US $5bn loan guarantee for key green power transmission link

The US Department of Energy (DoE) announced a conditional commitment to guarantee a loan of up to $4.9bn to Grain Belt Express, the Invenergy inter-regional renewable energy transmission line project with 2.5GW of first-phase carrying capacity.

The loan guarantee consists of $4.4bn in principal and $470m in capitalised interest, according to DoE’s Loan Programmes Office (LPO).

The high voltage direct-current (HVDC) line would bring wind energy 578 miles (930km) from southwestern Kansas east to central Missouri. Regulators in both states have approved the project’s first phase.

While this conditional commitment indicates DOE’s intent to finance the project, it must complete an environmental review.

Developer Grain Belt Express LLC, an Invenergy affiliate, must satisfy certain technical, legal, environmental, and financial conditions before DoE enters definitive financing documents and funds the loan guarantee.

In 2018, Invenergy bought the project from Houston-based Clean Line Energy Partners, which had been developing it for almost a decade.

The project’s first phase will connect three regional grids: the Southwest Power Pool (SPP), the Midcontinent Independent System Operator (MISO), and Associated Electric Cooperative Incorporated (AECI).

MISO operates one of the world's largest real-time energy markets. Its service territory includes the Canadian province of Manitoba, and all or parts of 15 US states: Arkansas, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, North Dakota, South Dakota, Texas, and Wisconsin.

SPP manages the electric grid and wholesale power market for the central US. It serves all of Kansas and Oklahoma, and portions of Arkansas, Iowa, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Texas.

AECI supplies bulk power to sex transmission cooperative member-owners. These, in turn, supply 51 local electric cooperatives in Missouri, Iowa and Oklahoma serving about 935,000 member homes, farms and businesses.

In a statement, DoE said phase one of Grain Belt Express would “significantly expand import and export capabilities between these areas.”

MISO, which is already a net importer of electricity, is expected to have a growing electricity supply gap as electricity demand grows.

Many more will be necessary given projections that electricity demand will soar in the second half of this decade from robust American economic growth, artificial intelligence, building and transportation electrification, cryptocurrency mining, data centre proliferation, and reshoring of manufacturing.

The second phase would extend Grain Belt Express further east through Illinois to Indiana.