U.S. Deploys $3.5B Boost for Grid Resilience: Major Projects Revealed
Fifty-eight projects spearheaded by major U.S. power stakeholders will receive up to $3.5 billion in federal funding to improve grid flexibility and boost power system resiliency against extreme weather and climate change, the Biden administration announced on Oct. 18.
The projects mark the Department of Energy’s (DOE’s) first competitive selections under the Grid Resilience and Innovation Partnerships (GRIP) Program. The $10.5 billion program launched by the 2021-enacted Infrastructure Investment and Jobs Act (IIJA) designates funding for three mechanisms through 2026: $2.5 billion in competitive grants for Utility and Industry Grid Resilience, $3 billion for Smart Grid grants, and $5 billion for Grid Innovation.
The DOE on Wednesday noted the investment is “the largest single direct investment in critical grid infrastructure ever.” All of the selected projects have Justice40 commitments, and 86% either contain labor union partnerships or will involve collective bargaining agreements, it noted.
Sixteen Grid Resilience Utility and Industry Grants
The DOE selected 16 projects—for a total of up to $919 million in federal funding—to support “activities that will modernize the electric grid to reduce impacts from extreme weather and natural disasters.” The program is designed to “fund comprehensive transformational transmission and distribution technology solutions that will mitigate weather hazards across a region or within a community, including wildfires, floods, hurricanes, extreme heat, extreme cold, and extreme weather events that can cause a disruption to the power system,” it noted.
While the cost-shared funding was opened to submissions from grid operators, electricity storage operators, generators, transmission owners or operators, distribution providers, and fuel suppliers (and the DOE received 289 concept papers), most of the 16 projects will be spearheaded by utilities.
The DOE notably awarded $100 million each to Michigan-based Consumers Energy, Pennsylvania utility PECO, and Xcel Energy. Consumers Energy proposes to use the funding to upgrade its circuit systems and increase capacity at local substations to better support redundancy in disadvantaged communities. PECO will address substation flood mitigation, upgrading underground monitoring and control technologies, deploying battery systems for backup power, replacing aging infrastructure, and installing high-temperature low-sag conductors to increase capacity across Southern Pennsylvania. Xcel plans to implement seven projects in its Colorado, New Mexico, and Texas service territory to provide system-wide wildfire risk mitigation.
The selections also include several electric cooperatives. The National Rural Electric Cooperative Association (NRECA), a national trade group representing 900 local co-ops, told POWER $100 million of funding announced on Wednesday will go to 39 co-ops across the country for a range of projects focused on local wildfire mitigation. “Electric cooperatives are focused on leveraging innovative solutions to meet tomorrow’s energy needs,” said NRECA CEO Jim Matheson. “This infrastructure funding is an important step as electric co-ops work to harden systems against wildfires and enhance the reliability of the grid.”
Entergy New Orleans will receive $55 million to fund a line-hardening and battery microgrid project. Entergy, in a statement sent to POWER, said the funding is a huge win for the City of New Orleans. “Federal grant funds at this scale will enable us to make our grid stronger—to keep the lights on longer when storms threaten in the future, and to restore power more quickly when service is interrupted. These funds will help offset the cost burden on our customers. We are deeply grateful to the DOE and to everyone who supported our application,” said Deanna Rodriguez, president and CEO of Entergy New Orleans.
Eight Grid Innovation Projects Get a Combined $1.4B in Federal Funds
Up to $1.4 billion of the the DOE’s Grid Innovation funding will go to eight recipients (selected from 135 concept papers) from an array of state, tribal, and local governments entities. The funding will further collaboration with the power industry and bolster projects that use innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability, the DOE said.
The biggest Grid Innovation recipient is the Minnesota Department of Commerce, which will receive $464 million to coordinate the planning, design, and construction of five transmission projects across seven Midwestern states, known as the Joint Targeted Interconnection Queue (JTIQ) Portfolio. The $1.8 billion JTIQ, launched by the Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO) in 2020, aims at building transmission network upgrades along the MISO-SPP seams to enable new generator interconnections.
The funding could “demonstrate a replicable and scalable solution to interregional interconnection and transmission planning studies,” the DOE said. It could also leverage holistic long-range studies of generation projects and regionally optimized transmission solutions, allocate costs among projects over time with an innovative fixed per-MW charge, and “unlock approximately 30 GWs of new generation, primarily wind and solar energy.”
Another major project, led by a partnership between Confederated Tribes of Warm Springs (CTWS) and Portland General Electric (PGE), could establish new 500-kV transmission capacity to move up to 1.8 GW of solar from Central Oregon (including those on the Warm Springs Reservation) to PGE’s load center in the Willamette Valley. The DOE’s share of that project is $250 million.
In Georgia, the Georgia Environmental Finance Authority (GEFA) and the Family of Companies (FOC) that supports the Georgia electric cooperatives won a $249 million award to execute infrastructure upgrades, including the deployment of 25 MW or 4 hours of moderate-scale battery storage, 75 MW at 4 hours of large-scale battery storage, 80 miles of new transmission lines serving 17 substations, and advanced grid control systems anticipated to improve resiliency and reliability.
Hawaiian State agencies, meanwhile, won a federal award of $1.6 million to implement Synchronous Condenser Conversion Technology (SCCT) on the island of Kaua’i. “The SCCT project will convert an existing, but stand-by, generator at the Port Allen power station to use as a synchronous condenser, providing grid voltage regulation service to further the capability of the system to accommodate 100% dispatch of renewable generation sources,” the DOE said. “A project goal is to reduce the likelihood and consequences of disruptive events by enhancing renewable resource adequacy and assuring continuity of the delivery of electrical service.”
The DOE also picked two other Hawaiian projects, bringing its total investment in the state under the program to $20 million. In the wake of the Maui windstorms and wildfires, the DOE earlier this year announced $95 million in federal funds from the program to harden the energy grids in Hawaii and help them to withstand better severe weather-related events fueled by climate change.
$1.1B for Smart Grid Projects
The DOE will also dole out $1.1 billion in federal funding to 34 projects that seek to increase the flexibility, efficiency, and reliability of the electric power system.
“These grants will fund technology focused on increasing 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 electrified vehicles, buildings, and other grid-edge devices,” the DOE said. “Smart grid technologies funded and deployed at scale under this program will demonstrate a pathway to wider market adoption.”
What’s Next?
The DOE released a single funding opportunity for the three programs in November 2022. The selections now kick off negotiations between the DOE and its selectees for final agreements. “When negotiations are complete and the contracting officer approves the award, a start date is established and the project work begins,” the DOE said.
The DOE’s awards will likely run between 60 months and 96 months in length. It anticipates opening a second funding cycle at the end of 2023.
—Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).