The funding, the largest single investment into the grid in over a decade since the American Recovery and Reinvestment Act of 2009, which kickstarted the rollout of smart metering and a smart grid, forms part of the ‘Building a Better Grid’ initiative to upgrade the grid for a 100% clean energy future.
The funding, previously announced and now combined in the Grid Resilience and Innovation Partnership programme, is allocated in three parts – $2.5 billion for grid resilience, $3 billion for smart grids and $5 billion for grid innovation.
The grid resilience funding will be in the form of grants to support activities to modernise the grid to reduce the impacts due to extreme weather and natural disasters, including wildfires, floods, hurricanes, extreme heat, extreme cold, storms and any other event that can cause a disruption to the power system.
The smart grid grants are aimed to increase the flexibility, efficiency and reliability of the electricity system, with 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 electric vehicles, buildings and other grid edge devices.
Smart grid technologies funded and deployed at scale under this programme, envisaged as an extension to the previous Smart Grid Investment Grant programme, should demonstrate a pathway to wider market adoption.
The grid innovation programme is planned to provide assistance at state, tribe, local government and public utility commission levels for the deployemnt of projects that use innovative approaches to transmission, storage and distribution infrastructure to enhance grid resilience and reliability.
Broad project applications are of interest including interregional transmission projects, investments that accelerate interconnection of clean energy generation and utilisation of distribution grid assets to provide backup power and reduce transmission requirements.
“DOE is moving quickly to upgrade the nation’s power grid in order to provide American households with more reliable and affordable electricity that comes from a more diverse set of clean energy sources,” said Secretary of Energy Jennifer M. Granholm.
“President Biden’s Bipartisan Infrastructure Law is investing in improving and expanding transmission and distribution systems across the country, driving down energy costs and generating good paying jobs.”
In a ‘request for information’ the DOE is seeking feedback to refine the funding opportunity, the first of which is planned for later in the year, and to guide the implementation of the funding over five years.
The ‘Building a Better Grid’ initiative was launched in January as part of the Infrastructure Investments and Jobs Act of November 2021 with the promise of over $20 billion in funding focussed primarily on upgrading and expanding the US transmission system. Estimates are that a 60% expansion may be needed by 2030 and up to a tripling by 2050 to improve the reliability and resilience of the system and to support decarbonisation with high penetration of renewable energies.
Other fundings include a $2.5 billion Transmission Facilitation programme to upgrade and construct new transmission lines. An innovation planned in this programme and aimed to encourage investment into new lines that otherwise would not get built is that the DOE will commit to purchasing up to 50% of the maximum capacity of the line for up to 40 years. When customer demand has increased enough to cover those costs, then DOE will remarket the capacity, thereby replenishing the fund.