It goes without discussion that there is a clear trend toward an increased demand for electricity. This tendency has not only had repercussions on a more intelligent approach of the grid, it has also had impact on all the elements related to the power system. In Frost & Sullivan Research Analyst Laura Elena Ortuño’s last article, “Grid Modernization: The Social Factor,” the North American advanced meter infrastructure (AMI) market was addressed. Ortuño’s briefly analyze below how the underground cables market is also being pushed toward a path of modernization, as well as the different forces that will shape the evolution of this market.
There are multiple factors that explain a possible transition from overhead transmission and distribution lines to those underground, particularly in urban and distribution systems. The prevailing driving force is the urgent need to guarantee reliable electricity supply, which has caused an exponential demand for higher efficiency power systems and equipment, as well as more demand for renewable energy. In this sense, the integration of renewable energy (as is the case of wind farms) is expected to incite the replacement of aged infrastructure, which is considered obsolete with newer, more reliable underground power lines.
According to Frost & Sullivan’s recent research, the North American underground transmission and distribution cables market is equal to $946.4 million as of 2011. The various advantages of underground lines are expected to impact the low, yet continuous expected growth of the market. The various benefits and virtues of underground lines include:
• Longer life span of the lines due to their reduced exposure to external factors such as storms, high winds, falling trees, among others;
• Minimized maintenance costs due to the limited exposure of these lines—they are less likely to require repairs;
• Past research has found that outages in underground power lines are 50 percent less likely to occur compared to those in overhead lines; and
• Aesthetically, these lines are not visually contaminating and are usually preferred in urban areas.
In addition, while some utilities are usually pressured into installing underground lines due to the various benefits obtained from their construction, most transmission lines in the U.S. are overhead. It is important to take into account that underground transmission lines are significantly more expensive than those that are overhead; they usually cost eight to 10 times more. Additionaly, underground distribution lines cost four to six times more than overhead. The high costs related to the installment of underground transmission and distribution lines should be taken into account.
As the grid becomes smarter and efficiency becomes a prerequisite, underground systems are expected to take over the obsolete infrastructure. Nonetheless, in a depressed economic context, accompanied by high costs of raw materials (copper, aluminum, polyethylene, etc.), the commencement of these projects is expected to have some delay (although maintaining continuous growth) and will depend highly on the political and regulatory context, as well as the tax credits available.
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