Bringing Clean Energy to New York City
Almost a decade after Hurricane Sandy devastated New York City, local residents faced yet another challenging climate year. Record-breaking heatwaves and deadly flooding overwhelmed power grids, leaving thousands without electricity. These challenges encapsulate the broader climate crisis that threatens not just New York City – where fossil fuels generate close to 90% of the city’s electricity – but the world. Tackling it will require both real commitment and trillions of dollars of investment.
At Blackstone, sustainability efforts help us create stronger, more resilient companies and long-term value for our investors. We are putting our capital to work by investing in businesses addressing the global climate crisis.
Our portfolio company Transmission Developers Inc. (TDI) is doing just that, putting New York State on the pathway to its Climate Leadership and Community Protection Act goals for zero-emission electricity by 2040 and carbon neutrality by mid-century. The New York State Energy Research and Development Authority (NYSERDA) selected TDI as part of its first-of-its-kind solicitation for renewable energy and transmission projects, known as Tier 4, to help build the Champlain Hudson Power Express (CHPE) – a 339-mile, underground renewable energy transmission project bringing hydropower to New York City.
We anticipate that CHPE will enhance sustainability for a stronger, more resilient New York. We also anticipate that the project will over time make energy more affordable for New Yorkers. Approximately 600,000 families – amounting to over 1.5 million residents – struggled to pay their energy bills in 2019 due to high electricity costs.ᶦ CHPE can help alleviate this financial burden and open economic opportunities.
CHPE will deliver energy that is not merely affordable, but reliable. Hydropower consistently generates energy, regardless of weather conditions, complementing New York’s existing intermittent energy sources like wind and solar. Additionally, the underground line will preserve New York’s scenic landscapes and avoid not-in-my-backyard critiques local communities often level at above ground infrastructure.
We at Blackstone are immensely proud of CHPE. Our commitment to long-term investments that can deliver value for our investors and communities we serve, combined with our deep expertise in infrastructure, uniquely equipped us to see this project to fruition. After being successfully awarded a cross-border Presidential Permit from the Obama administration in 2014, we partnered with several state agencies and other stakeholders to negotiate a joint settlement that allowed CHPE to proceed.
Additionally, we prioritized meeting with labor unions and environmental groups as part of our efforts to create lasting value. Their feedback guided us to adapt the project line, so it protected local species and avoided disturbing existing dormant contaminants. We also collaborated with them to design a $117 million trust fund to finance projects that will protect the Hudson and Harlem Rivers, Lake Champlain and surrounding environments, and a $40 million Green Economy Fund that will support clean energy job training.
The Champlain Hudson Power Express project embodies Blackstone’s long-standing conviction that sustainability strengthens companies and communities, which in turn generates value for our investors. We have committed over $15 billion in investments since 2019 that we believe are consistent with the broader energy transition. In New York, where we are headquartered, we oversaw the installation of more than 9,600 solar panels at StuyTown, the city’s largest residential community. We are eager to build on these investments and hope that CHPE will serve as a global model for effective investment in a cleaner energy future.
Learn more about these efforts in our 2021 ESG Update.
ᶦ Source: Understanding and Alleviating Energy Cost Burden in New York City, NYC Mayor’s Office of Sustainability and Mayor’s Office of Economic Opportunity, 2019 Report
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