The US just made its biggest-ever investment in the grid

The Biden administration is making a historic investment in the core infrastructure of the energy transition — the country’s power grid.

On Wednesday, the Department of Energy announced $3.5 billion in grants to expand capacity for wind and solar power, harden power lines against extreme weather, integrate batteries and electric vehicles, and build out microgrids that can keep the lights on during power outages.

The announcement named 58 projects across 44 states eligible to receive federal funding. When matched by funds from state and local governments and utility and industry partners, they will represent more than $8 billion in investment.

All told, it’s the ​“largest-ever investment in America’s grid,” Energy Secretary Jennifer Granholm said in a press briefing from Locust Grove, Georgia, one of the locations that will receive some of the funding. The $3.5 billion is the first major round of funding from the DOE’s Grid Resilience and Innovation Partnerships Program, created by 2021’s Bipartisan Infrastructure Law, which has $10.5 billion available to expand transmission lines, improve grid resiliency and deploy ​“smart-grid” technologies.

That total is far more than the last major federal investment in grid infrastructure, the $3.4 billion in stimulus grants issued by the Obama administration in 2009. But the need for grid investments has also grown dramatically since then.

Climate change is intensifying heat waves, winter storms, droughts and floods that have led to increasingly severe power outages, including the deadly February 2021 grid outages across Texas and blackouts across Louisiana in the wake of Hurricane Ida in September 2021.

Meanwhile, the renewable energy projects that must be built at an unprecedented pace and scale to mitigate climate change are facing yearslong backlogs to connect to transmission grids, which themselves aren’t expanding nearly fast enough to meet the increasing demand for clean electricity to power vehicles, heat buildings and supplant fossil-fueled power plants.

The projects announced Wednesday are aimed at all of these challenges, Granholm said. The investments in transmission grid expansion are expected to enable more than 35 gigawatts of renewable energy to come online within this decade, a 10 percent boost in nationwide grid capacity, she said.

Others are ​“hardening the grid against extreme weather so we can limit outages and restore power more quickly when disaster strikes,” and deploying ​“cutting-edge satellite-monitoring systems to identify and to address threats like wildfires.”

Large-scale grids aren’t the only targets, she added. The funding will help build more than 400 microgrids — combinations of on-site generation, batteries and power control systems that ​“serve critical facilities like hospitals and emergency centers and shelters” in New York, Michigan, Louisiana, Tennessee and other states, Granholm said.

The selected projects also prioritize communities that are ​“ignored or overlooked for far too often, including rural, Native and low-income communities,” according to Mitch Landrieu, the Biden administration’s senior advisor and infrastructure coordinator and former mayor of New Orleans. The Grid Resilience and Innovation Partnerships funding is subject to the Biden administration’s Justice40 Initiative, which pledges to direct 40 percent of federal climate-related funds to historically disadvantaged communities.

The projects will also create ​“good-paying union jobs,” Granholm said. More than eight out of 10 projects selected either contain labor union partnerships or will involve collective bargaining agreements, she said.

A snapshot of grid projects winning funding 

The projects range in scope from more than half a billion dollars to modernize grid infrastructure and deploy batteries and microgrids across rural Georgia to tens of millions of dollars for individual microgrid and technology deployments. Some are tied to individual states and utilities, while others represent the work of coalitions spanning multiple states or entire regions.

Among the largest of the grants is a $249 million award for the Georgia Environmental Finance Authority and the state’s electric cooperatives, the member-owned, not-for-profit utilities that serve about 4.4 million of the state’s 10.8 million residents. That project will encompass new transmission lines to serve a territory that covers three-quarters of the state’s land mass, as well as deploy battery systems and microgrids to bolster grid reliability.

Another project featuring rural cooperatives will receive $99.7 million to deploy wildfire assessment and resiliency technology to a consortium of 39 co-ops scattered across the Western U.S. That project will be led by Holy Cross Energy, a Colorado-based co-op that’s already doing some groundbreaking work on grid modernization and clean-energy integration.

Power-line-sparked wildfires are a significant threat, and utilities across the country are investing increasing amounts of money in burying power lines and installing weather monitoring and spark detection and prevention technology to reduce that risk. DOE previously awarded $95 million to assist utility Hawaiian Electric to harden its grid in the wake of the potentially power-line-sparked wildfires that devastated communities on the island of Maui.

More funding to harden grids against extreme weather is going to projects underway at Gulf Coast utility Entergy ($54.8 million), Michigan utilities DTE Energy ($22.9 million) and Consumers Energy ($100 million), Pennsylvania’s PECO Energy ($100 million) and PacifiCorp ($99.6 million), for a project that will span sites in Oregon, California and Utah.

Several of these projects also include microgrids to enable communities to keep power up when the grid falters. Some are led by utilities that see a valuable role for microgrids in boosting reliability and integrating more clean energy, but others are led by state and community groups. A public-private partnership in Louisiana is receiving $249 million to deploy microgrids across the state — a project that builds on a grassroots effort led by faith-based and community groups in the New Orleans area, which has suffered multiple extended outages in the wake of hurricanes.

Technology that can make better use of the grid already in place is also part of the mix. Pennsylvania utility Duquesne Light Company will receive $19.7 million to bolster an ongoing project that’s deploying ​“grid-enhancing technologies” — sensors and software that can pinpoint the capacity of its power lines to safely carry more energy. Part of PECO Electric’s project involves ​“advanced conductors” that can withstand higher electricity flows than standard aluminum and steel wires.

Other grants are focused on integrating distributed energy resources — rooftop solar panels, electric vehicles, microgrids and other technologies that utility customers are installing in ever-rising numbers. Those include a $49.5 million grant for Pennsylvania utility PPL Electric, which has a distributed energy monitoring and controls technology effort underway, and a $50 million grant for Oregon utility Portland General Electric, which is deploying an ​“artificial-intelligence-enabled, grid-edge computing platform” in support of a long-running effort to integrate batteries, EVs and community solar into its grid.

On the opposite end of the scale are projects seeking to build grid equipment that will make it possible to connect entire regions of the country. The Minnesota Department of Commerce was awarded a $464 million grant backed by $1.3 billion in cost-share from members of Midcontinent Independent System operator and Southwest Power Pool, two grid operators spanning nearly a dozen Midwestern states. The funding will go toward developing a set of transmission lines that will connect the grids between the two regions — one of the most ambitious efforts in the country to create interregional transmission capacity that multiple studies have found could dramatically reduce power costs, expand clean energy capacity and improve grid resiliency in the face of extreme weather.

The grid struggles ahead

Granholm acknowledged that the U.S. power grid, even with more than 5.7 million miles of transmission and distribution lines and more than 55,000 substations, ​“is not equipped to handle all the new demand. We do need it to be bigger, we need it to be stronger, we need it to be smarter to bring all of these new projects online and to meet the president’s goal of 100 percent clean electricity by 2035.”

That assessment is matched by a roster of studies that have identified significant gaps between the current grid and what’s needed to achieve a carbon-free electricity system. It’s also highlighted by real-world challenges that a lack of sufficient grid infrastructure is causing for clean energy developers, electric vehicle charging installations, data centers and other large-scale electricity projects, many of which are facing yearslong delays in getting interconnected.

A recent report commissioned by the trade group Americans for a Clean Energy Grid underscored the gap between grid needs and current investments. The report tracked 36 high-voltage transmission projects ready to start construction in the coming years, representing $64 billion in investment and millions of jobs. But those projects will add less than 10 percent of the additional capacity needed to reach a zero-carbon grid, the analysis found.

Similar gaps exist in the low-voltage grid, according to Fahimeh Kazempour, head of grid modernization for consultancy Wood Mackenzie. In a June interview, she noted that U.S. utilities have sought regulatory approval for up to $70 billion in distribution grid modernization investments over the past several years.

But while the share of utility spending on grid infrastructure is increasing, the level of investment needed to integrate distributed energy resources isn’t keeping up with what’s needed to make those resources a core part of a reliable and cost-effective clean energy system, she said.

In that light, the grid funding from the Bipartisan Infrastructure Law is ​“the monumental investment in grid modernization in our generation, full stop,” said Jeannie Salo, vice president of government relations at Schneider Electric, a global electric equipment manufacturer.

That puts additional responsibility on DOE and its dozens of project partners to design and execute projects that can serve as a roadmap for how to integrate next-generation grid technologies on a much wider scale in the years to come, she said.

“There’s a huge effort being placed on building out transmission and distribution,” Salo added. ​“This has to go hand in hand with intentional deployment of technology” to enable what she described as ​“a smarter and digitized grid.”

“We are glad that DOE will soon begin talking about what was funded so far, but we need more opportunities to share experiences and best practices across utilities and grid operators,” she said. ​“We need more rapid scaling and investments in technology to truly modernize the grid.”