Anbaric Transmission commits to the pre-development phase of a proposed transmission project, called the Green Line Project. As part of the pre-development, Anbaric Transmission will expand the initial project concept in two ways: (1) increasing the project size of its Green Line Project, a high-voltage direct current (HVDC) transmission system, from an intended 800 to an intended 1000 megawatts (MWs), and (2) expanding the intended length of the line so that it will facilitate the importation of hydroelectric energy from Canada.
This Commitment is the first phase of The Green Line Project, a transmission line that will move 1000 megawatts of renewable electricity, across more than more than 300 miles, using an HVDC system that combines overhead transmission in a narrow terrestrial right of way with a submarine cable that bypasses the congested coastal areas between northern Maine and Boston. The combination of wind energy from northern Maine and hydroelectric energy from Canada provides southern New England with a unique 1000MW infusion of reliable, firm and yet renewable electricity. Anbaric will design the Green Line to be capable of allowing hydroelectric energy to fill the Green Line with electricity at times when the wind does not blow.
The estimated capital cost of the eventual construction of the Green Line will be $2 billion. With the Green Line, Anbaric will pioneer a new form of financing: institutional investors such as pension funds and insurance companies will finance the project directly, rather than through intermediary structures like infrastructure funds. With direct investment, Anbaric Transmission can lower the cost of equity in the project, which in turn can save the ultimate consumer hundreds of millions of dollars in financing charges over the life of the project. This aligns the needs of pension funds for long-term stable returns with the needs of their infrastructure projects for long-term patient capital.
It is estimated than when the Green Line project is completed, it will provide a myriad of benefits to 7,065,530 electricity customers (the total sum of all ratepayers in ME, NH, VT, MA, RI, and CT) in the form of lower electric rates and reduced CO2 and other emissions. It is estimated that the development of the project will create 4,550 green jobs (350 full-time and 4,200 part-time).
It is also estimated that the Green Line, once operational, will displace 8,760,000,000 kWh/year of CO2 emitting resources, which equates to the displacement of 4,668,947 metrics tons of CO2 per year.
It is extraordinarily difficult to build a new transmission project in the northeastern region of the United States. That difficulty has made it impossible for the New England states to be confident they can meet their renewable portfolio standard (RPS) commitments. In recent years, states like Massachusetts and Connecticut have changed their electricity procurement programs in order to reliably meet their RPS commitments. In addition to these state-level commitments, Anbaric must also adhere to elaborate and strict guidelines for transmission projects from federal regulators (the Federal Energy Regulatory Commission, or FERC).
To meet new state and federal guidelines, Anbaric has developed a new strategy that will be instrumental in successfully meeting the New England State's RPS targets. The strategy entails five steps:
(Step 1) Anbaric Transmission selects Green Line's Transmission Customers: That selection is not a typical business transaction: it is a FERC-regulated process. The Green Line's customers can be either electricity suppliers or buyers. Due to the location of one end of the line in northern Maine, it's highly likely the supply customers will be Maine-based wind generators and suppliers based in or near New Brunswick. Due to the location of the other end of the line (Salem, MA), the buyers are likely to be utilities or large wholesale consumers.
(Step 2) Green Line competes in the state-administered procurements to renewable energy: There are a number of renewable procurement initiatives in New England in 2013-2015. Both Massachusetts and Connecticut will issue "RFPs" (requests for proposals) for large-scale renewable energy. There is also a multi-state effort to launch a coordinated procurement under the aegis of the New England State Committee on Electricity (NESCOE). Anbaric Transmission believes the Green Line resources - wind plus hydroelectric energy delivered by a state-of-the art transmission line into Salem, MA will have an excellent chance to win these competitive procurements. Anbaric Transmission believes selections will be completed by October 2015.
(Step 3) Permitting and regulatory approvals will begin in Fall 2013 and conclude in Fall 2015. Deliverables include permit and regulatory approvals as they are issued by the permitting and regulatory authorities, including state and federal environmental agencies such as the Maine Department of Environmental protection, the Mass. Environmental Policy Authority, and the U.S. Army Corps of Engineers, as well as state and federal energy agencies, such as the Maine Public Utility Commission, the Mass. Department of Public Utilities and the Federal Energy Regulatory Commission.
This concludes the pre-development work for the transmission project. The next steps of the larger project, potentially to be made as a subsequent commitment, include financing to pay for the construction of the project (expected to close in November 2015) and construction and commercial operation, which is predicted to break ground November 2015 and conclude May 2018.
In regards to financing, the estimated capital cost of the Green Line will be $2 billion. Anbaric Transmission has obtained indicative commitments for up to $350 million of the equity required for the project from a group of institutional investors including pension funds. Anbaric Transmission will raise the remaining amount in the debt markets when the project is closer to completion. Long-term debt from high voltage, direct current projects like Green Line has been eagerly underwritten by lenders due to their stability and credit quality. The project will be financed via 20 to 30-year contracts with utility or governmental agencies in southern New England.
America's dependence on electricity is greater than it has ever been in history. There is also a strong desire to use more renewable energy. Unfortunately, places where renewable energy can be generated, especially by wind, are located far from where consumers live and the electric grid, necessary to deliver that electricity, is either aging or inadequate. New, more flexible and efficient transmission lines are needed. The further deployment of advanced High Voltage Direct Current technology (HVDC) in the U.S. will help bring large-scale renewables located in remote areas to urban areas.
HVDC systems have been in use around the world since the 1950s. The first application in the U.S. was the 846-mile Pacific DC Intertie in the 1970s that connects the hydro-electric power generated in the Washington state's Columbia River basin with the city of Los Angeles. Historically, the primary advantage and use of HVDC systems has been their ability to move power across long distances with less energy loss than normally occurs on alternating current (AC) systems of similar size. Over the past 15 years, however, use of the technology has been applied to meet different challenges to the U.S., including use of DC submarine cables that allow electricity to be delivered to places which are too distant for AC cables and too congested (and unsightly) for overhead wires.
The largest potential for wind generated energy (estimated at well over 2,000 MWs) in New England is in the state of Maine. This potential is limited by a lack of transmission lines needed to move electricity to southern New England (particularly greater Boston), where most of the demand for electricity is located. Hydroelectric energy from Canada is also a desirable resource that has had great difficulty finding transmission paths that can access the southern New England markets.