Power Transmission: Beneficiary Stimulus Package?

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Suppliers to the power transmission industry are in the most frustrating of positions. It is universally accepted that the nation’s power network is in serious need of upgrading. Indeed it was infrastructure failures that led to power failures in New Jersey and New York during the summer of 2003. Nearly all the states have mandated a percentage of power must be generated from renewable resources as this interesting article in the New York Times explains. Following a focus on energy issues during the election campaigns, it was widely expected that the new administration would require all states to produce between 10 and 15 percent from renewable sources within a few years. Some states have already had significant success. Texas and New Mexico, for example, have each generated 4.5% of their energy from wind turbines and 6% from wind and solar respectively already but many others are way behind targets set earlier this decade. Clearly Texas and New Mexico benefit with good sites for wind turbines, plenty of sunshine and wide open unpopulated spaces (where planning consent can be more readily achieved). Currently however the biggest obstacles for all the states are the difficulty of securing debt financing (all the costs for renewable energy are up front capital costs) and the lack of an efficient transmission network to collect the power from these remote sites and take it to urban populations.

The power companies may like to add discounted government loans to the wish lists currently flowing into Washington to fund a massive overhaul and roll out of the country’s power transmission infrastructure. Producers and fabricators of steel would welcome the investment as would producers of EC grade copper and aluminum transmission cables. Lead times on structural steel are almost nonexistent at the moment, the biggest delay would be the bureaucracy associated with planning consents, but if ever there was a time to secure a favorable reception to a planning application generating jobs and domestic metals consumption surely this is it.

–Stuart Burns

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