New DOE Funding Available for Grid Improvement
In November, the U.S. Department of Energy (DOE) announced $13 billion in new financing opportunities for the expansion and modernization of the nation’s electric grid. Among other entities, some of the funding is open to electric utilities. The two funding programs, part of the “Building a Better Grid Initiative,” are the Grid Resilience Innovative Partnership (GRIP) program and the Transmission Facilitation Program, will be funded by the Bipartisan Infrastructure Law.
The Grid Resilience Innovative Partnership (GRIP) program and the Transmission Facilitation Program together represent the largest single direct federal investment in critical T&D infrastructure and one of the first down payments on an over $20 billion investment. These federal investments are designed to unlock state and private sector capital for projects designed to modernize the grid and increase its reliability.
“These federal investments will unlock billions of dollars of state and private sector capital to build transformative projects that increase the reliability of the power grid and modernize it so that more American communities and businesses have access to affordable, reliable, clean electricity,” said the DOE. It added that nearly 70% of the nation’s grid is more than 25 years old.
The GRIP Program
GRIP will provide $10.5 billion through three programs, designed to enhance grid flexibility and improve the resilience of the power system against growing threats of extreme weather and climate change:
1 – Grid Resilience Utility and Industry Grants ($2.5 billion) are designed to fund comprehensive T&D technology solutions that will mitigate multiple hazards across a region or within a community, including wildfires, floods, hurricanes, extreme heat, extreme cold, storms, and any other event that can cause a disruption to the power system. Eligible applicants include electric grid operators, storage operators, generators, transmission owners or operators, distribution providers, and fuel suppliers.
2 – Smart Grid Grants ($3 billion) are designed to increase the flexibility, efficiency, reliability, and resilience of the electric power system, with a particular focus on increasing the capacity of the transmission system, preventing faults that may lead to wildfires or other system disturbances, integrating renewable energy at the transmission and distribution levels, and facilitating the integration of increasing numbers of electric vehicles, as well as energy efficiency for buildings. The program is open to a number of domestic entities, including institutions of higher education, for-profit entities, non-profit entities, state and local government entities, and tribal nations.
3 – The Grid Innovation Program ($5 billion) is designed to provide financial assistance to one or multiple states, local governments, public utility commissions, and Tribes, in order to collaborate with electric grid owners and operators to deploy projects that use innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability.
Concept papers are a required first step in the application process for the GRID programs. Concept papers for the first two (Grid Resilience Utility and Industry Grants and Smart Grid Grants) are due December 16, 2022. Concept papers for the third (Grid Innovation Program) are due January 13, 2023.
Transmission Facilitation Program
The Transmission Facilitation Program is designed to establish an innovative revolving fund to help overcome the financial hurdles facing large-scale new transmission lines, upgrades of existing transmission lines, and, in selected states and territories, the establishment of microgrids.
The Bipartisan Infrastructure Law authorizes DOE, through the program, to borrow up to $2.5 billion to assist in the construction of high-capacity transmission lines with an innovative approach that can spur valuable new lines that otherwise would not get built or increase the capacity of already planned lines.
Under this first solicitation (released November 18), DOE will use capacity contracts to commit to purchasing up to 50 percent of the maximum capacity of the transmission line. By initially offering capacity contracts to late-stage projects, DOE is expecting to increase the confidence of additional investors and customers and reduce the risk of project developers under-building or under-sizing needed transmission capacity projects.
The submission deadline for the first phase of the Transmission Facilitation Program is February 1, 2023. View Finley’s energy services or contact an expert by filling out the form below: