DOE announces $13B in financing opportunities for electric grid modernization efforts

Funded by the Infrastructure Investment and Jobs Act (IIJA) passed last year, the United States Department of Energy (DOE) announced $13 billion in new financing opportunities last week for those looking to expand and modernize the national electric grid.

“We are moving swiftly to deliver cleaner, cheaper energy to every American community by building a modern and reliable electric grid,” U.S. Secretary of Energy Jennifer Granholm said. “With nearly 70 percent of the nation’s grid more than 25 years old, the President’s agenda is making historic investments that will strengthen the nation’s transmission grid to drive down energy costs, generate good-paying jobs, and help keep the lights on during extreme weather events.”

Independent estimates cited by the DOE claimed the need to expand electricity transmission systems in the United States by 60 percent as of 2030 and perhaps as much as triple capacity by 2050 to accommodate the onboarding of cheaper, cleaner energy, efforts to reduce power outages from climate change-induced severe weather and the subsequent rise in demand for electric vehicles and electric home heating.

Funding will be offered through the Grid Resilience Innovative Partnership (GRIP) and Transmission Facilitation programs as part of the larger Building a Better Grid Initiative, which will pair these investments with a $2.3 billion program to fund grid resilience investments by states and Tribes to reduce impacts from extreme weather and natural disasters. The Building a Better Grid Initiative is one of the central focuses of the Biden administration, promoting the identification of national transmission needs and working to invest more than $20 billion overall into grid modernization and the construction of long-distance, high-voltage transmission, and distribution systems.

Circling back to the newest opportunity, GRIP will provide $10.5 billion across three affiliated programs to tackle grid flexibility and improvements to power resilience. These programs include Grid Resilience Utility and Industry Grants focused on transmission and distribution solutions to counter regional or communal hazards; Smart Grid Grants targeting increased flexibility, efficiency, and reliability for the power system while increasing capacity, among others; and the Grid Innovation Program, which offers targeted assistance to states, Tribes, local governments and public utility commissions for collaborative projects with electric grid owners and operators to improve grid resilience and reliability.

Concept papers must be received first for the application process to begin and are due on Dec. 16, 2022, for the Grid Resilience Utility and Industry Grants and Smart Grid Grants. The Grid Innovation Program offers a slightly longer window until Jan. 13, 2023.

As to the Transmission Facilitation Program, funds will be revolving, allowing the DOE to borrow up to $2.5 billion to help along large-scale new transmission lines, upgrade existing lines, and create microgrids in select areas. Capacity contracts will be used to commit to the purchase of up to 50 percent of the maximum capacity of transmission lines. Submissions for this program’s first phase are due on Nov. 30, 2022.