The innovative project is the brainchild of Transmission Developers Inc., a company created by former Bay Street investment banker John Douglas.
Since selling his wind power company Ventus Energy Inc. for $140-million in 2007, Mr. Douglas has embarked on startups in the power sector. In 2008 he financed the creation of Riverbank Power Corp. a company that proposes to build several huge, multibillion-dollar underground hydroelectric generating stations in Canada and the United States. Transmission Developers was spun out of Riverbank last year, and its plans are no less ambitious.
TDI’s key project is a $3.8-billion underwater power transmission line that would run 570 kilometres, bringing electricity from Quebec – and possibly Labrador – to New York City. A 100-km spur would run up Long Island Sound to Connecticut.
For most of the route, the cable would be buried along the bottom of Lake Champlain, then down the Hudson River, with small portions buried along railway lines to avoid disturbing PCB-laden underwater sections.
There are many regulatory and financial hurdles still to be dealt with, but the proposal is expected to meet with less resistance than building above ground transmission lines which are far more visible to the public.
TDI also has plans for a 240-km underwater cable carrying renewable power down the Atlantic coast from Maine to Boston.
Mr. Douglas said the idea for the underwater power line technology, which uses high voltage direct current to minimize power loss, was developed by Montreal engineering firm Groupe RSW.
That company came to him with the idea for Riverbank’s technology, which involves water falling down lengthy shafts to generate power underground, and the water being pumped back to the surface at times of the day when electricity prices are low. Essentially, that allows the storage of electric power.
RSW is a small shareholder of Riverbank and TDI, while Mr. Douglas owns the majority of both firms. His key outside backer at both companies was New York investment firm BlackRock Inc., while another deep-pocketed investor, Blackstone Group, now also has a substantial stake in TDI.
Both Riverbank and TDI involve “great Canadian ideas” which require U.S. financial support, Mr. Douglas said.
He is talking to other large investors about further financing of both companies, and they may consider going public to get the big money needed when construction begins. Mr. Douglas hopes some of those funds will come from Canada. “It just seems a shame that these great ideas keep having to go south of the border to get financed.”
Still, Mr. Douglas has a number of Canadians helping him with the venture. The chief executive officer of TDI is electrical engineer Don Jessome, a former manager at Emera Inc., the Halifax-based energy firm.
Former Ontario premier David Peterson is on the board, and he introduced TDI’s executives to former New York governor George Pataki, who helped them stickhandle that state’s bureaucracy.
But there are many hurdles before TDI gets any cable in place, and not just financial ones. Hydro-Québec, for instance, is supporting a new transmission line through the Northeastern United States, and that could compete with TDI’s planned route for Quebec power exports.
Still, with the growing emphasis on renewable energy, there will be a need for both new transmission facilities and power storage, Mr. Douglas said. Both Riverbank and TDI together “will really help North America achieve its renewable energy objectives, which are pretty ambitious.”