Avangrid AGR announced that it received $425 million contract from the U.S. Department of Energy (“DOE”) to construct high-voltage transmission lines for the Aroostook Renewable Project. This high-voltage transmission line will connect 1,200 megawatts (MWs) of renewable energy to the New England power grid in Maine.

Construction of this high-voltage line by Avangrid is likely to relieve transmission constraints that have stalled the development of renewable resources in Northern Maine for years. This high-voltage transmission line is expected to assist in emission reduction in the region by bringing in a huge volume of clean energy to meet the rising demand in the region.

Importance of Transmission Lines

Transmission lines play a very vital role in the proper electrification of a nation, as transmission lines assist the utility operators in transporting the electricity produced from a remote unit to a sub-station for the ultimate use of the customers.

Transmission lines are the backbone of the entire electricity system and development of a new transmission line is a lengthy process. A new transmission line requires a huge volume of investment and proper agreement among the commission, utility operators and land owners.

The pace of development of transmission lines in the United States is moving at a slow pace compared with what is required from the development of the clean energy projects. The utility-scale renewable projects are traditionally located in remote regions far away from the place of ultimate usage, so the high-voltage transmission lines are required for the proper distribution of clean electricity and to lower congestion at the grid.

The new transmission lines can also assist in reducing emission levels as these will encourage the utility operators to develop new large renewable projects and shut down fossil fuel plants.

The DOE announced an investment of $1.5 billion in four transmission projects that should improve grid reliability and resilience. This support from DOE should help in the development of more than 1,000 miles of transmission line and support 7,100 MW of new clean energy generation.

Utilities Invest in Transmission Lines

Exelon Corporation EXC is among the largest transmission and distribution utilities in the United States. The company decided to invest $9.7 billion in electric transmission during the 2024-2027 period to further strengthen EXC’s grid and provide proper services to its customers.

American Electric Power Company AEP also has a large transmission and distribution network. The company already has a strong network. To further expand operation, the company aims to invest nearly $27.3 billion in AEP’s transmission and distribution business during the 2024-2028 period to construct a more efficient grid and deliver customized energy solutions to its customers.

AGR’s Stock Price Performance

In the past year, shares of AGR have gained 31% compared with the industry’s 39.2% growth.

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AGR’s Zacks Rank

AGR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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