April 26, 2013 / 12:35 AM / 5 years ago

Clean Line Energy to buy New Mexico renewable power-line project

HOUSTON (Reuters) - Clean Line Energy Partners LLC has signed an agreement to acquire Power Network New Mexico, a proposed 200-mile, 345-kilovolt transmission line designed to transfer renewable power resources from New Mexico to Western U.S. states, Clean Line said on Thursday.

Power Network and the New Mexico Renewable Energy Transmission Authority (RETA) have been developing the Power Network line, also known as the Central New Mexico Collector System, for several years, said Michael Skelly, president of Houston-based Clean Line Energy.

Clean Line said the acquisition of the Power Network from GS Infrastructure will be completed following regulatory approval from the Federal Energy Regulatory Commission. Details of the deal were not disclosed.

The proposed line will collect 1,500 megawatts of renewable power from east-central New Mexico and move the power to the existing electric grid near Albuquerque where power can move to markets in the western United States.

The project is separate, but complements one of Clean Line’s larger transmission projects, called the Centennial West Clean Line project.

The Power Network line could attract investment of more than $2 billion in renewable generation and transmission in New Mexico and improve reliability of the state’s grid, Clean Line said.

Skelly said he expects demand for renewable power to grow across the western United States as coal plants are retired and states increase mandates for wind and solar power.

In California, additional rules to reduce use of ocean water to cool power plants and to limit greenhouse gas emissions also favor more use of renewables, Skelly said.

“We think any one of a number of variables will continue to help boost renewable demand in California,” Skelly said.

California is on track to meet an interim requirement of 25 percent renewables by 2016 and is well-positioned to meet a 33- percent goal by 2020, according to a California Public Utilities Commission report issued last month.

While California is working to fulfill its 33-percent renewable mandate by 2020 with generation located in the state, any increased reliance on renewables will require a diverse mix of wind and solar-power imports from out-of-state, Skelly said.

“You’re better off with a mix of technologies and a mix of geographic resources,” he said.

Skelly declined to disclose the cost to build the power line, but said it will be in the “hundreds of millions of dollars.”

The much larger Centennial West Clean Line project is designed to move 3,500 MW of renewable energy from New Mexico and Arizona to California at an estimated cost of $2.5 billion.

“Centennial West will take longer to develop than this project,” Skelly said.

Centennial West is one of four major direct-current transmission projects proposed by Clean Line around the nation.

As the cost to build solar and wind generation declines, lowering prices to utilities, transmission becomes more attractive, Skelly said.

“The cheaper the resource gets, the more worthwhile it is to go get it,” he said. “It makes transmission more compelling.”

New Mexico RETA, created in 2007, is one of eight state-level electric infrastructure authorities focused on developing new transmission and energy storage projects to promote development of renewable energy resources.

By statute, 30 percent of the energy transmitted by any RETA-supported project must come from renewable sources.

Reporting by Eileen O'Grady in Houston; Editing by Bob Burgdorfer

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