Houston firm looks to build DC power lines in AC world - The Tell - MarketWatch

Houston-based Clean Line Energy Partners thinks big. The three-year-old energy infrastructure developer plans to gather permits and rights-of-way for new multi-billion-dollar transmission lines to carry electricity from the U.S.’s vast wind power resources in the middle of the Lower 48 to the population centers on the coasts. The lines would cost up to $8 billion to build, under their latest estimate.

It’s a mammoth undertaking, with Clean Line’s staff of about 40 people focused on engineering, public hearings, and reams of paperwork to satisfy regulatory requirements from local municipalities to the U.S.’s Federal Energy Regulatory Commission.

One way Clean Line’s proposal differs from other transmission methods is in its use of direct current transmission instead of alternating current. Nearly all of the big power lines in the U.S. operate on alternating current, or AC, a method that won a big fight more than 100 years ago between AC booster Nikola Tesla and Thomas Edison, a proponent of DC.

Michael Skelly, Clean Line’s co-founder, and Jimmy Glotfelty, a former director of the George Bush Administration’s energy transmission office, argue that DC lines would save money. Since DC lines carry more power per cable than AC lines, only one row of towers would be needed to handle the power load instead of a row of three-across for AC lines.

In another boost for DC lines, China has embraced the technology and is moving ahead with DC transmission lines for its new grid, they said.

“We have enough wind to power the country many times over,” Skelly said in an interview.

So far, Clean Line Energy Partners has drawn investor support from the Zilkha family of Houston as well as ZBI Ventures, a unit of Ziff Brothers Investments, which is the principal vehicle of the New York-based Ziff family. Terms of the financing have not been disclosed.

Skelly said Clean Line continues to bear down on the regulatory process but that once the company gets its approvals as expected by 2014, it shouldn’t have too much trouble raising capital to build the lines.

“One Clean Line project would enable and deliver the same amount of electricity as three Hoover dams,” Skelly said. “We’ll have access to an ocean of investor money once the permits are set up.”

While Clean Line Energy Partners has lofty goals, it’s not easy to get big infrastructure projects up and running nowadays. But if they manage to clear some of the bureaucratic hurdles, the favorable corporate debt market could be a boost to their plans.

–Steve Gelsi

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