The Biden administration last week invited applications for more than $6 billion in funding to expand and modernize the U.S. electric grid, opening the first round of transmission loans and grants under the Infrastructure Investment and Jobs Act (IIJA).

The Grid Resilience Innovative Partnership (GRIP) and Transmission Facilitation Program represent the largest single direct federal investment in transmission and distribution, according to the Department of Energy.

All told, the administration plans to invest more than $20 billion under its Building a Better Grid Initiative, which seeks to identify national transmission needs to reach President Biden’s goal of 100% clean electricity by 2035 and a zero-emissions economy by 2050. DOE cited estimates that the U.S. needs to expand the grid by 60% by 2030 and may need to triple capacity by 2050 to decarbonize the economy. (See Industry Welcomes DOE’s Better Grid Initiative.)

GRIP 

Under GRIP, DOE opened applications for $3.8 billion for fiscal years 2022 and 2023 to improve grid flexibility and resilience against extreme weather and climate change. The IIJA allocated $10.5 billion in total for:

• Grid Resilience Utility and Industry Grants ($2.5 billion), to fund transmission and distribution technology solutions against wildfires, floods, hurricanes, extreme heat, extreme cold, storms and other hazards to the power system. Among those eligible to apply are “electric grid operators, storage operators, generators, transmission owners or operators, distribution providers and fuel suppliers.”
• Smart Grid Grants ($3 billion), intended to increase the “flexibility, efficiency, reliability and resilience” of the power system, with particular focus on increasing transmission capacity, preventing faults that can cause wildfires and integrating renewable energy, electric vehicles and electrified buildings. DOE will accept applications from state and local governments, tribal nations, universities, and for-profit and nonprofit entities.
• the Grid Innovation Program ($5 billion), which will provide financial assistance to states, tribes, local governments and public utility commissions to “collaborate with electric grid owners and operators to deploy projects that use innovative approaches to transmission, storage and distribution infrastructure” to improve resilience and reliability.

“DOE believes there are significant benefits to be realized by coordinating the implementation of the three [IIJA] programs focused on power sector infrastructure, grid reliability and resilience,” it said.

Applicants must submit “concept papers” for the Grid Resilience Utility and Industry Grants and Smart Grid Grants by Dec. 16, with concept papers for the Grid Innovation Program due Jan. 13, 2023. A public webinar to provide more information will be held on Nov.  29.

Transmission Facilitation Program

The Transmission Facilitation Program is a revolving fund to help attract private investments into large-scale new transmission, upgrades of existing transmission lines and microgrids.

The Biden administration is hoping to encourage more large-scale transmission like the 5,000-MW Greenlink West project, a 525-kV line that would run 350 miles from Las Vegas to Yerington, Nev. | NV Energy

The IIJA authorized DOE to borrow up to $2.5 billion to prime the pump for new transmission and expansions that otherwise would not get built.

DOE will purchase up to 50% of the capacity of such projects, serving as an anchor tenant to attract other customers. “By initially offering capacity contracts to late-stage projects, DOE will increase the confidence of additional investors and customers and reduce the risk of project developers under-building or under-sizing needed transmission capacity projects,” DOE said.

Applications for the first phase are due Feb. 1, 2023. A public webinar will be held on Nov. 30.

Applications will be judged based on two equally weighted criteria: that a project is “unlikely to be constructed in as timely a manner or with as much transmission capacity” without the capacity contract and that DOE’s proceeds from capacity sales will recover the cost of its contracts.

The IIJA funding is in addition to the Inflation Reduction Act’s $3 billion in transmission funding, including $2 billion that DOE said “will unlock additional billions in federal lending for projects designated by the secretary of energy to be in the national interest.”

MISO, SPP Eye JTIQ Projects

Marcus Hawkins, executive director of the Organization of MISO States, said OMS is discussing with the SPP Regional State Committee seeking funding for the Joint Targeted Interconnection Queue (JTIQ) projects, a $1 billion portfolio of transmission between MISO and SPP.

“I’m sure individual PUCs will also apply for funding for other types of projects, but the JTIQ projects are the only ones I have direct knowledge of,” Hawkins said in an email.

MISO spokesman Brandon D. Morris confirmed the RTO’s interest in the funding, saying five projects in the JTIQ portfolio may be candidates. “These projects span seven states (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) and seem to align with DOE’s priorities,” Morris said.

CAISO spokeswoman Anne F. Gonzales said the RTO cannot accept the federal funding but will consult with organizations that can. “CAISO supports research and development efforts that enable innovative and comprehensive grid resilience solutions. The ISO provides support letters and serves as a member on many projects’ Advisory Boards,” she said. “In this advisory role, the ISO provides the system operator perspective and informed contribution to the role of grid operators in managing grid reliability as the complexity of the grid infrastructure and grid operational scenarios evolve.

SPP, NYISO and ISO-NE said they were reviewing the funding opportunity but otherwise declined to comment. The Organization of PJM States Inc. and the New England Power Generators Association also declined to comment. PJM and ERCOT did not respond to requests for comment. The Edison Electric Institute, the Independent Power Producers of New York and the Electric Power Supply Association also did not respond to queries.

“While each of these programs is targeted to address specific problems and solutions, I think the biggest benefit from these programs is that collectively they reduce the overall cost to consumers of getting needed transmission infrastructure built and put into service and ultimately will lower the impact on individual customer bills,” said Larry Gasteiger, executive director of transmission trade group WIRES.

Beyond the federal funding, Gasteiger said, “we need a moonshot effort to build more transmission on a faster timetable than we have ever built before at all levels, including interregional, regional and local transmission.”

About 70% of the grid is more than 25 years old, according to DOE. Gasteiger said much of the nation’s aging transmission is at the local level. “Yet there seems to be a glaring disconnect between the White House and DOE on the one hand and FERC on the other as to the importance of addressing those local transmission needs. Too much of FERC’s focus is on efforts that are likely to discourage or inhibit the development of needed local transmission.” (See Transmission Owners, RTOs Defend Planning, Cost Control Practices.)

DOE Criteria

DOE laid out the priorities for GRIP in its 140-page funding opportunity announcement, citing “insufficient development of projects” to increase transfer capacity between regions, reduce increasing interconnection queue times or increase the supply of “geographically and technologically diverse” resources to improve resource adequacy and reduce correlated generation outages.

It noted that the U.S.’ largest electric utilities have been investing more than twice as much in their distribution systems as in their transmission systems.

“Investments should prioritize driving innovative approaches to achieving grid infrastructure deployment at scale where significant economic benefits to mitigate threats and impacts of disruptive events to communities can be attained,” it added. “DOE is looking for proposals that will leverage private sector and non-federal public capital to advance deployment goals. These efforts will be aligned with state, regional or other planning activities and goals. As state resilience plans continue to be updated annually and evaluate future risks, DOE is interested in how federal funds will leverage industry investments towards hardening their system and/or advancing innovative solutions to enhance system resilience.”

Among the technologies it cited as candidates were “adaptive storage deployment, microgrid deployment, and the undergrounding of distribution and transmission lines.”

It also made a plug for grid-enhancing technologies (GETs), noting real-time congestion costs in CAISO, ERCOT, ISO-NE, MISO, NYISO and PJM totaled $4.8 billion in 2016. Deploying three GETs nationally — advanced power flow control, dynamic line ratings and topology optimization — could save $5 billion in annual energy production costs, “with upfront investment paid back in just six months, and double the amount of renewables that can be integrated into the electricity grid prior to building new large-scale transmission lines,” it said.

DOE also said it would welcome applications to help grid operators quickly rebalance the electrical system with autonomous controls through data analytics, software and sensors.

Funding also will be available to appliance manufacturers who spend money on giving their products the ability to engage in smart grid functions and utilities that install smart grid monitoring and communication devices.

DOE urged applicants to team up with a wide range of stakeholders, including grid operators, technology vendors, system integrators and community leaders.

And in case there was any question, DOE said it will reject applications “for proposed technologies that are not based on sound scientific principles (e.g., violates the laws of thermodynamics).”