Focus on a New York City energy grid transformation infrastructure project. Objective: to provide low-cost renewable hydroelectricity to meet approximately 20% of the city’s energy needs.
New York is the most populous city in the United States. Generally considered the financial capital of the world, it is also one of the greenest in America, with a long history of using renewable energy sources. In 2021, the city ranks 5e ranking of American cities for its energy efficiency policies. New York State ranks 5e country rank in terms of the amount of electricity produced by renewable sources.
New York City and State continue to set ambitious clean energy goals. The city predicts that renewable sources will represent 70 to 80% of its electricity network .The State plans to reduce greenhouse gas emissions 40% by 2030 and at least 85% by 2050.
However, to achieve these ambitious goals, the city must address the lack of available sites to develop renewable energy sources both in the city and in the state of New York. To solve this challenge, New York City turned to Canada. The Champlain Hudson Power Express (CHPE) is a transmission line high voltage direct current over 325 miles that will transport 1,250 Megawatts of clean, renewable hydroelectricity directly to New York.
The CHPE line located on the American side of the border, is connected to the Quebec Line, transmission line on the Canadian side of the border. The CHPE route begins connects to the Quebec line under Lake Champlain, and extends south to a converter station in Astoria, Queens, New York. The line passes through underground and underwater routes. Buried, the CHPE avoids the visual impacts of airborne transmission along New York’s scenic landscapes and minimizes environmental and social impacts.
Societe Generale’s expertise in financing infrastructure and the energy transition, Societe Generale played a leading role in the financial support of this major project (as Coordinating Lead Arranger, Deal Contingent Hedge Provider, and LC Issuing Bank for this ~US$6.0 billion transaction). This is the largest transaction in the renewable energy sector in North America.
The CHPE will bring New York closer to its energy transition goals, providing more than 10.4 TWh/year of low-cost renewable hydroelectricity, which represents approximately 20 percent of NYC’s energy needs.
When completed, the CHPE is expected to contribute significantly to the goals set by New York City and State. The project should reduce each year carbon emissions by about 3.9 million tons, and local air pollutants by almost 20% statewide.
Over the first 25 years of the project’s lifespan (expected 80 years), New York homes and businesses will save $17.3 billion in overall energy costs. The project is expected to create $21.4 billion in new economic activity and generate $1.4 billion in new statewide tax revenue.
As part of this historic operation, CHPE is delivering significant benefits across New York State by distributing funds to community partners, initiatives and municipalities. These include the Hudson River and Lake Champlain Habitat Enhancement, Restoration and Research Trust Fund, the Green Economy Fund (GEF), Rockland County Host Communities , and the Community Engagement Fund.
“The CHPE perfectly illustrates the objectives and values of Societe Generale”, said Eric Kim, Energy+ Team Leader for the Americas region. “We are proud to use our expertise in infrastructure financing and energy transition to help municipalities and their citizens benefit from a cleaner environment while reinvesting in the communities in which they live and work. This operation will modernize the network of one of the largest cities in the world and illustrate how creativity and innovation can generate better results”.
