Two European firms are backing an ambitious $2.5 billion project to carry renewable electricity underground through the American heartland.
Siemens AG is joining with a Danish investment fund to build and operate a 349-mile-long, electrical-transmission line that would carry wind and solar energy from Iowa into the Chicago area, according to the project’s developer.
The link would allow renewable energy from the Upper Midwest to travel all the way into the eastern U.S. by hooking up to the PJM Interconnection, the power grid that serves all or part of 13 states, including Illinois, Ohio and Pennsylvania.
Called the SOO Green Renewable Rail, the project is a giant extension cord designed to carry electricity on buried direct-current lines. The fund, called Copenhagen Infrastructure Partners, and Siemens are purchasing the project from its developers, a group that includes several private investors and the U.S. subsidiary of Canadian Pacific Railway Ltd. The terms of the deal weren’t disclosed.
The vast majority of the line will run in a Canadian Pacific railroad corridor. The project’s developers expect that going underground on an existing railroad right of way will make it easier to obtain permits and local permission, a strategy that they say was used before in expanding high-speed internet networks. It is using direct-current technology, instead of the more widely deployed alternating current, because it doesn’t interfere with railroad signals.
“The fact is that going underground, you don’t have wires rubbing up against trees. You are not going to have tornado impacts. It is safer and more resilient,” said Joe DeVito, president of Direct Current Development Co., which has developed the project.
The project still needs to obtain certain state and federal permits, and needs to sign up shippers to contract for capacity on the line. It will be capable of carrying 2,100 megawatts, the equivalent of a large nuclear-power plant.
Developers said they hope to have the project operational by 2024.
Investors have tried to build more than a half-dozen long-distance, direct-current power lines in the U.S. So far, the aboveground efforts have been delayed or derailed by permitting delays as well as local and political opposition.
Building a belowground line is nearly twice as expensive per mile as an aboveground line on towers.
Developers have been trying to move electricity from one large regional grid to another, to take advantage of electricity price arbitrage, as well as abundant renewable energy in the Upper Midwest and Great Plains.
This project is the second large renewable-energy investment that Copenhagen Infrastructure Partners has made in the U.S. It also has a 50% stake with Avangrid Renewables in Vineyard Wind, an offshore wind farm off the coast of Massachusetts.
Christian Skakkebaek, a senior partner at Copenhagen Infrastructure Partners, said the project fits into his fund’s focus on “critical energy infrastructure assets.”
A spokesman for Siemens said the German company’s financing arm was backing the project to help “meet the many challenges associated with bringing complex infrastructure projects online.” Siemens’s high-voltage, direct-current technology will be used in the project.
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