As part of the Biden-Harris Administration’s Investing in America agenda, the Department of Energy (DOE), through its Loan Programs Office (LPO), has announced a conditional commitment for a loan guarantee of up to $4.9 billion ($4.4 billion in principal and $470 million in capitalized interest) to Grain Belt Express to help finance a 2,500 MW HVDC transmission project (Grain Belt Express Phase 1).
The interregional transmission line is expected to cover approximately 578 miles from Ford County, Kansas, to Callaway County, Missouri, upon receiving approval.
Grain Belt Express Phase 1, a project covered by FAST-41, will provide access to new domestic energy and transmit it to customers across the central U.S. The line’s use of HVDC transmission technology and interregional configuration will promote the reliability and resilience of electric delivery.
Kansas and Missouri have approved Grain Belt Express Phase 1 based in part on the economic development benefits it will bring to both the states.
The project will connect three regional grids: the Southwest Power Pool (SPP), the Midcontinent Independent System Operator (MISO), and Associated Electric Cooperative Incorporated (AECI). Grain Belt Express Phase 1 will expand import and export capabilities between these areas.
MISO, which is a net importer of electricity, is expected to have a growing electricity supply gap as electricity demand grows.
The National Transmission Needs Study, published by DOE’s Grid Deployment Office, estimated interregional transmission capacity between SPP and MISO regions is expected to be increased by up to 1000% to meet demand by 2035. Grain Belt Express Phase 1 will contract with customers through voluntary agreements. 39 municipal utilities across Missouri have contracted for transmission service on the project.
Grain Belt Express Phase 1 will have bidirectional capabilities, allowing power to be transmitted in either direction, which will improve the grid’s resilience and flexibility.
The announcement ensure that, in support of the Justice40 Initiative, 40% of the overall benefits of certain federal investments in climate, clean energy, and other areas flow to disadvantaged communities. LPO borrowers are required to develop and implement a comprehensive Community
Benefits Plan (CBP), which ensures borrowers engage with communities and labor groups to create jobs and improve the well-being of the local community and workers.
As a part of LPO’s financing, the construction of Grain Belt Express Phase 1 is expected to create about 1,110 direct jobs through the onsite prime construction workforce, as well as many additional jobs in construction management, engineering, procurement, commissioning, logistics, and other scopes.
The loan guarantee will be offered through LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for innovative energy and supply chain projects and projects reinvesting in existing energy infrastructure. The Grain Belt Express Phase 1 project is estimated to reduce GHG emissions by 3.1 million tons of CO2 equivalent annually.
DOE is expected to complete an environmental review, and the borrower should complete certain technical, legal, environmental, and financial conditions before the department enters into definitive financing documents and funds the loan guarantee.
