The United States Energy Department has withdrawn a Conditional Loan Guarantee of $ 4.9 million for Grain Express Grain Express Belt Transmission Line, claiming financial deficiencies that officials determined that they were unlikely to be resolved.
The decision, announced on July 23, emphasizes a wider change in the priorities of federal loans away from the renewable energy infrastructure under the Trump administration.
“After a thorough review of the project’s finance, DOE found that the conditions needed to issue the guarantee is likely to be important and that it is not important for the federal government to play a role in the support of this project,” the agency said in its announcement, adding that it now works with “less risk tolerance … and an approach without commitment to reliable energy.”
Grain Belt Express, an 800 kilometer direct current line, of 600 kV of high voltage, was designed to transport up to 5 GW of wind and solar energy of Kansas through Missouri in Illinois and Indiana. It was expected that its first phase, which covered 530 kilometers from Western Kansas to the center of Missouri, would cost $ 4.4 billion, including converters’ stations and right -wing.
The regulatory files reviewed by Enr show that, while Gra Express belt reached voluntary transmission service agreements with 39 Missouri Municipal Services, which had up to 225 MW, these agreements did not include binding long -term income commitments.
By virtue of a liquidation of the Kansas Corporation Commission, the developer was forced to demonstrate documented funding and compensation contracts for the required customers before the start of construction.
The DOE Loan Program Office concluded that the project speculative income model, depending on non -binding agreements, did not fulfill a risk threshold for the support of federal loans.
In a statement to ENR, a spokesman for the Grade Express Belt said that the project is maintained by the loss of federal funds and that its mission to deliver energy would continue to be carried out by reaching capital through other sources. “America is a dominant energy and a AI power plant, and the Express Grab belt will be the largest power channel in America,” the spokesman wrote in an email.
“Although we are disappointed in the LPO loan warrant [the Trump administration’s] The Agenda of Energy and North -American technology dominates while providing thousands of dollars in energy costs savings, strengthening the reliability and resilience of the network and creating thousands of North -American jobs, “added the spokesman.
Environmental groups and consumer defenders criticized the completion.
The director of the Missouri Chapter of the Sierra Club, Gretchen Waddell -barwick, told the Missouri independent The cancellation “is desperate to satisfy political interests … At the expense of Missouri families and companies throughout the state, which may have to pay higher electricity fees due to this decision.” In Illinois, the Center for Environmental Policy and Law and other groups argued in a brief legal that stopped the Belt of Gra would prevent progress towards clean energy goals and network reliability under the law of clean and equitable jobs in the state.
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Unlike regulated utility projects, which recover costs through approved payment costs, traders’ transmission lines such as grain belt are based on market demand and voluntary customer contracts.
DOE requires that these projects demonstrate cash flows through binding agreements, so called “compliance fences”, before committing funding with the taxpayer.
In contrast, Champlain Hudson Power Express, a 1,200 MW HVDC line that connects Quebec in New York City, won 25 -year delivery contracts with state authorities before financial closure. Pattern Energy Sunzia’s transmission in Nou Mexico, with a capacity of 3 GW of more than 550 miles, closed a private financing agreement of $ 11 million by 2023 endorsed by long -term customer agreements. The Renovable Transmission Project of 4,500 MW of Tehachapi in the southern California Edison, which joined the service in 2016, followed a traditional regulated model with a guaranteed costs recovery.
The political opposition to the grain belt led Missouri officials to be more and more vocal about the federal support of the project. The guarantee of the project loan was announced in November 2024 as part of a wave of clean energy funding approvals by the Biden administration in the last months of its term. On July 10, Senator Josh Hawley (R-Mo on the social network website xHe asked DOE to withdraw the loan guarantee, “this administration should stop using taxpayers’ money to promote speculative green energy,” he wrote.
Grain Belt Express countered the narrative, calling the characterization of Hawley “strange” on its website and the warning that the cancellation threatens to derail “the largest transmission infrastructure project in the history of the United States”.
A state -of -the -art effort to save the funding of Jim Shield, Vice President of Inventaby, the project developer, was framed in disastrous terms, according to a copy of a letter sent to Energy Secretary Chris Wright. “The main contractors of Nord -American construction have $ 1.7 billion in awards,” said Shield, pointing to contracts in April at Quanta Services and Kiewit. “North -American workers will make key components, including driver cables, insulators and transmission ensembles, supporting Pennsylvania’s domestic supply chains in Alabama,” he added.
Missouri Attorney General Andrew Bailey, who opened a consumer protection investigation into grain belt earlier this year, welcomed the DOE decision. Pledged to continue legal actions if Inventby is trying to move forward without federal support.
DOE’s decision reflects a broader change in Trump’s administration policy. Recent executive orders have stopped solar and wind subsidies and an increase in the scrutiny of renewable energy projects in the federal lands. The rotations affecting the grain belt express the challenges of traders’ transmission developers without a robust customer base or critically federal support.
Comparison of funding approaches to the main transmission projects in the United States. Unlike Champlain Hudson and Sunzia, who reached long -term binding agreements and ended private funding before construction, Grain Belt Express was based on non -binding transmission service agreements and did not comply with the DOE financial preparation point.
