The Department of Energy on Tuesday launched a solicitation for up to $1.2 billion in capacity contracts for shovel-ready transmission projects that may need a financial boost to get built.
“DOE is seeking to support projects that cost-effectively increase resiliency and reliability, increase interregional transmission capacity, reduce greenhouse gas emissions, and promote equitable economic growth and energy justice,” the department said in its request for proposals.
The RFP is the second round of potential funding from the DOE’s Transmission Facilitation Program, a $2.5 billion revolving fund. Under the program, DOE can serve as an “anchor customer” by buying up to half of a planned line’s capacity for up to 40 years and it can sell the contract to replenish the fund.
In its first funding round, the DOE in October said it was entering into capacity contract negotiations for a total of up to $1.3 billion in three transmission projects across six states that could add 3.7 GW of grid capacity. The projects are being developed by National Grid, Berkshire Hathaway, Grid United and their partners.
Greenfield projects must be at least 1,000 MW to be eligible for the program. DOE has a 500-MW threshold for funding projects that consist of upgrading existing transmission lines or building a new line in an existing transmission, transportation or telecommunications infrastructure corridor.
The RFP has a two-step application process. First, applicants must file a project summary paper and a table describing key project characteristics by March 11. DOE is holding a webinar on February 21 to explain the application process.
DOE said applicants must describe how their projects will support the country’s energy technology and climate targets, as well as meet four goals: support meaningful community and labor engagement; invest in the workforce; advance diversity, equity, inclusion and accessibility; and contribute to the goal that 40% of the overall benefits of certain federal investments go to disadvantaged communities.
After DOE staff review the projects, the second step will take place in mid-April when the agency invites more detailed applications from promising projects, with an estimated late-May application deadline.
The department anticipates making a decision on winning bids in October, the final step before entering into contract negotiations.
There are about three dozen shovel-ready transmission projects in the United States, according to a recent report from Grid Strategies, a transmission-focused consulting firm. Some of those projects could be eligible for a DOE capacity contract.
Two projects on the shovel-ready list — Cross-Tie and Southline — won capacity contracts in the first funding round.
