On July 22, 2011, the Atlantic Wind Connection ("AWC"), offshore transmission line project off the Mid-Atlantic coast that would bring thousands of megawatts of offshore wind capacity ashore (see the October 12, 2010 edition of the WER), announced that Belgium-based transmission company Elia has taken a minority stake in the project and will be providing consulting services to the AWC. Elia is Europe's fourth largest transmission company and has extensive experience building underwater transmission lines to offshore wind farms. Elia has been involved in several high-profile offshore wind projects in Europe, where there are multiple large-scale wind farms in operation in several countries today.
Elia will join Google, Trans-Elect Development Company, LLC ("Trans-Elect"), Good Energies, and Marubeni Corporation ("Marubeni") in the partnership to develop the Atlantic Wind Connection. As a minority stakeholder in the $5 billion project, Elia has agreed to take a 10 percent stake in the first segment of the five segment project, and then take a 5 percent stake in each of the four remaining segments. The AWC project is designed to bring up to 7,000 megawatts of wind energy ashore and is the first high-voltage, direct current ("HVDC") offshore transmission project that has been proposed in the United States. Accordingly, Elia's expertise should be very valuable to AWC as they have been a key player in the development of thousands of megawatts of offshore wind farms in Europe and are now playing a key role in the development of Europe's "Super Grid," a $40 billion transmission project that will interconnect Europe and regions around its borders with a HVDC power grid. This project is a similar concept to the proposed AWC project, as it is designed to bring vast amounts of renewable energy resources ashore. The management of AWC believes that the addition of Elia's expertise will bring synergy to the project that is needed to ensure its success.
The AWC first announced its plan to move forward with the project in October 2010 and was granted incentive rate treatment by the Commission in May, despite opposition from utilities, state regulators, consumer advocates, and electricity market players (see the January 31, 2011 edition of the WER). The granted incentive rates will give the project a return on equity of 12.59 percent. However, AWC claims that the transmission backbone created by the project will save Mid-Atlantic electricity consumers $1.6 billion a year and provide transmission for clean, offshore wind energy for a long time.
Read more at Renewable Energy Insights by Troutman Sanders LLP.
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