The New Green Investment: Building Massive Transmission Lines to Deliver Clean Power
U.S. cities are on a mission to reduce their carbon footprint and meet ambitious emissions targets, but are currently facing one major roadblock: they cannot access the power generated by wind and solar farms located hundreds of miles away. Despite an increase in renewable energy production in remote sites, cities are unable to connect to the power grid.
To solve this problem, a group of investors has placed their bets on EnergyRe – a startup that builds massive transmission lines to transport renewable energy from remote sites to urban areas. Launched by executives at real estate giant, Related Cos, EnergyRe has recently received $1.2 billion from a group of European investors to expand its scope of operations, ultimately assisting U.S. cities in their fight against climate change.
High Voltage Transmission Line Permits a Major Roadblock to Climate Goals
With the Biden Administration promoting the shift to renewable energy sources, the outdated national power grid is incapable of accommodating the increasing amount of clean energy being generated across the country. In a bid to wean off fossil fuels and shift towards renewable energy in the U.S, cities are facing major roadblocks for transmission projects: local resident objections. The permitting obstacles faced by high voltage transmission lines needed for moving renewable energy from one site to another, adds to the already significant backlog of projects waiting to join the electric grids. The Lawrence Berkley National Laboratory reports that these projects represented approximately 90% of the total projects waiting for permission in 2020.
To mitigate this issue, more companies, including EnergyRe, are launching transmission projects. An $11 billion collaboration with Blackstone, energyRe, and the state of New York, launches a 175-mile underground transmission line to bring power from a group of upstate wind and solar projects to New York City. Denmark funds Glentra Capital and PKA and investment manager of Novo Nordisk Foundation, controlling shareholder of pharmaceutical company Novo Nordisk, lead the group of investors backing EnergyRe. This government funding is intended to prioritize projects that circumvent obstructive permitting snarls, such as the New York transmission line, which utilizes land controlled by the state, and a 350-mile transmission line built on railroad tracks to carry power from Iowa to the Chicago area.
Springing Up Across the Country
More than a dozen transmission projects are currently being conducted throughout the country, including a 339-mile transmission line that will carry hydropower from Quebec to New York City, led by Blackstone. Besides, the Energy Department has recently made a $1.3 billion commitment to three proposed transmission lines from National Grid, Grid United, and Berkshire Hathaway.
Higher Interest Rates and Costs for Clean-Energy Businesses
Similar to other clean-energy businesses this year, EnergyRe will also have to confront higher interest rates and costs. Despite this, they expect to absorb expenses through tax credits from the climate law. The startup was created in 2020, after receiving financial backing from executives at Related, who understood the need for clean energy in cities due to local regulations and demand from industries. Jeff Blau, Related’s CEO and Chairman of energyRe, disclosed, “It is such an evident problem and a huge opportunity.”
About Related Cos.
Founded by Miami Dolphin’s owner Stephen Ross, Related is the developer of lavish properties such as New York’s Hudson Yards, along with affordable housing and condos. The company took advantage of low-income tax credits for several years before the advent of clean-energy credits and transmission-funding programs.
Conclusion
The recent investment by European investors in EnergyRe along with other transmission projects across the country highlights the U.S. commitment to shifting towards renewable energy. The potential for renewable energy generation is not limited by location; however, restrictions on transmission line building and citizen objections obstruct necessary expansion. Nevertheless, alternative solutions like EnergyRe are making significant progress in mitigating these obstacles. The impact of transmission projects on the national power grid will eventually relieve overworked electricity grids, leading to stable and reliable supply of power, thanks to companies like EnergyRe.
Disclaimer:
The material in this article was compiled using the most recent Acts, Rules, Circulars, Notifications, Provisions, Press Releases, and material applicable at the time. The completeness and correctness of the material ensured with due diligence. It is required of users of this material to consult the relevant, applicable legislation. The data given may change without prior notice and does not constitute professional advice. As a result, Estabizz Fintech disclaims all liability for the results of using such material.
