Show Me the Money: $4.15 Billion Available for Smart Grid Projects
On June 25, 2009, the Department of Energy ("DOE") issued a Funding Opportunity Announcement ("FOA") to deploy over $4.15 billion from the American Recovery and Reinvestment Act ("Recovery Act") to be used to fund smart grid projects. These funds are being deployed through two FOAs. The first FOA provides $3.4 billion to support the Smart Grid Investment Grant ("SGIG") program and is related to projects that further one or more smart grid functions as listed in Section 1306(d) of the Energy Independence and Security Act of 2007 ("EISA"). The second FOA provides $615 million to support the Smart Grid Demonstration Program ("SGDP") and is related to projects that demonstrate new and more cost-effective smart grid technologies.
This alert is a follow up to alerts we issued on April 211 and March 6, 2009,2 related to the notice of intent for the SGIG program and these FOAs in draft form.
Overview of DOE Smart Grid and Related Activities
The purpose of DOE's activities in the development and implementation of smart grid technologies and techniques is to further the deployment and integration of advanced digital systems that are needed to modernize the nation's electric delivery network for enhanced interoperability3
and cyber security. The application of advanced digital technologies4
are expected to greatly improve the reliability, security, interoperability, and efficiency of the electric grid while reducing environmental impacts and promoting economic growth. To realize smart grid capabilities, deployments must integrate a vast number of smart devices and systems.
One of DOE's top smart grid priorities is to work with the National Institutes of Standards and Technology and the Federal Energy Regulatory Commission on a framework of interoperability standards. However, as the smart grid develops and the grid becomes more interconnected, cyber-related vulnerabilities could allow for disruption of the grid. To protect against this, careful consideration should be given as to how smart grid components affect the security for the grid as a whole.
DOE is also working to further Research and Development ("R&D") activities for next-generation smart grid technologies, promote advanced components activities,5 and create a smart grid information clearinghouse and website to serve the needs of the electric power stakeholder community. On June 19 and 20, 2009, DOE's Office of Electricity Delivery and Energy Reliability ("OE") held a technical workshop to identify a set of quantitative metrics for measuring progress toward smart grid implantation. The workshop results can be found here.
FOA #1: SGIG Program
Through this FOA, DOE is soliciting applications for grants for the SGIG program. The SGIG was created by Section 1306 of the EISA and later modified by the Recovery Act. The SGIG will be implemented and managed by the R&D division within OE.
The purpose of the SGIG is to promote the modernization of the nation's electric transmission and distribution systems and to promote investments in smart grid technologies. The goal of the SGIG is to accelerate the development of a modern grid that accomplishes the following:
- Enables information participation by consumers in retail and wholesale electricity markets;
- Accommodates all types of central and distributed electric generation and storage options;
- Enables new products, services, and markets;
- Provides for power quality for a range of needs by all types of consumers;
- Anticipates and responds to system disturbances; and
- Operates resiliently to attacks and natural disasters.
SGIG will fund projects that support two-way flow of both electric power and information between electric power companies and electricity customers. It is expected that SGIG projects will also enable the entire electricity supply and delivery chains to operate in a safer and more reliable, efficient, secure, and affordable manner through operational improvements in areas such as:
- Outage detection;
- Equipment maintenance;
- Asset deferral; and
- A higher level of environmental protection through increased capabilities for cost-effectively integrating renewable, energy efficient, and less carbon-intensive technologies.
Smart Grid Functions in EISA § 1306(d)
EISA § 1306(d) outlines the following as eligible projects in relation to smart grid functions:
- The ability to develop, store, send, and receive digital information concerning electricity use, costs, prices, time of use, nature of use, storage, or other information relevant to device, grid, or utility operations, to or from or by means of the electric utility system, through one or a combination of devices and technologies.
- The ability to develop, store, send, and receive digital information concerning electricity use, costs, prices, time of use, nature of use, storage, or other information relevant to device, grid, or utility operations to or from a computer or other control device.
- The ability to measure or monitor electricity use as a function of time of day, power quality characteristics such as voltage level, current, or cycles per second, or source or type of generation, and to store, synthesize, or report that information by digital means.
- The ability to sense and localize disruptions or changes in power flows on the grid and communicate such information instantaneously and automatically for purposes for enabling automatic protective responses to sustain reliability and security of grid operations.
- The ability to detect, prevent, communicate with regard to, respond to, or recover from system security threats, including cyber-security threats and terrorism, using digital information, media, and devices.
- The ability of any appliance or machine to respond to such signals, measurements, or communications automatically or in a manner programmed by its owner or operator without independent human intervention.
- The ability to use digital information to operate functionalities on the electric utility grid that were previously electro-mechanical or manual.
- The ability to use digital controls to manage and modify electricity demand, enable congestion management, assist in voltage control, provide operating reserves, and provide frequency regulation.
Funding Opportunity Announcement Information
As stated above, this FOA provides $3.4 billion for smart grid projects. DOE has divided the funds into two categories. Smaller projects will be eligible for between $300,000 and $20 million while larger projects will be awarded between $20 million and $200 million. Applicants will also have to provide 50% cost-share.
Applicants may apply for SGIG funds under the following topic areas.
- Topic Area #1: Equipment Manufacturing
This topic area will fund projects aimed at producing or purchasing smart grid systems, equipment, devices, software, or communications and control systems for modifying existing electric system equipment; building, office, commercial, or industrial equipment; consumer products and appliances; or distributed generation, demand response, or energy storage devices.
- Topic Area #2: Customer Systems
This topic area is aimed at enabling the smart grid functions listed in EISA § 1306(d) of buildings, facilities, and appliances and equipment on the customer side of the meter. This topic area will primarily involve adding smart grid functions to equipment and/or software applications. Eligible projects could be related to smart appliances and equipment, home area networks, building or facility management systems, distributed energy systems, demand response equipment, load control systems, energy storage devices, plug-in hybrid electric vehicles, and microgrids.
- Topic Area #3: Advanced Metering Infrastructure
This topic area is related to the installation of smart meters. Smart meters are able to measure, store, send, and receive digital information concerning electricity use, costs, prices, and time of use between power companies and customers. The smart meter data could be used for dynamic pricing, demand response, load management, billing, remote connect/disconnect, outage detection and management, and tamper detection.
- Topic Area #4: Electric Distribution Systems
This topic area is focused on adding smart grid functions to local electric distribution systems in retail electricity markets. Projects may include adding smart grid functions to existing devices, equipment, and/or software applications; distribution automation systems; supervisory control and data acquisition systems; distribution monitor, control, and optimization systems; load control systems for lowering peak demand; and electric distribution applications of distributed generation and energy storage equipment.
- Topic Area #5: Electric Transmission Systems
This topic area provides funding to projects that add smart grid functions to electric transmission systems. These projects will typically involve power delivery over long distances across several state boundaries.
- Topic Area #6: Integrated and/or Crosscutting Systems
This topic area provides funding to projects that add smart grid functions to multiple portions of the electric system. Projects eligible for this topic will tend to be large and involve equipment and/or software applications that cover two or more of the above-listed topic areas.
Applicants may be individual entities or teams of entities. Qualifying entities include:
- Electric companies, including investor-owned, municipal utilities, public utility districts, regional organizations (such as independent system operators, transmission organizations, and coordinating councils), and national-level utility organizations;
- State, county, local, or municipal government agencies;
- Universities and colleges;
- Electricity consumers (singly or aggregated together);
- Appliance manufacturers, electrical equipment manufacturers, software providers, and communications and information services providers; and
- Other private companies including but not limited to retail electricity suppliers, energy services companies, independent power producers, demand response service providers, metering service providers, project developers, electricity marketers, and consultants.
Submission Due Dates
Interested parties must submit a letter of intent to be eligible to apply for funding under this FOA. As there are three application periods under this FOA, there are three letter of intent deadlines and three corresponding application due dates.
|Letter of Intent Due Date
||Application Due Date|
|July 16, 2009
||August 6, 2009 at 8:00 p.m., Eastern|
|October 23, 2009
||November 4, 2009 at 8:00 p.m., Eastern|
|February 10, 2010
||March 3, 2010 at 8:00 p.m., Eastern|
FOA #2: The Smart Grid Demonstration
Through this FOA, DOE is soliciting applications for grants for the SGDP. The SGDP was created by EISA § 1304 and later modified by the Recovery Act.
The purpose of the SGDP is to demonstrate smart grid technologies and present suite-of-use cases for national implementation and replication of such technologies. This FOA provides $615 million (with 50% applicant cost-share) to fund such technologies over two areas of interest: (1) demonstration of unique smart grid technologies and (2) demonstration of utility-scale energy storage installations. Unlike the SGIG, SGDP applications related to smart grid can include the costs of distributed energy and storage equipment.
- Program Area of Interest #1: Smart Grid
This area of interest is related to the support of regionally unique demonstration projects to quantify smart grid costs, benefits, and cost-effectiveness; verify smart grid technology viability; and validate new smart grid business models, at a scale that can be adapted and replicated around the country. Technologies of interest include advanced digital technologies for use in planning and operations of the electric power system and the electricity markets such as microprocessor-based measurement and control, communications, computing, and information.
DOE expects to issue between eight and 12 awards under this program area of interest. Individual awards may be as high as $100 million.
- Program Area of Interest #2: Energy Storage
This area of interest is related to demonstration projects for major, utility-scale energy storage installations. Energy storage systems include advanced battery systems, ultra-capacitors, flywheels, and compressed air energy systems. Application areas include wind and photovoltaic integration with the grid, upgrade deferral of transmission and distribution assets, congestion relief, and system regulation. These projects will be used to establish costs and benefits, verify technical performance, and validate system reliability and durability, at scales that can be readily adapted and replicated across the United States.
Each of the demonstrations shall address one or more of the following objectives:
- Energy storage to improve the feasibility of microgrids or transmission and distribution capability to improve reliability in rural areas;
- Integration of an energy storage system with a self-healing grid;
- Use of energy storage to improve security to emergency response infrastructure and ensure availability of emergency backup power for consumers;
- Integration with intermittent renewable energy production, at the source or anywhere on the grid;
- Use of energy storage to provide ancillary services, such as spinning reserve services, for grid management;
- Advancement of power conversion systems to make the systems smarter, more efficient, able to communicate with other inverters, and able to control voltage;
- Use of energy storage to optimize transmission and distribution operation and power quality, which could address overloaded lines and maintenance of transformers and substations;
- Use of advanced energy storage for peak load management of residential complexes, businesses, and the grid; or
- Use of energy storage devices to store energy during nonpeak generation periods to make better use of existing grid assets.
DOE has allocated up to $210 million in funding to be divided among 12 to 19 individual awards under this program area of interest.
Applicants may be individual entities or teams of entities. Qualifying entities include state and local government agencies, institutions of higher education, and private domestic entities.
Submission Due Dates
Interested parties must submit applications by August 26, 2009 at 3:00 p.m., Eastern.
If you have questions about any of these funding opportunity announcements or other renewable energy issues, or if you would like to discuss the possibility of your project applying for these or other government funds, please contact:
David Benson at (206) 386-7584 or firstname.lastname@example.org
Janet F. Jacobs at (206) 386-7582 or email@example.com
J. Graham Noyes at (206) 386-7615 or firstname.lastname@example.org
Geoff Revelle at (206) 689-8730 or email@example.com
John Laney at (206) 386 7559 or firstname.lastname@example.org
Marcus Wood at (503) 294-9434 or email@example.com
Bill Holmes at (503) 294-9207 or firstname.lastname@example.org
Greg Jenner at (612) 373-8857 or email@example.com
John McKinsey at (916) 319-4746 or firstname.lastname@example.org
Seth Hilton at (916) 319-4749 or email@example.com
1This alert is available at http://www.stoel.com/showalert.aspx?Show=5353.
2This alert is available at http://www.stoel.com/showalert.aspx?Show=4919.
3Interoperability is the capability of two or more networks, systems, devices, applications, or components to share and readily use information securely and effectively with little or no inconvenience to the user.
4These include microprocessor-based measurement and control, communications, computing, and information systems.
5These include new efforts in solid state systems, power electronics, and new materials for energy conversion and power flow control at transmission and distribution-level voltages.