To secure federal funding, developers must navigate various financing and investment options related to grid resiliency and modernization, transmission deployment and critical electric generation facilities.
Responding to funding demands, however, can pose significant challenges. Balancing early-stage project commitments with application requirements blurs the line between speculating about long-term project details, being non-responsive and making costly project decisions. For applicants, a proactive approach toward the funding and submittal process can make the difference between a project moving forward with approved funding or application denial.
Goals and Funding
In 2022, under the Infrastructure Investment and Jobs Act—also known as the Bipartisan Infrastructure Law — the U.S. Department of Energy (DOE) released its plan to provide $10.5 billion over five years through the Grid Resilience and Innovative Partnership (GRIP) program. Administered through the DOE’s new Grid Deployment Office (GDO), the GRIP Program is separated into three funding categories: grid resilience, smart grid and grid innovation.
In October 2023, the GDO announced $3.46 billion in grants for 58 projects across 44 states to strengthen electric grid resilience and reliability. Most recently, on Nov. 14, 2023, the DOE released its second round of funding: $3.9 billion for projects that will improve the electric transmission grid and advance the interconnection processes.
Additionally, the funding aims to create comprehensive solutions that link grid communication systems with operations, increasing resilience and reducing power outages and threats. It focuses on projects that deploy advanced technologies — distributed energy resources and battery systems, for example — to provide essential grid services that ensure communities across the country have access to affordable, reliable and clean electricity.
The Process
The GRIP program initially laid out a rigid, multi-phased schedule for funding applications. In phase one, entities were given two months (a Jan. 12, 2024 deadline) to submit a concept paper consisting of:
- Project overview — project location, project partners and topic area of funding.
- Project details — how the project addresses the topic area’s eligible uses and technical approaches, the impact of DOE funding, project readiness and viability, and the key project management team and partners.
- Project impacts — benefit to the grid; potential of the project to reduce innovative technology risks; project support for state, local, tribal, community and regional resilience; and the ability to spur private sector investments.
- Community Benefits Plan — community and labor engagement and agreements; investment in job quality and workforce; advancement of diversity, equity, inclusion and accessibility; and contributions to the Justice40 Initiative.
For many developers, the short timeline posed the first significant challenge for putting forward a successful concept paper.
In phase two, applicants were required to submit a complete technical application by either April 17 or May 22, depending on the application’s funding category. Given the expedited schedules and the extensive preparation required for technical applications, waiting for the DOE’s feedback was not an option for most applicants. Many applicants were required to incur the costs of developing the front-end engineering design phases of the project before receiving the DOE’s application response.
Once the DOE reviewed the technical applications, phase three began by scheduling pre-selection interviews with the applicants to question the proposed project. In phases four and five, the DOE will announce award recipients at the end of summer and early fall 2024, with award negotiations finalizing by early 2025.
The Challenges
The DOE has provided a clear outline and expectations for a full technical application and the weight of each criterion. The limited time provided to prepare a detailed and accurate account of the proposed project and its approach, however, poses some significant challenges.
First, the DOE application requires detailed information about the potential for environmental and cultural resource impacts and, more importantly, the mitigative strategies to overcome them. Despite having a clear overall project scope, these projects — so early in the project development cycle — may have only high-level concepts about the environmental approach.
In many cases, field surveys that assess the potential for project impacts have not occurred, making it difficult to prepare accurate avoidance and mitigative strategies. Applicants must therefore either commit the project to protective measures without regulatory agencies’ buy-in or have costly impacts during construction that had not been accounted for in the project budgeting process.
Another challenge is identifying the project management team. The DOE understandably wants a qualified and committed project management team identified within an application. However, the industry has experienced a high turnover rate among both developers and environmental consultants. Given how many of these projects span more than five years, securing a team with the appropriate experience may be unrealistic.
The Community Benefits Plan (CBP) poses another challenge, given the significant weight it carries in an application. Applicants must provide a robust plan that demonstrates meaningful community and labor engagements with stakeholders — labor unions, tribal nations, local universities and organizations that work with disadvantaged communities, to name a few. The CBP must also demonstrate a project’s ability to bring workforce opportunities to the communities within the project region.
Lastly, it is difficult to meet the DOE assurance that labor agreements have been thoroughly addressed. These agreements reduce the risk of skilled worker shortages, labor disputes or disruptions; however, given the tight timeframe and limited project scope, they can add significant time and cost to developed properly.
Next Steps
Given the scope of application requirements, there are some actions that may improve the likelihood of qualifying for GRIP funding. First, between required submittals to the DOE, applicants should consider proactively reviewing previously submitted information. Identifying any gaps and anticipating potential requests for additional information ensures accuracy and reduces the likelihood of compressed schedules.
By intentionally and purposefully working towards the next phase requirements, applicants minimize the risk to investment dollars. It also allows the project team to refine project details, resulting in a more successful application and overall project outcome.
At this time, it is uncertain whether the DOE will release another round of funding based on the large number of applications received thus far. However, developers are encouraged to contact the GDO about the GRIP program and other funding opportunities available through the DOE.
Ultimately, the GRIP program represents a significant step towards a more resilient and modernized grid, benefiting communities across the country with access to affordable, reliable and clean electricity.
