar as more people install solar as we see more solar on a in the utility systems, might that also reduce the need for long distance transmission?
Michael Skelly [00:42:18] Probably not much. I mean, I think we’re always going to be sort of a little behind on transmission, to be totally honest, given how much we need. But there’s actually been studies on this topic of like, okay, what if we did rooftop solar across the Eastern Interconnect? And then what if you rely more on sort of transmission or wind resources out of the Midwest? You kind of end up with similar grids. And if you go to the Americans for Clean Energy Grid website, they have a study on exactly this topic. So if because like let’s if everybody had a rooftop solar, you’re going to have a double curve. Okay. And a really good solution to a debt curve is to move that power somewhere else where the sun might not be shining or might be a different time of day. So a grid is you know, it has an advantage when it sort of no regrets solutions. I want to come back to your European example because there’s something I, I, I’m sort of fascinated by. Maybe your your friends at Columbia can take up a study of this. But in and in Europe or actually in the U.K., they have a very interesting system where they provide sort of the a minimum revenue floor to grid connections between the UK and Europe. Okay. And so they’ll give you sort of a very low rate of return so you can cover your debt, etc., etc.. And then if those lines prove valuable as shown by like the exchange of energy, then the owners of those lines can make a higher rate of return. And they call this thing this mechanism a cap and floor. And they’ve built $20 billion of new grid to grid connections that. In UK on the strength of this different regulatory paradigm. And the advantage of this, of course, is that the revenue requirements, i.e. what the customers have to pay, is reduced by almost 50%. Okay. And then if lines are actually and the and the rest of the art of the project is, is for what? By the developer who proposed it because that developer, that line is that useful and and as as shown by its positive of energy then that developers are not going to make any money. And I think coming up with mechanisms where we don’t ask ratepayers to bear all of the risk of some of these things is I think that would be a healthy step as well.
Bill Loveless [00:45:03] Yeah, that’s interesting. Well, it’s an interesting field in so many ways, transmission and it’s such a big need these days. Michael Skelly, thanks for coming on Columbia Energy Exchange to discuss this with us today.
Michael Skelly [00:45:16] Thanks, Bill. Great to be with you again and excited for all the topics that you are exploring.
Bill Loveless [00:45:28] That’s it for this week’s episode of Columbia Energy Exchange. Thank you again, Michael Skelly, and thank you for listening. The show is brought to you by the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs. The show is hosted by Jason Bordoff and me Bill Loveless. The show is produced by Stephen Lacy and Aaron Hartig from Post-Script Media. Additional support from Daniel Prop, Natalie Volk and Kyu Lee. Roy Campanella is the sound engineer. For more information about the podcast for the Center on Global Energy Policy, visit us online at Energy Policy dot Colombia dot edu or follow us on social media at Columbia U. Energy. And you can read a review the show on Apple or Spotify. You can also let us know what you think by tweeting at us. If you really like this episode, share it with a friend or a colleague. It helps us reach more listeners like yourself. We’ll see you next week.
States’ net zero and clean-energy goals are requiring the electricity sector to reduce emissions. Getting there means building new renewable energy projects and then connecting them to cities. But the grid is congested and needs more capacity for renewables and secure power supplies. New transmission lines could solve that problem.
Private transmission developers are looking to build high-voltage, direct-current lines across multiple states. Among them is Michael Skelly. A decade ago, his company Clean Line Energy attempted to do this. Now he’s back with another venture, Grid United.
More cross-country connections would boost reliability and help get more renewable energy online. However, addressing different regulatory environments, stakeholder interests, and landowners—an important part of the process—make interstate transmission hard to build. Even with these challenges, long distance projects have been making headway.
So, why is it important to build transmission across the country? Why are private developers taking on the task? And what’s causing these projects to gain momentum in recent months?
This week host Bill Loveless talks with Michael Skelly about the nation’s transmission needs and how the development landscape has changed over the years. They discuss why momentum is growing to build more multi-state lines.
Michael is the founder and CEO of Grid United. The company is currently involved in the North Plains Corridor project, which would be the first transmission connection between three regional U.S. electric energy markets in the Midwest, West, and Southwest.
On June 1, 2023, Dr. Melissa Lott, Director of Research and Senior Research Scholar, testified before the Senate Energy and Natural Resources Committee on electric reliability in the United States.
To achieve the Paris Agreement goals, the global buildings sector must achieve net-zero emissions by 2050, and all new buildings must be net-zero carbon starting in 2030.