EXPECT NEEDED WIRES

Electricity Transmission Infrastructure; Market Drivers and Barriers, Emerging Technologies, Key Industry Players, and Worldwide Growth Forecasts
David Barry and Clint Wheelock, June 30, 2010 (Pike Research)

"The electric transmission grid is a crucial component of modern society…[T]ransmission is the foundation that supports activity in virtually all areas of the energy sector. In order to reap the full benefits of renewable energy and smart grid technologies, the capacity and information-carrying ability of transmission systems must be increased substantially. Indeed, the global economy will be inhibited if the grid cannot keep pace with technology advances, changing demographics, and the competitive energy markets.

"… [I]nvestment in the [U.S.] transmission infrastructure is a critical priority… Considering that support for transmission development has spanned 20 years and four presidential administrations, it seems likely that this policy trend will continue…Pike Research’s analysis finds that four market drivers have the most impact on the development of transmission projects…[1] Reliability/capacity enhancements…[2]Renewable portfolio standards (RPS)…Economic projects…Replacement of infrastructure…"

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"However, opposition to new transmission projects is common. The biggest obstacles are issues related to siting new lines and the allocation of project costs… [T]his issue will continue to be problematic. With regard to cost allocation, some progress has been made…Pike Research believes that the FERC will replace its current case-by-case cost allocation approach with a more consistent formula by the end of 2011."

"The same forces that are stimulating overall investment in the electric power industry have fueled technological innovation in…several key transmission technologies…[1] Extra high-voltage and ultra high-voltage lines…[2] High-voltage direct current…[3] High-temperature superconducting cable and electronic components…[4] Fault current limiters…[5] Power electronics…[6] Wide area monitoring systems and phasor measurement units…"

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"Public policy, market forces, and technological innovation have all…[made transmission] more competitive and more adaptable…[and] there is a greater emphasis on specialized applications…The transmission market varies significantly by region. In some areas, huge amounts of capital are being spent to modernize and expand…Pike Research forecasts that the worldwide transmission market will grow by a compound annual growth rate (CAGR) of 1.5% during the forecast period (2010-2020). The majority of this growth will occur during the first half of the period, leading to modest or even declining growth rates for some regions in the second half of the period.

"In the United States, the electric power industry has committed substantial resources to expand and modernize its grid. Pike Research forecasts an overall growth rate for transmission expenditures of 1.3% for the period from 2010 to 2020. The CAGR for the first half of the forecast period is expected to be 3.5%, reflecting the nation’s commitment to renewable energy and competitive wholesale energy markets."