Stimulus Update: Smart Grid Funding Guidelines Released

Updating my previous post, VP Biden announced plans to distribute more than $3.3 billion in smart grid technology development grants and an additional $615 million for smart grid storage, monitoring, and technology viability late last week.

The announcement comes with mixed reviews, including warnings that the $20 million cap on grant awards ($40 million with matching funds) is too small to incentivize large and medium IOUs to deploy smart meters.  This post notes that Xcel Energy’s SmartGridCity is a $100 million dollar project on it’s own and involves only a single city.

Even so, the announcement ends nearly 2 months of speculation about how the federal government (specifically the DOE) intends:

To develop a smart, strong and secure electrical grid, which will create new jobs and help deliver reliable power more effectively with less impact on the environment to customers across the nation.

Upgrading the grid will be a monumental undertaking, and if done right, the value will reverberate through future generations.  It involves a complex mix of difficult, potentially explosive, political issues around energy: equal parts Climate Change, NIMBY, green energy deployment, national security, Federalism…to name a few.  On top of these issues, there are numerous uncertainties that must be dealt with, including establishing industry-wide standards and tackling cyber security issues.  In early May, key stakeholders will meet in Washington, D.C. to begin discussions about developing industry-wide standards.

The DOE has proposed a bifurcated approach establishing two funding streams under ARRA’s $4.5 billion “Electricity Delivery and Energy Reliability” provision.

1.  $3.3 billion Smart Grid Investment Grant Program

This includes $500,000 – $20 million for Smart Grid deployment grants and $100,000 – $5 million for the deployment of grid monitoring devices.  The program provides matching grants of up to 50% of investments planned by electric utilities and other entities to deploy smart grid technologies.

2.  $615 million for Demonstration Projects

This includes funding for demonstration projects in three areas: 

• Smart Grid Regional Demonstrations will quantify smart grid costs and benefits, verify technology viability, and examine new business models.
• Utility-Scale Energy Storage Demonstrations can include technologies such as advanced battery systems, ultra-capacitors, flywheels, and compressed air energy systems, and applications such as wind and photovoltaic integration and grid congestion relief.
• Grid Monitoring Demonstrations will support the installation and networking of multiple high-resolution, time-synchronized grid monitoring devices, called phasor measurement units, that allow transmission system operators to see, and therefore influence, electric flows in real-time.

Click here for a PDF of DOE’s draft announcement.