John Sullivan
John Sullivan is President of ABB Power Technologies Division, USA.

W-G: USING LAST YEAR’S MASSIVE BLACKOUT AS A BACKDROP, W HAT ARE THE PROSPECTS FOR THE U.S.T&D EQUIPMENT MARKET GOING FORWARD?

JS: The short answer is we’ll see an increase in spending. But to truly understand how the blackout will impact us going forward, you first have to look at the market conditions that existed prior to its occurrence. Anyone who has been following this industry knows that U.S. spending, to a large extent, has been hampered by a number of uncertainties brought about by restructuring - including regulatory issues, asset ownership, and return on investment.

Prior to the blackout, only absolutely critical transmission projects went forward. Granted, there were some areas of growth. There’s been substantial spending on IT infrastructure to meet the needs of the still-emerging Independent System Operators (ISOs) and Regional Transmission Operators (RTOs). And we also had the relatively high IPP spending bubble in 2000 and 2001.

But generally speaking, U.S. business was slow before the blackout, with public power, government and investor-owned utilities spending about $3 billion annually. As a result, I believe the real impact of the blackout is that it will drive everyone - from the federal government with the energy bill down through the state regulatory bodies-to move more quickly than they were before to try to resolve the uncertainties.

How will that impact the U.S. T&D market going forward? We will see an increase in spending. The question that remains, of course, is how much spending will occur and when. That will be a function of the amount of time and the level of reliability agreed to by the key players—the federal, state and regulatory organizations. If they set the grid reliability bar high, and the time to achieve it is short, there could be some substantial spending in the near term .

W-G: ASSUMING THE UNCERTAINTIES ARE RESOVED , HOW WILL THE GRID IMPROVEMENT PROCESS UNFOLD?

JS: I believe the primary focus—at least initially—will continue to be on applying technologies and services that improve the existing infrastructure. If we depend solely on putting more lines across new spaces, the costs will be just too insurmountable in the short term. Legitimate environmental and regulatory issues will just be unsolvable.

On the other hand, if we can take existing infrastructure and apply proven technologies that can significantly increase our existing transmission system - some can nearly double the capacity of existing power lines - that will be a much more feasible and probable direction for the industry.

That’s why utilities are now placing a greater emphasis on asset management programs, life-extension programs and installing devices that improve the reliability of the already installed base.

We won a contract last September to help International Transmission Co. analyze and manage 2,500 miles of overhead and underground transmission facilities in southeastern Michigan. The project involves collecting and analyzing data on some 28 substations, 43 transformers, 700 circuit breakers, more than 6,000 relays, 50 battery systems, 200 buses, 12 reactors and more than 50 RTU SCADA systems. These analyses will then help them determine when and how to upgrade various parts of their system for maximum benefit when they’re ready to take the plunge.

W-G: WHAT ABOUT T&D EQUIPMENT SUPPLIERS? W H AT ARE THEY DOING?

JS: At ABB we’re changing our product lines to make them more suitable to today’s marketplace. For example, we’re taking a modular approach to many key transmission products — like substations, switch gear, and capacitor banks. In today’s competitive markets, time is quite often more costly than hardware. Today ’s utilities need to get power online and to their customers faster, less expensively and with less drain on their own engineering resources that ever before.

Our Raleigh, NC plant now allows customers to choose from a menu of components and apply them to a new generation of standardized, modular substations. The components can be assembled in any configuration - giving the customer the ability to customize the unit. Compared to traditional substations, these new modular designs can be built in half the time while still maintaining 100 percent functionality.

We delivered a substation to Keyspan Energy on Long Island, N.Y., in just four months. A few weeks later Keyspan had the equipment installed and ready to energize. So the entire project took less than five months. In the past, a custom-built substation would have taken 12 to 18 months to design, build and install.

We’ve even put a Configurator on our Website that allows registered customers to log on and literally create their own substation. The program generates layout and control drawings and bill of materials online. Suffice it to say, we believe modular components are the future of the industry.

W-G: WHAT ABOUT TECHNOLOGIES THAT INCREASE THE CAPACITY OF THE EXISTING INFRASTRUCTURE?

JS: Higher technology solutions, like flexible AC transmission devices (FACTS), high voltage direct current (HVDC) technologies, and gas-insulated substations will continue to emerge. FACTS and similar technologies allow more power to be pushed over the existing infrastructure, which allows you to address some of the grid reliability issues in congested are as without putting more wire in the air.

Overall, we’ve secured more than $90 million in FACTS equipment contracts in recent years for installations on both the east and west coast, as well as in the Texas grid. But many more are needed. High power application of chip technology pioneered over several decades has also produced high voltage direct current (HVDC) technology that can isolate parts of the grid from disturbances in adjoining are as, and/or provide adjoining areas with voltage and frequency support.

Last November, we commissioned an HVDC transmission system link that interconnected the United States’ eastern and western power grids. Since the two alternating current (AC) grids do not operate synchronously, the HVDC technology takes the AC from one grid, converts it into direct current, and then re-converts it into AC for the other grid. The back-to-back system is called the “Rapid City Tie,” because it passes close to Rapid City, South Dakota. It carries 200 MW of power and provides voltage and frequency support in case of disturbances in either of the two grids. We supplied the system as part of a joint project between Basin Electric Power Cooperative of North Dakota, and Black Hills Power of South Dakota.

W-G: WHAT ABOUT IT SOLUTIONS? WHERE DO THEY FIT INTO THE PICTURE?

JS: In every industry that has been deregulated, the investment in IT has gone up by several orders of magnitude. The power industry needs to catch up on IT investments to improve operation of the vast, interconnected U.S. grid.

We are getting there. We’ve developed a number of sophisticated IT systems in recent years that can make the grid more flexible, secure and reliable. We can, for example, significantly upgrade the grid’s monitoring, control and response capability by simply applying technologies like “wide area monitoring systems” (WAMS).

Our WAMS technologies - which have been deployed successfully in pilot projects over the past two years - use GPS satellite signals to accurately synchronize the measurement of information and perform analyses on system conditions, and indicate if system instabilities are beginning to occur.

These measurements can then be aggregated and compared to see if and where the system is beginning to be over-stressed. It’s even possible to monitor neighboring grids, giving operators crucial additional minutes to react to a disturbance and prevent it from spreading. As a leader in this technology, ABB testified in Congress on WAMS in late 2003.

W-G: WHAT OTHER NEW TECHNOLOGIES ARE ON THE HORIZON?

JS: You really can’t describe these technologies as new. Many, such as FACTS devices and HVDC have been around for some time. Again, the key issue here is applying them - having the will, the ability and return on investment.

But ABB is developing and building on its existing technology base. We’ve had HVDC technology for awhile and now we’re working on HVDC Light, which is a smaller version of HVDC that allows us to extend the practical and economic applications of the use of direct current .

Our first U.S. application was Trans Energie’s Cross Sound Cable project in 2002. The 35 mile HVDC Light system runs under Long Island Sound and links the New York and New England ISO grids-improving the reliability of each power supply system by making it easier for both entities to share generating plant capacity and provide emergency support. It also provides much needed electricity to Long Island and promotes competition in the New York and New England electricity markets by enabling electricity trade among power generators and customers in both regions.

The project is also noteworthy because the path for a traditional land-based transmission line would have adversely impacted more people and property - making the project, in all probability, difficult if not impossible to execute.

Beyond that, we recently received a Global Energy Award for supplying the world’s largest battery energy storage system (BESS) to a commercial operation in Alaska. It’s a 40 MW system that stabilizes the local grid by providing continuous voltage support during normal operation and backup energy during system disturbances.

During an emergency, the system can supply the grid with 40 MW of power for roughly six to seven minutes, or 27 MW for 15 minutes. Fifteen minutes is enough to cover the time between a system disturbance and diesel-powered backup generators coming online. The BESS is expected to reduce power outages in the area by 70 percent. Other benefits include reduced air emissions through reduced spinning reserve operations, reactive power support and improved power quality.

As technological options go, we believe BESS represents an extremely cost-effective and efficient alternative to traditional backup solutions, which require maintaining transmission and generation capacity in excess of that needed to satisfy normal demand. And it allows you to do so without stringing more wire.

By the way, since the battery is larger than a soccer field, it’s also been submitted to the Guinness Book of Records. It’s manufactured from recycled material by the Saft battery production company, is safe, reliable and will be recycled again at the end of its 20-year life cycle.

W-G: DO YOU BELIEVE THE BLACKOUT AND ITS AFTERMATH WILL SIGNIFICANTLY IMPACT THE T&D EQUIPMENT MARKET?

JS: Yes, I think it will. We’re optimistic that the net impact is going to be positive, in that it will remove much of the uncertainty that surrounds the whole issue of transmission investment. By reducing that uncertainty, we believe we’ll see significant investments to modernize the grid and move forward .

The power grid serving the United States and parts of Canada is a vast and complex network. It was designed to serve the reliability needs of large, vertically integrated utilities.

Today, we live in a world of Genco’s, Transco’s and load serving entities that are fiercely competitive. We have to make the grid more flexible in both design and operation.

And to achieve that level of flexibility does not necessarily mean we have to put more copper in the sky. We can achieve it by simply enhancing much of the system that’s already in place.