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The Department of Energy (DOE) in the US announced the Loan Programs Office (LPO) has terminated its conditional commitment for the Grain Belt Express (GBE) Phase 1 project, an HVDC transmission line intended to transport renewable energy, namely wind and solar, across Kansas and Missouri.
The conditional commitment, which would have provided a loan guarantee of up to $4.9 billion, was issued by the Biden administration in November 2024. President Trump’s DOE now argues that it was “rushed out the door in the final days of the Biden administration.”
After a review of the project’s financials, DOE concluded that the conditions necessary to issue the guarantee are “unlikely to be met” and it is “not critical” for the federal government to have a role in supporting this project. DOE said it is conducting a review of every applicant and borrower – including the nearly $100 billion in closed loans and conditional commitments LPO made between Election Day 2024 to Inauguration Day 2025.
The Invenergy project, described as an interregional energy superhighway, is an 800-mile transmission line using state-of-the-art high-voltage direct current (HVDC) technology.
It spans four states: Kansas, Missouri, Illinois, and Indiana, which have all approved the open-access line as a project in the public interest. The Grain Belt Express was expected to add 5,000MW of energy delivery capacity to the region, unlocking market efficiencies that could provide an estimated $52 billion in energy cost savings over 15 years. Grain Belt Express Phase 1, the portion of the project connecting Kansas and Missouri, was shooting for starting construction next year.
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How did this happen?
In March, Missouri Attorney General Andrew Bailey sent a letter to the Department of Government Efficiency (DOGE) and Elon Musk, before the tech mogul’s fallout with the Trump administration, calling for an “immediate investigation” into the nearly $5 billion of federal loan guarantees to be awarded to the GBE transmission project.
Bailey described the project as “one of the most egregious abuses of taxpayer dollars in recent memory,” and narrowed in on the project’s expected use of eminent domain, even in states that have forbidden it. In the letter, Bailey notes that the GBE project has initiated nearly 40 eminent domain proceedings so far.
Republican Missouri Senator Josh Hawley, who claims the project doesn’t benefit his constituents, has been ardent in his opposition to the Grain Belt Express.
After making multiple attempts at killing the project by appealing to the DOE, Hawley met with Trump, who got Energy Secretary Chris Wright on the phone in the Oval Office. Wright confirmed to the pair that the loan guarantee would be nixed, The New York Times reports. Trump’s long-running disdain for wind turbines and utility-scale solar farms likely helped push Hawley’s plan past the finish line.
Invenergy wasn’t impressed with Hawley’s lobbying, to say the least, replying to a Hawley post on the former Twitter:
“This is bizarre. Senator Hawley is attempting to kill the largest transmission infrastructure project in US history, which is already approved by all four states and is aligned with the President’s energy dominance agenda. Senator Hawley is trying to deprive Americans of billions of dollars in energy cost savings, thousands of jobs, and grid reliability and national security, all in an era of exponentially growing electricity demand.”
Jigar Shah, former director of the LPO, questioned the legality of DOE’s decision on LinkedIn.
“This decision is illegal,” Shah wrote. “When the Loan Programs Office (LPO) applicant meets all of the requirements that are set for the conditional commitment, then the Department of Energy is obligated to close the loan.”
What is the Grain Belt Express?
Last November, the US DOE, through its Loan Programs Office (LPO), announced a conditional commitment for a loan guarantee of up to $4.9 billion ($4.4 billion in principal and $470 million in capitalised interest) to Grain Belt Express to help finance an HVDC transmission project, Grain Belt Express Phase 1.
If finalized, the 2,500MW interregional transmission line would run approximately 578 miles from Ford County, Kansas, to Callaway County, Missouri. The project will also have bidirectional capabilities, allowing power to be transmitted in either direction. Grain Belt Express Phase 1, a project covered by FAST-41, has been approved by the states of Kansas and Missouri based in part on the economic development benefits the project will bring to both states, DOE said previously.
The project would 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 was originally expected to “significantly expand” import and export capabilities between these areas, DOE said. MISO, which is already a net importer of electricity, is also expected to have a growing electricity supply gap as electricity demand grows.
The National Transmission Needs Study, published by DOE’s Grid Deployment Office, estimates interregional transmission capacity between SPP and MISO regions may need to increase by up to 1000% to meet demand by 2035. As a merchant line, Grain Belt Express Phase 1 would contract with customers through voluntary agreements. In Missouri, 39 municipal utilities across the state have already contracted for transmission service on Grain Belt Express Phase 1.
The loan guarantee was intended to be offered through LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for energy and supply chain projects and projects that reinvest in existing energy infrastructure. While this conditional commitment indicates DOE’s intent to finance the project, DOE needs to complete an environmental review, and the borrower must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan guarantee.
In September, Invenergy asked the federal government to reduce the size of a “National Interest Electric Transmission Corridor” running through Kansas, Missouri, and Illinois and ending at the Indiana border. In a blog on the Grain Belt Express website, Invenergy said a narrower line “will balance the needs of states to access additional power while also addressing the concerns and uncertainty stakeholders along the path of the project are expressing.”
The “concerns and uncertainty” Invenergy referenced may be related to the potential use of eminent domain to acquire property needed for a new line. DOE argues that national interest corridors will allow the use of eminent domain, even when states where it isn’t currently allowed.
Originally published by Paul Gerke and Sean Wolfe on Factor This.
