A $7B power line from Kansas to Indiana moves closer to reality

After more than a decade of uphill regulatory battles, legal challenges and an ownership change, one of the country’s biggest clean-energy transmission line projects has cleared one of its last major hurdles.

The project is the Grain Belt Express — a $7 billion undertaking aiming to carry 5,000 megawatts of power more than 800 miles, from the windswept and sun-soaked western Kansas plains to hungry power grids in Missouri, Illinois and across the mid-Atlantic region.

The key go-ahead came from the Missouri Public Service Commission, which last week issued final approval for the project’s latest revised plan to deliver roughly half of its power to the Missouri power grid, then carry the remainder to the Indiana-Illinois border for delivery to Eastern U.S. energy markets. 

The U.S. is lagging in building the long-range transmission needed to meet federal and state-level clean energy goals. A report this week from the National Academies of Sciences, Engineering, and Medicine found that “[p]erhaps the single greatest technological danger to a successful energy transition is the risk that the nation fails to site, modernize, and build out the electrical grid.”

But it will be hard to speed up major projects like Grain Belt Express, which can take more than a decade from conception to completion. Against this backdrop, ​“what we received in Missouri last week is really a major milestone,” said Shashank Sane, executive vice president of transmission at Invenergy, the Chicago-based energy developer that bought the project from its original developers in 2018.

It’s not the final milestone, he emphasized. The project is broken into two phases — the Kansas-to-Missouri Phase 1, which it expects to start in 2025 and complete over the next two to three years, and a Missouri-to-Indiana Phase 2, for which it hasn’t yet set a start date.

Invenergy has acquired 95 percent of the land rights it needs for Phase 1, Sane said. It’s also actively negotiating for land rights to build the Tiger Connector — a 36-mile-long extension from a high-voltage direct-current collector station that will deliver high-voltage alternating current to the Missouri grid.

That connector is being built to satisfy Missouri policymakers’ demands for the project to deliver more power to the state in order to win approval. ​“They were very clear — resoundingly clear — on the benefits that Grain Belt can bring to utilities and customers in the state,” Sane said.

It’s one of several shifts the Grain Belt Express has undertaken over the past four years to address concerns from landowners, policymakers and regulators. The project won out in a legal challenge from the Missouri Farm Bureau and private landowners in 2020, and it has secured approval from regulators in Kansas, Illinois and Indiana for its overall plans.

Grain Belt Express is one of the largest of a set of privately developed ​“merchant” transmission lines that could dramatically expand the capacity for moving clean energy generated in remote parts of the country to the population centers where it’s most needed. Two other major merchant projects — the $3 billion TransWest Express line from Wyoming to California and the $5 billion SunZia Southwest project from New Mexico to Arizona — have also won key approvals this year that allow them to begin construction.

Most of the transmission in the country is built by utilities that must win regulator approval to pass the costs of construction on to their customers. Merchant transmission projects, by contrast, are built by independent developers with two key customers in mind: the solar and wind power developers looking for a way to sell the electrons they will produce, and the entities that want to buy that power.

“We need to not just site and permit the line and get all the rights we need,” Sane said. ​“We also need to figure out who’s going to pay for the line.” In the case of Grain Belt Express, Invenergy is in active discussions with a number of utilities interested in buying the power it will deliver, as well as corporations looking to buy energy that’s not only cleaner than what’s available from the grid at large but often cheaper, given the falling costs of building new wind and solar farms, he said.

The struggle to expand the U.S. power grid 

A recent report sponsored by trade group Americans for a Clean Energy Grid found that the roster of big transmission projects now being planned, including Grain Belt Express, could expand clean energy capacity by 187 gigawatts. But that represents less than 10 percent of what’s needed to reach the Biden administration’s goal of a 100 percent carbon-free grid by 2035.

“It is unfortunate that it takes so long” for projects like Grain Belt Express to move ahead, said Christina Hayes, executive director of the group. ​“But I’m really glad to see this hurdle has been overcome.”

“What we really need is an interconnected grid,” she added. ​“While these onesies and twosies are wonderful in their own right, it can’t distract us from moving forward with a planned grid as well.”

Transmission projects are complicated and expensive, but their benefits can far outweigh their costs, according to numerous analyses. Invenergy commissioned a study indicating that Grain Belt Express will deliver $11.2 billion in benefits from lower energy costs and reducing the need for investments in other generation resources to provide capacity during the summer and winter months when demand for grid power can exceed available supply.

The benefits of long-range transmission extend beyond enabling more cheap clean energy, however. Power lines connecting different regions of the country can also reduce the risk of extreme weather taxing regional power grids beyond their capacity. In that light, the $11.2 billion in benefits from Grain Belt Express is ​“understating the value here,” Sane said. ​“What it does for reliability is not included.”

Notably, Grain Belt Express will connect three major grid regions — the Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO) in the Midwest and the mid-Atlantic grid operated by PJM.

Those grid operators could have shared more power to reduce the impacts of winter storms over the past decade — if only the transmission to enable that exchange had been in place, according to a 2021 report commissioned by the American Council on Renewable Energy.

Lawmakers in Congress have put forward a number of bills aimed at expanding the scale of interregional transmission projects like this. The Biden administration has proposed regulatory changes at the Department of Energy to speed transmission line development, and the Federal Energy Regulatory Commission is working on a long-range transmission planning rule for utilities and grid operators.

Federal loans and loan guarantees could also help such long-range transmission projects move ahead more quickly. Grain Belt Express has applied for a DOE loan guarantee that could reduce the cost of capital for the roughly $4 billion investment it plans for its Kansas-to-Missouri phase.

“The final piece — which is our bigger focus right now — is locking up the customers for the line,” Sane said. While he wouldn’t provide any details on that front, he did note that prospective customers ​“want a degree of certainty” that the project is actually going to get built. And with its last state approval now in place, ​“this project now has a clear path toward completion.”