Source: S&P Global
Written By: Garrett Hering
Citing a historic opportunity for Massachusetts, private transmission developer Anbaric Development Partners LLC unveiled details March 19 of its proposed Mystic Reliability Wind Link. The network of subsea and underground cables is designed to transmit initially 900 MW to 1,200 MW of offshore wind power to the Boston area to help replace the output of state’s largest power plant, which is due to be retired in four years.
The proposal, which includes alternating current and direct current options, is one of several in response to ISO New England’s recent solicitation for new transmission resources to fill a grid reliability gap when Exelon Corp.’s 1,700-MW Mystic River 8 and 9 units retire in June 2024. The combined-cycle natural gas units are adjacent to a 573.5-MW steam turbine that runs on residual fuel oil or gas, and a 13.2-MW gas turbine.
The ISO said March 19 it received 36 proposals from eight qualified transmission project sponsors, with in-service dates between March 2023 and December 2026. The grid operator said it has until Aug. 26 to post a list of qualified proposals that will be considered in a second phase of the solicitation process.
Local incumbent utilities Eversource Energy and National Grid USA were required to respond to the solicitation and submitted eight separate proposals.
Anbaric said it is pitching “a groundbreaking return on equity,” which at 7.9% would be the “lowest ever in the region” and well below that of regulated transmission projects.
“It’s not been a bad business to be in the regulated transmission space,” Theodore Paradise, Anbaric’s senior vice president of transmission strategy, said in a March 20 interview, pointing to traditional returns that can exceed 11% in New England.
Anbaric’s major investor, the Ontario Teachers’ Pension Plan Board, “is willing to be more aggressive on the returns” than utilities, Paradise said. “We are way below where regulated transmission usually is but there’s a lot of other benefits to the region that also save money.”
That includes completion of the transmission project by June 1, 2024, to avoid an estimated $200 million to $300 million in costs per year for Mystic to remain in operation if an alternative does not come online by that time, Paradise said.
The initial project, from Plymouth, Mass., to Everett, Mass., where the Mystic plant is located, would create a pathway though state waters that could ultimately double offshore wind carrying capacity to 2,400 MW “at no additional cost,” according to Anbaric.
“Mystic Reliability Wind Link is 21st century infrastructure that will meet city, state and regional carbon reduction goals while strengthening the grid,” Anbaric CEO Ed Krapels said in a statement. “Once stakeholders compare Mystic Reliability Wind Link to other proposals … we believe our project will be seen as the best solution for the region.”
ISO New England plans to select the winning proposal by mid-2021