NextEra Energy Announces $18.4B Deal to buy Oncor from EFH
Florida-based NextEra Energy, moving fast after its bid for Hawaiian Electric Industries (HEI) was doomed only a few weeks ago, rebounded by making a move to buy Texas’ Oncor Electric Delivery Co. from bankrupt Energy Future Holdings (EFH) for about $18.4 billion.
Under the definitive agreement, a newly formed subsidiary of NextEra will acquire EFH’s approximately 80 percent interest in transmission-focused Oncor. The definitive agreement is part of an overall plan of reorganization that is designed to allow EFH to emerge from Chapter 11 bankruptcy, but the acquisition must be approved by the bankruptcy court (a ruling which had not come by press deadline for POWERGRID International).
If successful, NextEra would gain control of Oncor, which delivers power to more than 3 million Texas homes and operates about 119,000 miles of transmission and distribution lines in the state. As part of the transaction, NextEra Energy intends to fund $9.5 billion for the repayment of EFH debt, according to the company.
“We are incredibly impressed by Oncor’s management team and its employees, and we are committed to retaining the Oncor name, its Dallas headquarters and local management,” said Jim Robo, chairman and CEO of NextEra Energy, in a statement.
Robo added that his company will work closely with Oncor’s leadership team to file a joint application with the Public Utility Commission of Texas. Since 1999, NextEra Energy has had a presence in Texas, including Lone Star Transmission LLC, a transmission service provider.
The surprise announcement caps a whirlwind month for NextEra on the M&A front. In early July, the Hawaii Public Utilities Commission voted to not approve a two-year-old merger effort between NextEra and HEI.
The commission said NextEra and HEI failed to show the merger would be in the public’s interest. Members were concerned about benefits to ratepayers and the companies’ commitment to clean energy.
Oncor Electric Delivery has faced an uncertain future since EFH, formerly TXU, went bankrupt with $42 billion in debt. Only a few weeks ago, reports surfaced that Warren Buffett’s Berkshire Hathaway Energy might make a bid for Oncor.
Last year, Hunt Consolidated and partners offered to buy Oncor as part of EFH’s Chapter 11 bankruptcy proceeding in an estimated $20 billion deal. However, in May Hunt informed the Texas Public Utility Commission that it was backing out of the plan.
FERC Approves Empire State Connector HVDC Transmission Project
The Empire State Connector Corp. said the Federal Energy Regulatory Commission (FERC) issued an order preliminarily granting Empire’s request to charge negotiated rates for customers using transmission service on the proposed Empire State Connector (ESC), a 260-mile long high-voltage direct current electric (HVDC) transmission line. The approval will allow the company to conduct an open solicitation and capacity allocation process for all parties interested to subscribe for capacity.
“We can check off another important milestone for our proprietary transmission solution that will facilitate the physical delivery of renewable energy and capacity into New York City,” said John Douglas, Empire State Connector Corp.’s CEO.
The transmission line will allow load-serving entities in New York City more congestion-free access to upstate renewables and other resources at more competitive prices. The HVDC transmission line will be constructed and paid for by shippers who will contract for capacity. The upfront development costs will not be directly funded by ratepayers.
“There is no doubt in my mind that the ESC can be used to physically deliver renewable and zero-emission energy and capacity into New York City cheaper than the historical cost of transmission and generation. This is a game changer for New Yorkers,” said Douglas.
The ESC’s underwater route through the Erie Canal and Hudson River will also have no visual impact and low environmental impact.
The target in-service date for the project is 2021. oneGRID is developing the ESC.
Black & Veatch, Schneider Team Up on Microgrid at Marine Air Station
Black & Veatch and Schneider Electric USA formed a joint venture to design and construct an energy security microgrid at Marine Corps Air Station (MCAS) Miramar in San Diego. The microgrid solution will allow operations at mission-critical facilities to continue uninterrupted if the utility power grid is compromised or damaged.
The project design will be scalable to potentially power the entire installation and will manage electricity during peak usage. The microgrid will incorporate renewable resources, advanced smart grid control systems and demand response capabilities.
“Our extensive experience with power generation, energy storage systems and power distribution and smart integrated infrastructure uniquely qualifies us to provide reliable and resilient microgrid systems,” said Bill Van Dyke, president of special projects for Black & Veatch. “Partnering with Schneider Electric will help us deliver a sustainable energy solution to enhance energy security for MCAS Miramar missions.”
The microgrid will power several facilities at the 12-kV level during a utility grid outage and will use existing energy resources such as landfill gas, solar photovoltaic and energy storage systems for standard operations. Black & Veatch and Schneider Electric will provide a fully permitted 7 MW diesel and natural gas power plant, updates to the energy control systems and integrated microgrid controls. All elements will be designed and built in compliance with Department of Defense (DoD) security infrastructure and risk management requirements.
The new microgrid will integrate with the utility control system at Naval Base San Diego which will have redundant controls for additional energy security. The project is scheduled to be completed by July 2018.
“Through this unique joint venture, two worldwide industry leaders will deploy a team of experts that can deliver innovative, best-in-class, microgrid technologies that ensure reliability, resiliency and energy independence for our Marines and sailors under any circumstance,” said Daniel Vesey, U.S. Navy global account manager, energy and sustainability services, Schneider Electric USA.
This project directly supports a DoD initiative to deploy 3 GW of renewable energy throughout military installments by 2025.
More than 15,000 service members and their families reside at MCAS Miramar, which is home to Marines and sailors from the 3rd Marine Aircraft Wing.
Broadband 5G Deployment Forecasted to Begin in 2017
Mobile Experts LLC., an independent market analysis firm for the mobile infrastructure and wireless eco system, released new research recently, providing a specific forecast for pre-standard 5G deployment. The new forecast highlights the very specific plans of U.S. operators as they ramp up deployment of wireless broadband services.
“The standards won’t be finalized until 2020, but a few key operators have very specific plans during the next nine months,” Joe Madden, principal analyst at Mobile Experts LLC, said in a release. “American operators have spectrum already, and are pushing to move very quickly to use 5G for fixed broadband services. The size of these early deployments will be much larger than typical trials. We are expecting numbers that are more consistent with a wide commercial deployment.
“When we predicted a 5G focus on fixed broadband services in 2014, many of our customers asked us to forecast shipments. We have been resisting the impulse to release a forecast because most operators won’t be ready to go until 2020. However, the near-term opportunity has now solidified, and it’s big enough to move the needle.”
The “Mobile Experts 5G Research Service” report includes a deep technical view of the challenges to millimeter-wave radio implementation, as well as analysis of 5G network architecture options. Mobile Experts has estimated the cost of 5G networks and devices, and calculated the return on investment for operators considering investments in 5G broadband and 5G Internet of Things business areas.
Cal-ISO: Study Results Reveal Expanded Grid Will Allow California to Reach 50 Percent Renewable Goal by 2030
By Corina Rivera Linares, Chief Analyst, Transmission Hub
Final study results on the potential effects of creating a multi-state, regional electric market, released on July 12 by the California Independent System Operator (Cal-ISO), show that by expanding the energy grid, California would reach its 50 percent renewable energy goal while saving consumers up to $1.5 billion by 2030.
“The studies’ conclusions mirror the preliminary results showing the benefits of expanding the ISO market, advantages we predict will only grow over time,” Cal-ISO CEO Steve Berberich said in the July 12 statement. “We believe the findings in these studies will help drive the formation of a new, more efficient, cost-effective and greener western electric grid. It’s also clear that a regional grid allows California and other states to eventually exceed their renewable goals, including California’s (50 percent) mark.”
The studies, which were conducted on behalf of the Cal-ISO by The Brattle Group, Energy + Environmental Economics, Berkeley Economic Advising and Research LLC and Aspen Environmental Group, were required under the California’s Clean Energy and Pollution Reduction Act, or Senate Bill 350, which set the 50 percent renewable portfolio standard (RPS) by 2030, the Cal-ISO said.
As noted in the “Senate Bill 350 Study,” to undertake the analysis, the study team needed to make several foundational assumptions, including that the Cal-ISO’s Energy Imbalance Market (EIM) might expand to the regional market footprint with or without implementation of the ISO-operated regional market.
The study’s five baseline scenarios consist of two 2020 scenarios and three 2030 scenarios. For instance, the “2020 Current Practice” scenario reflects near-term market conditions-California has developed the necessary resources to meet its 33 percent RPS, and the Cal-ISO operates as-is, with no regional expansion. The “2030 Current Practice (Current Practice 1) scenario, for example, reflects longer term market conditions-California has developed enough renewables to meet its 50 percent RPS, with a current practice (in-state) procurement focus, and the Cal-ISO operates only its current footprint, without regional expansion, the study added.
Discussing key findings of the Senate Bill 350 analysis, with respect to California ratepayer impact, greenhouse gas and other emissions, economic and environmental impacts, and impacts on disadvantaged communities, the study estimated an annual net benefit to ratepayers of $55 million a year in 2020-assuming the regional market would include only the Cal-ISO and PacifiCorp. That benefit grows to a baseline net benefit range of $1 billion to $1.5 billion a year by 2030-assuming a large regional footprint that includes all of U.S. Western Electricity Coordinating Council (WECC) without the federal power marketing agencies, the study added.
The market simulations undertaken show that California’s energy policy initiatives will reduce the emissions of greenhouse gases associated with serving the state’s electricity loads, the study said. The estimated CO2 emissions associated with serving California retail electricity loads, including CO2 emissions from imported power, will be about 63.6 million metric tons by 2020. This is below recent historical levels of about 90 million metric tons per year in 2010-2013, and 107.5 million metric tons in 1990.
The study also noted that the impacts of a regional ISO-operated market are expected to create numerous and diverse jobs and economic benefits in California.
“We estimate that a regional market, growing from a (Cal-ISO) plus PacifiCorp footprint in 2020 to the larger regional market by 2030, will create 9,900-19,300 additional jobs in California, compared to current practice, primarily due to reduced cost of electricity,” the study said.
Furthermore, the analysis for 2030 showed that implementing a regional market increases the efficiency of investments in low-cost renewable energy generation, including investments in new wind and solar resources to meet California’s RPS, the study said.
Go to transmissionhub.com to read the full version of this story.
Grain Belt Express Wind Line Rejected by Missouri Regulators Despite High-Profile Support
By Rod Walton, Senior Editor
Missouri regulators have rejected a proposed wind power transmission line despite support for the project from the state’s top elected official and numerous companies.
For the second time in a year, the Missouri Public Service Commission (MPSC) has denied the Grain Belt Express Clean Line project developers’ application for approval to build the $500 million statewide leg of the project. Last summer, the MPSC denied certification for the 206-mile Missouri portion of the project.
The MPSC’s second denial cited Clean Line’s failure to file a notice prior to an application likely to be contested, according to reports. The project has run into opposition from some landowners over property rights concerns.
In between the state rejections, however, Missouri Gov. Jay Nixon and a host of companies that do business in the state have announced their support. Nixon cited new landowner protections and consumer savings as inspiration for his newfound favor.
Clean Line Energy Partners, developers of the project, estimated that it will pay about $32 million to landowners who have the transmission line running across their properties.
“With these new protections for landowners and millions of dollars in savings for consumers, the Grain Belt Express Clean Line is a good deal for Missouri,” Nixon said in a statement. “In addition to reducing energy costs, this $500 million construction project will also boost our economy and create good-paying jobs.
“I appreciate Clean Line for answering my call for these enhanced landowner protections and for ensuring the transmission line is built in a way that creates jobs and saves money for Missourians.”
|Courtesy Clean Line Energy Partners|
Meanwhile, companies with manufacturing facilities in Missouri sent a letter to the MPSC in support of the Grain Belt Express. Those companies, which employ more than 10,000 workers statewide, included General Motors, Target, Unilever, Procter & Gamble, Kellogg’s and Nestlàƒ©.
“Grain Belt Express Clean Line is an opportunity to provide our companies with a link to low-cost renewable energy at a scale that is meaningful,” the letter reads. “Access to renewable energy is increasingly important to our decisions about where to expand and to site new facilities.”
Missouri is the last of four states where approval is needed for the Grain Belt Express Clean Line. Kansas, Illinois and Indiana regulators already OK’d the project.
“Over the last year, we have made tremendous progress in developing the Grain Belt Express so that it will benefit Missourians for years to come,” Michael Skelly, president of Clean Line, said in a statement. Prior to the second MPSC rejection, he was hopeful “that the Missouri Public Service Commission will recognize the many long-term benefits that this project will bring to the Show-Me State.”
Last summer, citing landowner concerns, the MPSC voted 3-2 to block the Missouri portion of Grain Belt Express construction. It later denied a request for rehearing on the bid for certification.
The Grain Belt Express Clean Line is proposed as a 780-mile, high-voltage direct-current transmission system bringing approximately 4,000 MW of wind power from western Kansas to Missouri, Illinois and Indiana. The overall project cost is tabbed at close to $2 billion, according to reports.
Clean Line planned to begin construction as early as 2017, according to its website.
EYE ON the world
Swedish Utility Chooses Kamstrup as Smart Metering Partner
Kampstrup will supply 27,000 intelligent electricity meters to Swedish utility Vàƒ¤sterbergslagens Elnàƒ¤t AB over the next three years, the companies reported.
In the coming years, Swedish utilities are facing the second wave of smart meter rollouts and Vàƒ¤sterbergsla-gens Elnàƒ¤t AB is among the first in the country to embark on this next step of the smart metering journey, according to the release. The need for a reliable partner in for the long haul was one of the deciding factors behind their choice of Kamstrup, according to Bo Sàƒ¶rberg, CEO of Vàƒ¤sterbergslagens Elnàƒ¤t AB.
Kamstrup’s supply is not limited to the 27,000 electricity meters, but also includes the OMNIA smart grid platform, which will give Vàƒ¤sterbergslagens Elnàƒ¤t AB the possibility to test and remotely read heat meters. As part of the turn-key solution, Kamstrup will supply meters, communication infrastructure and software as well as handle meter installation.
With the OMNIA solution, Vàƒ¤sterbergslagens Elnàƒ¤t AB will be able to improve the service it offers its customers. Transparent billing and the potential to monitor their energy usage can help customers save energy and reduce their spending. In addition, the OMNIA solution will provide the utility with data to analyze and optimize grid performance and increase efficiency.
“Kamstrup has a strong local presence in Sweden, both in terms of product development and project management, as well as service and support”, said Filipe Vasconcelos, Kamstrups’ system sales and project group manager for electricity systems. “Our end-to-end metering solutions are tailored to the unique and changing needs of each customer and we look forward to working closely together with Vàƒ¤sterbergslagens Elnàƒ¤t AB to prepare them for future challenges”.
The process of replacing VB’s meters will begin in the next few months with the project expected to be completed within three years.
|Swedes signing smart metering deal (courtesy of Kamstrup): In photo from left to right: Bo Sàƒ¶rberg, CEO, Vàƒ¤sterbergslagens Elnàƒ¤t AB; Annika Viklund, senior vice president, Vattenfall Distribution; Anders Nystrup, head of sales, Kamstrup; Filipe Vasconcelos, system sales and project groupmanager, Kamstrup AB|
TenneT Investing $6.6 Billion into Dutch Grid
Offshore Wind Biz website reported that growth in renewable energy capacity in the Netherlands and surrounding countries has prompted TenneT to make plans for major grid investments.
The transmission system operator will commit some $2 billion for the expansion and replacement of Dutch high-voltage grid on land and will pour approximately $4 billion into the country’s offshore grid projects over the next 10 years.
The investment in developing and building the grid at sea is related to the connection of 3,450 MW of planned wind farms off the coasts of Zeeland and Holland to the national grid.
The capacity of power connections between the Netherlands and its neighboring countries in the coming years is expected to look as follows:
“- Belgium: 2,400 MW from 2019
“- Denmark: 700 MW from 2020 (COBRA cable)
“- Germany: 2,450 MW in 2017 and approximately 4,250 MW in 2020 (increase through Doetinchem-Wesel 380 kV, Meeden-Diele and Flow-Based market coupling)
“- Great Britain: 1,000 MW (BritNed cable)
“- Norway: 700 MW (NorNed cable)
TenneT added that it is committed to collaborate with other grid operators in Europe as much as possible to achieve a single integrated (Northwest) European energy market.
EDF Seeking Buyer for Stake in RTE French Transmission
French power utility EDF hopes to sell a 50-percent stake in Europe’s biggest high voltage direct current (HVDC) transmission system, according to news reports.
Reuters and Le Figaro reported that state-controlled EDF controls all of RTE, which operates nearly 100,000 kilometers (93,200 miles) in HVDC lines that route about 494 billion kWh in electricity annually. RTE is valued at 6 to 7 billion Euros, according to the report.
EDF was said to be heavily in debt and wanting to sell non-core assets while investing in its nuclear power business. The French firm is one of the partners in the Hinkley Point nuclear reactor project in the UK, which may cost 25 billion Euros to complete, according to reports.
EDF has reported that it would consider a government-backed multibillion-euro financing package. The company has an agreement in which it must sell the stake to another state-run company.
RTE is one of two EDF Group-controlled companies that handle transmission and distribution services in the region. It carriers high-voltage flows, while Enedis distributes medium and low-voltage to end users.
RTE also acts as the interconnector with the power grids of neighboring countries through 46 cross-border power lines, contributing to overall security of supply and efficient operation of the European power supply system. It was created in 2000 as an independent function of EDF. By next year, the company says it will have spent 2.4 billion Euros on grid reinforcements.