Building more long-distance transmission lines will be key to the US clean-energy transition.
(Bloomberg) — John Arnold, the billionaire philanthropist who made his fortune trading commodities, is betting that building more long-distance transmission lines will be the key to the US clean-energy transition.
Arnold said he’s committed “several hundred million dollars” to Grid United, a joint venture he co-founded with transmission pioneer Michael Skelly, to acquire land, easements and the permits needed to build power lines that can stretch for hundreds of miles. They’re seeking to break a longstanding challenge in the industry where regulators, utilities, customers and investors are wary of projects that haven’t already secured necessary approvals.
He’s moving ahead even though building long-haul transmission lines is notoriously difficult in the US. Projects typically cross multiple state and local jurisdictions as well as privately owned land, and failing to win approval from every stakeholder can scuttle the entire venture. They also need multiple federal and state permits, a time-consuming process that can often lead to years of delays. Adding transmission capacity to the US grid will be a critical component of the energy transition, especially since the landmark Inflation Reduction Act is expected to deliver a major boost to clean energy investment.
“We are trying to break this chicken and egg cycle by acquiring the land position first,” Arnold said. “We hope this both compresses the timeline and makes it easier to develop a successful project, but it comes with significantly greater financial risk.” He declined to be more specific about the amount he’s investing in Grid United.
Read More: Billion-Dollar Power Lines Inching Ahead to Help US Grid
Houston-based Grid United has announced five projects and has as many as five more in the works, and Arnold said the company is actively buying up land for three power lines. Each of these massive overhead electric highways can cost $1 billion to $3 billion and can carry 1.5 gigawatts to 3 gigawatts. One gigawatt is enough to power about 200,000 Texas homes, and as many as 800,000 homes in parts of the Midwest that use less energy. That capacity will be crucial to carrying clean energy from wind and solar farms that are expected to be built across the US with incentives from the IRA.
“If you can’t build transmission, a lot of what the IRA was geared towards is not going to get built,” Arnold said.
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