Stimulus Update: Inching Towards Smart Grid Funding Guidelines

With specific dollar allocations published for Conservation Block Grants, $780 million released for energy efficiency and Weatherization (more to come), and grant announcements worth $2.4 billion for next generation electric vehicles issued, the first wave of DOE stimulus has come and gone.

In its wake, state, city, and county energy offices, agencies, commissions and departments are scrambling to make sense of how to funnel additional money into their respective jurisdictions.  This includes readying Strategic Energy Plans for SEP program approval and drafting State Comprehensive Applications for the remaining Weatherization funds, as well as exploring potential partnerships and programs to win highly competitive grants for additional projects.

But the biggest unclaimed prize (which is conspicuously devoid of specific application details from DOE to date): an ARRA provision worth $4.5 billion for “Electricity Delivery and Energy Reliability.”  This so-called “Smart Grid Demonstration Provision” is one of the larger infrastructure investments under ARRA — intended to upgrade the antiquated grid and create jobs in the process (read this for a detailed KEMA analysis published by GridWise on smart grid job creation).  Unlike Weatherization, SEP, or Conservation Block Grants, Smart Grid funds will not be divided among the various states or trickle down through predetermined formulas.  Rather, ARRA states:

“(A) IN GENERAL — In carrying out the initiative, the Secretary shall provide financial support to smart grid demonstration projects in urban, suburban, tribal, and rural areas, including areas where electric system assets are controlled by nonprofit entities and areas where electric system assets are controlled by investor-owned utilities.”  [SEC. 405. AMENDMENTS TO TITLE XIII OF THE ENERGY INDEPENDENCE AND SECURITY ACT OF 2007}.

That leaves open…the entire United States and there is little indication of how few or many “demonstration projects” will ultimately be funded.  Whether the DOE throws money at established, so-called “Smart Grid Hubs” (see SmartGridCity in Boulder, CO and The Pecan Street Project in Austin, TX), or rather smaller programs just getting off the ground is anyone’s guess.  Potential recipients include public and investor-owned utilities, and nonprofit entities controlling electric system assets.  Private companies with smart grid technologies can get a piece of the action through partnerships with utilities.

What we do know is that ARRA requires the Secretary of Energy to establish procedures for applications to obtain grants within 60 days after the enactment of ARRA (which is approximately the middle of April) “by means of a notice of intent and subsequent solicitation of grant proposals.”

What types of projects will ultimately be funded?

ARRA includes a short laundry list of proposed programs that qualify as “activities to modernize the electric grid,” including demand responsive equipment development, enhancing security and reliability of the energy infrastructure, energy storage research, development, demonstration and deployment, and facilitating recovery from disruptions to the energy supply.

In keeping with these goals, FERC released a proposed policy and action plan statement on March 19 setting forth interim guidelines to encourage the development and implementation of Smart Grid technology and proposing reliability and interoperability standards.  FERC proposes to make cyber security and grid reliability top priorities for smart grids.  Read here for the full statement from FERC.

FERC is also partnering with the National Association of Regulatory Utility Commissioners (NARUC) as co-chairs of the NARUC/FERC Smart Grid Collaborative.  The Collaborative has released a list of criteria for the DOE to consider when it starts providing grant and other funding for Smart Grid projects under ARRA.

How can CleanTechies get involved?

CleanTechies interested in Smart Grid employment opportunities should not wait for the official DOE guidelines release to get in on the action.  The Smart Grid: An Introduction, published by DOE’s Office of Electricity Delivery and Energy Reliability, offers an accessible overview of the opportunities associated with Smart Grid implementation.  It also includes a discussion of the following five fundamental technologies, heralded as key drivers of the Smart Grid:

1. Integrated communications, connecting components to open architecture for real-time information and control, allowing every part of the grid to both ‘talk’ and ‘listen’
2. Sensing and measurement technologies, to support faster and more accurate response such as remote monitoring, time-of-use pricing and demand-side management
3. Advanced components, to apply the latest research in superconductivity, storage, power electronics and diagnostics
4. Advanced control methods, to monitor essential components, enabling rapid diagnosis and precise solutions appropriate to any event
5. Improved interfaces and decision support, to amplify human decision-making, transforming grid operators and managers quite literally into visionaries when it come to seeing into their systems

Keep an eye on the DOE’s Office of Electricity Delivery and Energy Reliability for updates about Smart Grid funding.