Brief:
The U.S. Department of Energy (DOE) is poised to embark on negotiations to acquire as much as $1.5 billion in transmission capacity, focusing on projects being spearheaded by Avangrid, Invenergy, Pattern Energy, and Grid United, along with their affiliates. This initiative was disclosed by the DOE on Thursday.
The selected projects hold the potential to deliver an impressive total of 7.1 gigawatts (GW) and emerged from a solicitation aimed at maximizing access through the DOE’s Transmission Facilitation Program (TFP)—a substantial revolving fund amounting to $2.5 billion, courtesy of the bipartisan infrastructure law. According to Invenergy, the finalized awards are anticipated in January.
Following this funding round, the revolving fund will be nearly depleted, as noted by the DOE. The Grid Deployment Office within the department will assess the fund’s remaining balance as ongoing projects progress toward completion, thus alleviating the DOE’s financial commitments. The department has indicated future funding opportunities will arise once the program receives new allocations.
Insight:
Under the auspices of the TFP, the DOE has the unique capacity to act as an “anchor customer” for these transmission ventures by securing up to 50% of a project’s capacity, with the intention to resell the contract afterward to recuperate its investment. This strategy serves to bolster financing avenues for developers by offering assurances of revenue.
Before establishing capacity contracts, the DOE consults with regional transmission planners to address the specific needs of the locations earmarked for development, as stated by the department.
"We are optimistic about federal initiatives that will catalyze transmission planning across the U.S., fostering the swift development of novel projects and enhancing interconnectivity among varied regional grids, which will ultimately augment the grid’s overall resilience," remarked Anthony Allard, executive vice president and head of North America for Hitachi Energy, in a statement.
Here is an overview of the selected projects:
Pattern Energy’s Southern Spirit Transmission project is set to receive an infusion of up to $360 million. This ambitious endeavor involves constructing a 320-mile, 525-kilovolt (kV) high-voltage direct-current line capable of transmitting 3 GW between a wind energy hub situated in Texas and Mississippi. The project, concluding in western Louisiana, will connect to Texas via an additional 40-mile, 345-kV transmission line constructed by Garland Power & Light. The DOE noted, "Linking Texas to the Southeast will not only broaden the accessibility of diverse energy resources but will also enhance grid resilience during peak demand and extreme weather, ultimately benefiting consumers in both regions.”
Despite its potential, this initiative has encountered resistance in Louisiana. In May, Governor Jeff Landry, a Republican, enacted legislation mandating that any transmission project receive approval from an independent system operator to bolster grid reliability or directly serve Louisiana prior to the developer invoking eminent domain for securing a route for the transmission line.
Avangrid’s Aroostook Renewable Project, commanding up to $425 million, aims at channeling 1.2 GW from northern Maine into ISO New England via a 111-mile, 345-kV transmission line. The undertaking is influenced by state legislation, with the Maine Public Utilities Commission gearing up to issue a request for proposals for both transmission and at least 1.2 GW of generation in the northern region. Previous solicitations had seen the PUC select LS Power for the transmission line and Longroad Energy for a 1-GW wind farm at King Pine, although those contracts never materialized. Avangrid intends to submit its Aroostook Renewable Project bid in response to the PUC’s solicitation, hoping for a favorable outcome in the bids expected next year.
Maine Governor Janet Mills, a Democrat, expressed enthusiasm regarding the investment, asserting, “Expanding our transmission infrastructure can solidify the stability and reliability of our grid, enabling us to harness clean, affordable energy generated locally rather than resorting to costly, harmful fossil fuels from distant states."
Invenergy’s Cimarron Link project stands to receive approximately $306 million in funding. This project envisions the transportation of 1.9 GW from wind and solar generation in the Oklahoma panhandle to burgeoning load centers in the eastern part of the state through a 400-mile high-voltage direct current (HVDC) line. Acknowledging the significant transmission congestion in the area, the DOE is closely monitoring the project’s progress.
While the specifics of the generation mix for the Cimarron Link are still under discussion, advanced-stage wind and solar initiatives at the line’s western section, including Invenergy’s nearly 2-GW States Edge Energy Center, are expected to have direct ties to this project, as shared by Erika Huffman, Invenergy’s director of public affairs.
Invenergy has already secured over half of the necessary rights-of-way for constructing the Cimarron Link and is targeting operational status by 2028 following a construction timeline of two to three years.
Grid United and Black Forest Partners’ Southline Phase 2 project is set to receive up to $352 million. Following a significant allocation of $477 million for the first phase, the DOE’s recent commitment supports a 108-mile, 345-kV segment delivering a bidirectional capacity of 1 GW between Hidalgo County and Las Cruces, New Mexico.
Upon completion of both phases, the Southline project will extend approximately 280 miles from the Tucson area to near El Paso, Texas. The developers anticipate facilitating the delivery of wind and solar energy to vital markets. Since the DOE allocated funding for the initial phase last year, Grid United and Black Forest Partners have reported substantial progress with their transmission service clientele, with plans to commence construction of the first phase in the first half of next year.
Senator Martin Heinrich, a Democrat from New Mexico, emphasized that “High-voltage transmission projects like Southline will be the backbone of our clean energy transition, enabling the delivery of carbon-free power generated in New Mexico to the market.” He urged Congress to expedite transmission permitting reform to facilitate the connection of large-scale clean energy and storage projects to the grid.