The US’ Soo Green HVDC Link – a 350-mile ( 565km) underground high-voltage direct current (HVDC) transmission line running along existing rail corridors from Iowa to Illinois – has begun an open solicitation process to allocate transmission rights on its planned $2.5bn merchant project that would connect wind power
The 2.1GW capacity 525kV trunkline will run from Mason City, Iowa, the nation’s number two wind state after Texas, to Plano, Illinois, west of Chicago, along right-of-way owned by Canadian Pacific Railway (formerly SOO Line Railroad).
Soo Green aims to create a new paradigm for how long-haul transmission is sited, by replicating the model used to build America’s fiber optic network along railroad lanes, which was far easier and less expensive than negotiating easements with every landowner over distances and benefited railroads by providing passive income.
Routing overhead towers and wires for privately funded merchant clean energy projects has proven difficult given opposition from some fossil fuel interests, landowners, politicians, utilities, wildlife protection groups and others. Federal and state regulatory entities have struggled, at times, with dispute resolution and permitting.
The ratio of development cost to construction cost is higher for non-utility transmission than for any renewable or fossil fuel technology – as much as 50% versus 4-5% for a typical wind farm.
Soo Green – which has financial backing from Copenhagen Infrastructure Partners, Siemens Energy and Jingoli Power, a professional services firm based in New Jersey – will link Midwest energy markets and the eastern US, giving buyers direct access to new, low-cost renewable resources.
Construction of the trunkline, which is targeted to come into operation in 2024, would also relieve congestion in the above-ground bulk transmission network, particularly within MISO (Midcontinent Independent System Operator), whose 15-state service territory includes Iowa and most of Illinois.
London Economics International will independently evaluate the open solicitation process on behalf of Soo Green.
That mechanism will enable shippers interested in obtaining transmission capacity rights to register with the developer, along with generators interested in selling electric power and buyers of energy products that Soo Green will carry.
The process will involve three phases. First, Anchor Shippers will be able to obtain capacity rights at an advantageous published “reserve price”. Then, phase two will allow for a voluntary “matching” procedure where the Independent Evaluator will match interested shippers with suppliers and buyers with aligned commercial interests.
This process will then give the matched parties an opportunity to negotiate any desired commercial arrangements to support the acquisition of capacity rights in the subsequent phase three auction.